Apartment rents fall in Southern California

L.A. County rents sank almost 4% in 2008, and job losses continue to hurt demand as new construction inflates supply.

Apartment rents are falling across most of Southern California as unemployed tenants double up with friends or family and the affordability of foreclosed homes makes some renters into buyers, a new survey has found.

The average rent in Los Angeles County fell almost 4% in 2008 as apartment occupancy rates dropped and new units came online. The decline should continue this year as more renters lose their jobs, according to the annual USC Casden Forecast expected to be released by the university today.

"In L.A. County alone, 41,000 people moved out of apartments last year compared to the 29,000 people who moved in during the last five years," said forecast director Delores Conway.

To keep their units occupied, some landlords are lowering rents or offering concessions for signing a lease, such as a month of free rent or a reduced deposit, she said.

More Stories of Falling Apartment Rents

New York
Declining Manhattan rents are taking a toll on Equity Residential, a large real estate investment trust that owns 47 apartment buildings in the New York metropolitan area.
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Since February alone, Equity Residential has lowered its Manhattan asking rents by an average of 13%, said Michael Levy, an analyst at Macquarie. That reduction came on top of a 15% cut over the previous year.

San Diego
Tradition, an apartment complex near the Aviara Golf Course in Carlsbad, has cut its asking rent for a three-bedroom apartment from $2,015 to $1,799 per month, said Kris Nelson, business manager for the complex.

Tradition has seen its vacancy rate rise from a fairly consistent 3 percent to 8 percent recently, Nelson said.
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In Temecula, Somerset Apartments has seen its vacancy rate shoot up from 3 percent to 20 percent. Managers responded by slashing rents by 25 percent for two bedroom, two bath apartments ---- from $1,200 to $900 per month.