Home Prices in Los Angeles County Keep Many in the Rental Market According to NAI Capital’s Multifamily Market Outlook
Los Angeles, CA, Tuesday, June 06, 2017– According to NAI Capital’s Multifamily Market Outlook, demand for multifamily housing held tight in the first quarter of 2017 – amid a surge of newly completed supply added to the market. The vacancy rates remained low and rents continued to rise. Market fundamentals remain strong, investors and developers continue taking notice. Driving the market is the growth in household formation exceeding the supply of housing units which is causing vacancy to remain at historic lows and rents to hit record highs. In addition, the affordability of a median home in Los Angeles County is keeping many in the rental market.
Key indicators for the Los Angeles multifamily housing market remained strong in the first quarter of 2017:
- Average asking rental rate registered $1,778 per unit, up 4.0% over last year
- Vacancy (3.3%) was unchanged over the quarter, up 10 basis points over last year
- 14,065 units sold this quarter up 19.0% over the prior year
- Sale prices averaged $233,061 per unit, up 9.8% over last year
- Cap rates fell 26 basis points over the year to 4.4%
- 1,120 new units delivered this quarter, up 81.2% over first quarter 2016
According to Executive Vice President, Tim Steuernol with NAI Capital’ Multifamily Services Group, “It’s exciting to see the continued strength of the multifamily market in Los Angeles County. Sellers are capitalizing on historically high prices due to low interest rates, high rents, and strong demand from local investors, 1031 exchange buyers, institutions and foreign capital. We live in an area where affordable housing options are very limited. It creates a wealth of opportunity for apartment owners to capitalize on a massive renter pool with the ability to pay rents at levels often higher than a traditional mortgage. As long as interest rates remain low and the job market is robust; I don’t’ foresee a slowdown in the market any time in the near future.”
To access the full Los Angeles Multifamily Market Outlook report, visit:
About NAI Capital
NAI Capital is the largest independently owned full service commercial real estate firm headquartered in Southern California. As one of the largest members of NAI Global, the premier managed commercial real estate service network with 400 Offices and 7,000 market leaders spanning the globe, NAI Capital provides a complete range of transaction, valuation, investment, property management and consulting services. By leveraging our local expertise with our global reach, NAI Capital offers innovative, customized solutions and seamless service to owners, tenants, investors and developers throughout Southern California. NAI Capital clients have built their businesses on the power of our expanding network. We are a dynamic growing commercial real estate company. At NAI Capital we work together putting our clients first.
NAI Capital Brokerage CA BRE #00806840.
To learn more, visit www.naicapital.com
About NAI Global
Founded in 1978, NAI Global is a leading global commercial real estate brokerage firm. NAI Global Offices are leaders in their local markets and work in unison to provide clients with exceptional solutions to their commercial real estate needs. NAI Global has more than 400 Offices strategically located throughout North America, Latin America, Europe, Africa and Asia Pacific, with over 7,000 local market professionals, managing in excess of over 425 million square feet of property. Annually, NAI Global completes in excess of $20 billion in commercial real estate transactions throughout the world.
NAI Global provides a complete range of corporate and institutional real estate services, including brokerage and leasing, property and facilities management, real estate investment and capital market services, due diligence, global supply chain and logistics consulting and related advisory services.
To learn more, visit www.naiglobal.com.
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