USC Report Claims Rents will be Unaffordable, even with Rising Wages
In October, the annual USC Casden Real Estate Economics Forecast was released and its findings aren’t too good for Sothern California residents. Apparently, rents will keep rising over the next two years because the supply of apartments is tight and not enough new housing is being built. In Los Angeles County, the average monthly rents are expected to rise to $2,373 by 2019, which is up $136 from the 2017 average. According to Richard Green, director of the USC Lusk Center for Real Estate, wages have been growing faster than housing prices over the last two years, which have made rents easier to tolerate. However, Green stated,
So income growth goes back to growing 2 percent a year and rents are going up 3 percent a year. You’ll see us starting to fall behind again.
Green believes that the rising wages will not keeping increasing enough to further lower the burden of increasing housing prices. In other parts of Southern California, monthly rents are also expected to increase by 2019. For instance, monthly rents are projected to jump $149 to $2,157 in Orange County; $124 to $1,573 in the Inland Empire; and $121 to $2,048 in San Diego County. Unfortunately for Los Angeles, it also has one of the lowest home ownership rates of any major market. Hopefully something is done so that more people are not forced out of their homes due to increasing rents.