Santa Monica Rents Expected To Climb As Renters Leave LA

LOS ANGELES, CA — Southland apartment renters are in for a rude surprise over the next couple years thanks to dramatic market shifts triggered by the pandemic, according to a USC Casden Economics Forecast released this week. Monthly rents are expected to rise by hundreds of dollars in some Southern California regions.

The global coronavirus pandemic has triggered dramatic shifts in the Southern California rental market, driving people from LA's city center to the surrounding suburbs. As a result, rents are expected to spike, and the further away from the heart of the city, the more rent will go up, according to the economists.

According to researchers, "Some patterns are quite pronounced. The farther one gets from the city of Los Angeles, the greater seems to be the potential for rent growth. The model forecasts modest further rent declines from Downtown Los Angeles moving west to the Pacific Ocean. The most substantial gains are in the Inland Empire followed by the southern end of Orange County, Ventura County and suburban San Diego County."

As demand for suburban living grows, so do vacancies in the city. The rent fluctuation is an issue of supply and demand.

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"COVID-19 caused a large-scale move from central cities to the suburbs that resulted in a sharp rise in apartment vacancies in Downtown L.A., Koreatown and Beverly Hills and historically low vacancies in Rancho Cucamonga, North City San Diego and Oxnard," USC Lusk Center for Real Estate Director Richard Green, co-author of the forecast, said in a statement. "While vacancies are coming back down in urban areas, the outskirts remain low and supply and will see rents go up at a much higher rate than the cities."

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The forecast predicts that by the end of the third quarter in 2023, rents will increase by $252 over the current level in Los Angeles County, $410 in Orange County, $348 in San Diego County, $310 in Ventura County and $241 in the Inland Empire, including Riverside and San Bernardino.

According to the report, rental markets with vacancy rates below 5% can anticipate rent increases. Downtown Los Angeles, Koreatown and Beverly Hills are all currently above 5%, but those areas can expect to see moderate rent increases thanks to "high absorption rates," the report found.

Areas with exceedingly low vacancy rates -- such as Rancho Cucamonga at 1.69%, Oxnard at 1.86% and North City in San Diego County at 1.56% -- can expect to see triple-digit rent hikes, according to the report.

The report offered predictions in rents and vacancy rates in Southern California's major market areas.

Los Angeles County has a current average rent of $2,073, with a 3.9% vacancy rate, with the average rent predicted to rise to $2,325 by 2023, with the vacancy rate holding steady. The Orange County average rent is predicted to rise from the current $2,439 to $2,849, with the vacancy rate rising from 2.1% to 3.7%.

In San Diego County, the current $2,144 average rent will rise to $2,492, according to the report, with the vacancy rate going from 2.5% to 3.4%. The Inland Empire's average rent will rise from $1,827 to $2,068, with the vacancy rate holding steady at 1.9%, according to the report.

City News Service and Patch Staffer Paige Austin contributed to this report.