Downtown News: Much Ado About Downtown Housing Vacancy

Downtown News: Much Ado About Downtown Housing Vacancy
October 10, 2017 Peter

The Downtown Los Angeles construction boom has produced a glut of new apartments, and despite a steady influx of residents, the community has seen its vacancy rate soar to levels not seen in decades. The Downtown vacancy rate is currently at 11%, according to real estate analysis firm CoStar Group. That far exceeds the roughly 4% rate in Los Angeles County, and is almost double the second-highest submarket vacancy rate, Hollywood’s 5.8%. The situation raises a natural question: Is the red-hot Downtown market finally cooling down with falling rents, or is this just a temporary dip as recently opened apartments are filled? Downtown construction appears to be hitting a crescendo: Inventory growth that averaged around 3% annually since 2010 spiked to 8.5% between the second quarter of 2016 and the same time this year, with nearly 3,500 units completed, according to an analysis by property management firm RealPage.

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