Southern California Rents Are UP
Should You rent or buy? This is a question many would-be homeowners ask themselves. All too often You are left with the thought that owning is simply unaffordable. Fortunately, I have news for anyone who is “on the fence” about buying or renting; the decision to buy might become a little easier, as a new study from USC predicts that rents will rise over the next two years.
According to the research performed by USC’s Lusk Center for Real Estate, rents across Southern California are expected to rise significantly by 2016 – the latest reminder of growing affordability difficulties throughout California.
In Los Angeles County, it’s expected rents will jump by 8.2% by 2016, increasing to an average monthly rent of $1,856. Similarly, rents are expected to increase by 8.6%, 9.9% and 6.9% across Orange County, the Inland Empire and San Diego County respectively.
On average, the SoCal region is expected to see an 8% bump, increasing faster than the 3%-4% rise we’ve seen this year, or more than 10% since January 2013.
What impact will higher rent have on the housing market? While the study from USC suggests that rental vacancy rates will slightly decline, many RE professionals are certain that this bump will be enough to drive some renters back into the buying market.
Richard Green, director of the Lusk Center, commented on the matter saying, “Though the economy and employment have improved, renters’ incomes are stagnant. So while net absorption and occupancy rates are moving in the right direction, affordability continues to worsen.”
In South Orange County, we are presently entering the Fall buying season, during which prices tend to become more negotiable. ( I usually recommend this time of year – until the end of January – as THE best time of the year to buy a house.) Softer, more negotiable prices, combined with historically low interest rates, make for an unusually good environment, for buyers. If you’re even just in the thinking about it stage, this might be a good time to get serious, and give me a call.