Industry News

High home prices pressure apartment market

Southern California rents expected to climb

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The high price of homes and a limited supply of new apartments will lead to "substantial rent increases" and low vacancy rates in Southern California, according to a forecast by the Richard S. Ziman Center for Real Estate at the University of California, Los Angeles, Anderson School of Management. The Ziman Center forecast notes that 18 percent of Californians can now afford the median-priced single family home; this will inevitably sustain a high demand for apartments, said Stephen D. Cauley, associate director of research for the Ziman Center. Cauley said in an announcement today that he projects rent increases of 2 percent to 3 percent above inflation. Also, Cauley said that the areas where new apartments are being built are not the areas of greatest demand. "We believe that major construction of Southern California apartments will take place in areas like the Inland Empire and Palmdale in northern Los Angeles County, while the greatest need for these living units remains in the ur...