Downtown Los Angeles (Credit: Wikicommons)
In case anyone missed the memos that Los Angeles County desperately needs more housing, here’s a reminder.
The number of new apartment units that went online in L.A. County doubled year over year, according to Marcus & Millichap’s multifamily report. But even that wasn’t enough to meet demand.
Overall vacancy in the county fell to about 3.6 percent even as the volume of new apartment projects remained historically high, according to the new report. It tracked the apartment market from June 2018 to June 2019. The number of completed projects are set to keep up the torrid pace through the end of the year, if dip only slightly.
Approximately 10,680 apartment units were added in that 12-month period, doubling the 5,300 units that were added the prior year. Of those recently completed rentals, 60 percent were in Greater Downtown Los Angeles.
This influx of rentals has yet to generate oversupply concerns as construction began on 36 additional projects, totaling 8,700 units, over the past four quarters. It has also yet to drive down prices amid competition and calls for more affordable housing options citywide and throughout the state.
Average rents ticked up nearly 4 percent in the past year, according to the report. In L.A. County, the average rent reached $2,259 per month in the second quarter after posting a 4.1 percent increase a year ago.
Rent is about $2,440 in the greater Downtown Los Angeles area; $3265 on the Westside; $2,155 in the San Fernando Valley; and $2,317 in South Bay and Long Beach.
The apartment inventory is set to swell by another 9,400 units during the second half of 2019. Five submarkets’ rental stocks will grow by at least 1,000 units, led by Downtown L.A. and Hollywood, where 1,700 and 1,600 units will come online, respectively.
Santa Monica and Marina del Rey, the San Fernando Valley, and Mid-Wilshire round out that top five list. Long Beach is also expected to receive more than 700 apartments following two years without any new units.
At the end of June, construction was underway on 27,900 units with completion dates extending into 2021. The projects Ferrante in City West and Cumulus in West Adams each feature more than 1,000 apartments.