It’s not like renting a place to live in L.A. is cheap now—it’s already a stretch for many Angelenos—but it seems like it might be a good idea to brace yourself for prices to shoot up even more. According to a new study, average rents are likely to gain an additional 5.4 percent in 2017.
Curbed reports that the data collected by real estate firm Marcus and Millichap in its 2017 National Multifamily Index suggest that an average apartment in Los Angeles will be renting for $2,095 by the end of this year, the biggest jump they expect for any U.S. city.
Their projection that rates will go up comes from some basic rules of supply and demand. Right now, the vacancy rates of local apartments are at a really low point, with no sign of letting up. Just 2.6 percent of apartments are expected to be open at any given moment this year. That creates a lot of competition for available units as new people keep moving to the city.
Add on top of that existing crunch the rate of construction on new rental units has already slowed down, and, if Measure S passes next month, might be put almost entirely on hold for two years. That means that there won’t be a whole lot of new affordable apartments opening, which would have taken some of the price pressure off rentals in the most desirable neighborhoods.
If you already have your lease locked in, your landlord can raise your rent by 3-10 percent (plus one extra percent if your landlord also covers all your utilities) per year, but if you’re in the market for a new place to live, be sure to prepare for prices that might look a bit higher than you’re used to.
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