Apart from broader economic headwinds, Los Angeles County’s apartment sector faces several local happenings that will push year-end vacancy to its highest point since 2010.
Beginning in February, tenants across Los Angeles proper must pay their current monthly rent to avoid eviction, with a requirement to pay back all outstanding rent by August. While some tenant protections will remain, the expiration of the moratorium should place eviction activity beyond the pre- pandemic rate.
Meanwhile, the volume of units slated for delivery in 2023 will rise by 7,000 on an annual basis. Greater Downtown Los Angeles is the epicenter of up-coming completions. Here, an estimated 10,000 apartments will be added at a time when local Class A vacancy is on par with the long-term average. This suggests local concessions usage and luxury availability will rise over the near term. Elsewhere, Westside Cities and the Greater San Fernando Valley should also feel some supply-side pressure, with each expected to add more than 2,900 units. 
The wave of rental additions noted across the Los Angeles metro area should continue beyond 2023, as at least 50 conventional apartment projects broke ground last year. Activity in Class C-heavy submarkets reflects buyers’ outlook. Home to a nationally tight lower-tier vacancy rate despite its sizable inventory, the metro area will remain a focal point for investors targeting older complexes with fewer than 30 units. 
The recent approval of Proposition ULA — which places a 4.0 percent to 5.5 percent tax on the sale of properties valued at more than $5 million in the city of Los Angeles — may provide near-term opportunities for buyers targeting these complexes, if owners decide to dispose prior to the measure taking effect. 
Areas with some of the most affordable rents should continue to appeal to investors, as these localities should record stable demand for the foreseeable future. South Bay cities and Southeast Los Angeles may top investors’ lists, as each locale entered this year with 1 to low-2 percent Class C vacancy. 
Sources: Co-Star Group & Real Capital Analytic

Commercial Real Estate has remained Resilient according to JP Morgan-Chase

According to JP Morgan, while the future of the office is unclear, commercial real estate has remained resilient in the first half of 2023.


  • Multifamily rental costs rising more slowly:Multifamily properties are still going strong. The national vacancy rate for multifamily was at 4.5% at the end of 2022, according to Moody’s Analytics, even as the rate of rent increases fell. Vacancy rates vary widely across metro areas, but the median vacancy rate nationwide is 3.9% as of April.


  • Increasing affordable housing:The country’s affordable housing supply continues to lag far behind demand. A multipronged method to growing the housing supply is critical moving forward. Efforts may include finding creative ways to preserve, build and finance affordable housing—the primary focus of the firm’s Capital Solutions group—and working with public entities to create zoning variances that allow greater density in residential areas.


  • The strength of retail: E-Commerce accounts for roughly 15% of retail, but that doesn’t mean consumers can get everything online. There are still services that favor or even require in-person visits. For example, trips to the nail salon, barbershop and sports bar are still standard.


  • Industrial may be stabilizing:Fueled by e-commerce and an everything -on-demand economy, industrial has been booming for years.. While the asset class remains healthy, it may be starting to soften. The vacancy rate for distribution and warehouse space was 4.1% throughout the second half of 2022—a record low, as the rate has steadily declined each quarter since the end of 2020. The rate rose 10 basis points in the first quarter of 2023 to 4.2%.


  • Office space still up in the air:Remote and hybrid work have largely reduced demand for office space. Still, A-class properties are performing well. Office properties with leases of 10 years or more may be able to ride out the market correction. But B- and C-class office buildings—especially those located with shorter leases outside prime locations—face challenges as the workplace evolves.

Unaffordable Prices Are Back on Top as Most Common Reason Buyers Can’t Make Purchase
BY ROSE QUINT on FEBRUARY 1, 2023 • (0)

An earlier post revealed that 65% of buyers who were actively engaged in the process of finding a home in the fourth quarter of 2022 have spent 3+ months searching for a home without success. The inability to find an affordable home (45%) is the most common reason buyers looking for 3+ months can’t make a purchase. In second place follow the inability to find a home in a desirable neighborhood and getting outbid by other buyers (tied at 30%).
When asked what they are most likely to do next if still unable to find a home in the next few months, 46% of active buyers searching for 3+ months said they will continue looking for the ‘right’ home in the same location (down from 50% a quarter earlier); 38% will expand their search area (up from 35%), 23% will accept a smaller/older home (down from 33%), and 16% will buy a more expensive home (down from 28%).
Meanwhile, the share who plan to give up their home search until next year or later fell to 21%, down from 28% in the third quarter. This is the first time the share has declined in six quarters.
**Results come from the Housing Trends Report (HTR) – a research product created by the NAHB Economics team with the goal of measuring prospective home buyers’ perceptions about the availability and affordability of homes for-sale in their markets. The HTR is produced quarterly to track changes in buyers’ perceptions over time. All data are derived from national polls of representative samples of American adults conducted for NAHB by Morning Consult. Results are seasonally adjusted. A description of the poll’s methodology and sample characteristics can be found here. This is the final in a series of six posts highlighting results for the 1st quarter of 2022.

