by Calculated Risk on 7/05/2009 09:43:00 AM
Sunday, July 05, 2009
Apartment Rents Decline in Los Angeles
From Lauren Beale at the Los Angeles Times: Vacancies give renters room to negotiate
The first quarter saw the largest rent decline in a decade for Los Angeles County, Reis' [Victor Calanog, director of research] said. Effective rents, those that take concessions into account, fell 1.7% in the first quarter of this year from the fourth quarter of 2008, while asking rents dropped 1%.And vacancy rates are rising:
The rate climbed to 5.3% in the first quarter from 3.8% in the first quarter of 2008, said [Reis' Calanog] ... In contrast, vacancies had been hovering between 2% and 3% for the last decade.Declining rents puts more pressure on house prices ... and rents could continue to fall through 2010.
...
The last time vacancy rates were this high in Los Angeles County was in the early 1990s, when they hit 5%.
Here are some comments from BRE (a REIT) in February:
We believe we are looking at a negative rent curve for the next two years.
We believe on a composite basis, market rents in 2009 could fall between 3 and 6% from peak levels in 2008. And the rent cuts in 2010 could be deeper ...