The report from the University of Southern California, as highlighted by the Orange County Register, projects a 2-4% increase in rents across Southern California.
USC’s Casden Multifamily Forecast indicates that Los Angeles, San Diego, Riverside, and San Bernardino counties will see rent hikes lower than the average, with Ventura County experiencing average increases. Orange County, noted for its dynamic rental market, is expected to witness rent growth slightly higher than average, potentially reaching $2,800 monthly by late 2025.
For the years 2024-25, the rent increase rate is predicted to be less dramatic compared to the pandemic period, which saw annual increases of 12-18%. However, the trend is expected to pick up in the subsequent years due to a decrease in apartment construction, as per USC’s Lusk Center for Real Estate.
Landlords are facing impending financial challenges, as per the forecast. The need to replace maturing low-interest loans in the coming four years, coupled with high interest rates and rising operational costs, might lead to foreclosures and a reduction in the housing supply.
The forecast also predicts vacancy rates to hover between 4-6% in the next couple of years. The industry’s financial struggles could lead to a dip in the availability of new housing, resulting in tighter vacancy rates and increased rents.
Lastly, the forecast underscores the ongoing rental housing shortage in Los Angeles County, a chronic issue. Despite the above-average number of units built in the last year, the county still faces difficulties in meeting housing demand.
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The Ohtani contract is for $700m over 10 years.