Friday, May 14, 2010

Los Angeles Apartment Vacancy Rate 5.4%, up .4% in 1 Year and 1.4% in 2 Years. Anyone Surprised? It Could Be So Much Worse.

Los Angeles Apartment Vacancy 2000 - 2010 
Updated May 11, 2011: See our updated analysis about apartment vacancy rates in Los Angeles, which now stands at 4.9%

Considering the recent economic turmoil and its impact on consumers' pocketbooks, the apartment vacancy data for the City of Los Angeles looks surprisingly robust.

From 2006 - 2010, vacancies have risen steadily from a baseline of 3.5% to the current 5.4%. Not great news for the average apartment owner, but certainly no reason to hit the panic button.

The vacancy breakdown of the four geographic areas in March 2010:

  • Central Los Angeles: 5.5% -- 416,000 units
  • San Fernando Valley: 5.2% -- 224,000 units
  • West Los Angeles: 6.1% -- 116,000 units
  • Harbor Area: 4.0% -- 31,000 units
The largest district, Central Los Angeles, includes neighborhoods like Wilshire (95,000 units, 5.4% vacancy), Hollywood (75,000 units, 6.1% vacancy), South Central (49,000 unit, 7.2% vacancy) and Silver Lake / Echo Park (18,000 units, a low 4.7% vacancy.) The lowest vacancy was recorded in Boyle Heights (3.8%).

The second largest district, the San Fernando Valley Area, includes North Hollywood (42,000 units, 5.1% vacancy), Van Nuys (37,000 units, 5.1% vacancy) and Sherman Oaks-Studio City (5.3% vacancy). The lowest vacancy was in Pacoima - Sun Valley (3.9%).

West Los Angeles, the third largest area, includes Palms-Mar Vista-Marina del Rey (35,000 units, 4.8% vacancy - the lowest in the area), West LA - Century City - Rancho Park (30,000 units, 5.3% vacancy), Westwood (15,000 units, 6.6% vacancy), Venice (13,000 units, 9.1% vacancy) and Westchester-Playa del Rey (12,000 units, 7.7% vacancy).

The Harbor Area, includes San Pedro (14,000 units, 4.4% vacancy), Wilmington-Harbor City (10,000 units, 3.0% vacancy) and Torrance-Gardena (7,000 units, 4.8% vacancy).

Our conclusions? Higher priced markets (Venice, Playa del Rey, Westwood) are suffering the highest vacancies as landlords fail to drop their rents sufficiently to attract and retain the new breed of thrifty tenant. More moderately priced areas (Palms-Mar Vista on Westside, for example) are recording low vacancy rates.

Vacancy rates are likely to peak in 2010 and gradually decline in 2011 as the pipeline of new dwelling units declines and as fiscally-stricken Angelenos begin to work again, and move off their roommate's couch or out of their childhood bedroom.

Data comes the Department of Water and Power and its records on individually metered apartments. We consider this the best reflection of the market, although it does not cover records from the cities of Santa Monica, Beverly Hills, West Hollywood, etc.