Los Angeles apartment property buyers rejoice. The pundits predict that the Los Angeles metro area multifamily market will continue to record steady economic growth through major construction projects, a rebound in tourism and continued expansion in the entertainment industry.
If you already own, rental returns are satisfying. Apartment rents in Los Angeles rose 6.2% last year, according to the USC Lusk Institute. Tight leasing conditions will push rent growth up 4.1% in 2013 and 5.1% in 2014. The average rent will advance from $2,172 per month in 12-12 to 2012 to $2,376 per month by December of 2014.
With that kind of return on investment, apartment properties are still in strong demand in Los Angeles.
“…Investors are moving beyond core properties and driving up pricing at the lower end of the market,” observes Dr. Ruijue Peng, author of the CoStar Commercial Repeat Sale Indices.
The idea of investing in multifamily properties is popular. Have you noticed all of the new construction around town? A large pipeline of new apartment product will enter lease-up in 2013 and 2014. Overall, developers added 1,670 units in 2012, but that was baby growth. West Los Angeles inventory will increase by 3,000 units by the end of this, with significant development occurring in the Santa Monica, Hollywood, Brentwood/Westwood and Airport Cities submarkets. Completions will tick down to 2,600 units in 2014.
Net move-ins of 2,560 units is anticipated for 2013 and net absorption of 2,610 apartments is forecast for 2014. Solid leasing trends in 4Q 2012 resulted in 480 newly occupied units, boosting 2012 absorption to 2,100 units, the highest number of net move-ins since 2004. 2011 saw 1,275 units absorbed into the marketplace.
Robust development activity will make life easier on local planning departments. Annual multifamily permit issuance will slip to approximately 2,600 units in 2013…but leap to 4,675 multifamily units during the following year.
The strength of the multiunit market place has pushed the median sold price of apartment properties in Los Angeles up 25% when comparing 1-11 with 1-13, according to Clarus Market Metrics. Meantime, the number of Under Contract properties is up 31%. Desire is up, get yours while there are good options to be had.
We’re here to help you with your property needs. Please contact Jodi Summers and the SoCal Investment Real Estate Group @ Sotheby’s International Realty – email@example.com or 310.392.1211, and let us move forward together.
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