It’s bad enough that home prices are (generally) increasing in California, some housing experts now expect apartment rents across the state to rise as well. Dees Stribling, contributor to Multi-Housing News Online, referred to the latest USC Casden Multifamily Forecast, which discovered that the demand for rental housing is actually outpacing the rate new apartment units are being constructed. The result? Apartment owners will have no choice but to increase their rates in the near future, and those in Southern California will be the first to feel the crunch:
Average rent in Los Angeles County is projected to increase 8.2 percent by June 2016, while Orange County rents are expected to increase 8.6 percent by then. Currently, Newport Beach’s average rent of $2,223 is the highest in Orange County, while Anaheim’s $1,300 average rent is the lowest.
This is why prospective tenants are advised to hurry in finding the best Temecula apartments that suit their tastes and their budget. That way, they’ll be able to enjoy the lower rents while they last, especially since the U.S. has an aging, and therefore less productive, population. Sycamore Terrace Apartments, in particular, hopes to keep the inevitable rent increases at bay for as long as possible, in order to provide families with the best quality of living that doesn’t break the bank. To that end, they’re launching a contest this November for a chance to win a $50 gift card just in time for Thanksgiving.
So what exactly influences apartment rates? The answer to this question varies from one place to another, but rent is generally determined by economic health, demographics, population growth, home construction, migration, and the distribution of wealth. That bit about America having an aging population is actually a big thing, since it also means that the country has far fewer big-spending consumers, thus more people venturing into the tight rental market.
A closer look at specific markets paints a much clearer picture. A 2001 study in Los Angeles discovered that the city’s apartment vacancy rates were mostly determined by low income and the lack of multiple family units, such as apartments. The lack of top-notch amenities, such as those found in quality apartments in Temecula, CA, also compels some tenants to leave. Having said that, only a small portion of the city’s population of tenants were elders and the majority are comprised by minority groups that typically have low income. This didn’t stop rental rates from increasing, similar to today’s projected increases due to problems in supply and demand.
Whatever it is that causes rents to go up, the fact remains that people should lock in the low rates right now while they still have the chance.
(Source: USC Casden Predicts Higher SoCal Apartment Rents, Multi-Housing News Online, October 09, 2014)