Measure Q Property Tax Increase


One of the biggest changes for Long Beach property owners will be a property tax increase due to Measure Q’s adoption in November.

The $1.7 billion bond measure will help modernize LBUSD schools and it will raise property taxes by $60 for every $100,000 of assessed value.

Tweaks to statewide housing law will also change how and where housing is allowed to be built in the city. Senate Bill 6 allows housing in areas generally permitted for retail or office space if the project meets certain requirements. Another law, AB-2097, will require cities to show proof that a parking minimum is needed for a project to avoid negative impacts to the neighborhood where it’s proposed.

If you’re looking to build an ADU, or accessory dwelling unit, in 2023, AB-2221 allows you to include a detached garage for your additional unit. Long Beach has an ordinance governing ADUs built in the city and has looked to speed up the approval process as the city tries to increase housing production.

Another new law will make it cheaper to tear out your lawn and replace it with native landscaping. Programs like the Long Beach Water Department’s Lawn-to-Garden initiative offer residents funds to help with those conversions, and under AB-2142 that money will no longer count as taxable income.

This article is posted with courtesy of Jason Ruiz of Long Beach Post


Housing market predictions: Six experts weigh in on the real estate outlook in 2023

If “hot” was the overused word to describe the U.S. housing market in 2021, then lukewarm to outright freezing might best describe how the market fared overall this year. 

The pandemic housing market boom, which saw home prices go up by 40% over a two-year period, began slowing down in the second half of the year as mortgage rates doubled compared to the beginning of the year.

As the Federal Reserve sought to tamp down decades-high inflation with rate hikes throughout the year, rising mortgage rates contributed to the growing mismatched expectations between buyers and sellers. Homes sat on the market for months as sellers continued to price homes at rates buyers could no longer affordContracts were canceled, asking prices were slashed and inventory levels dropped.

After crossing 7% in October, mortgage rates have been falling steadily over the last five weeks, which could offer some relief to buyers but might not offset still-high asking prices.

So, what’s ahead for the housing market in 2023? We spoke to six experts for their predictions:

The Federal Reserve and mortgage rates

The Fed raised its key short-term interest rate by half a percentage point Wednesday, a smaller hike than its previous four, as inflation showed signs of easing.

The Fed also indicated that the economy would be grappling with slower growth, higher unemployment and higher inflation in 2023.

Weaker growth typically leads to lower long-term interest rates, including mortgage rates, says Mike Fratantoni, chief economist for the Mortgage Bankers Association.

“The housing market has certainly welcomed the recent decline in mortgage rates,” he said. “This decline is reflecting market expectations of being near the peak for short-term rates, as well as increased signs that the U.S. is headed for a recession next year.”

Innovations in mortgage finance

Housing finance has reached an inflection point, says Janneke Ratcliffe, vice president of the Housing Finance Policy Center at the Urban Institute.

She expects to see innovation accelerate with lenders, startups, advocates, researchers, and policymakers actively pushing the envelope around what’s possible in mortgage finance.

“We’re seeing pilots and new programs around alternatives in credit scoring, artificial intelligence, climate adaptation, manufactured housing, and more,” she says. “Not only does the industry see the problems of inequality, but many players are also actively voicing their commitments to close the racial homeownership gap.”

Janneke Ratcliffe, vice president of the Housing Finance Policy Center at the Urban Institute.

Ratcliffe also expects to see increased use of adjustable-rate mortgages, which made up 12% of total applications in November, up from 3.3% in November 2021.

“Would-be homebuyers should not fear this financial instrument,” she says. “Their use has always been common, and regulatory reforms instituted after the Great Recession have substantially mitigated their risk.”

The latest on housing markets: Mortgage rates, home prices and affordability

No ‘foreclosure tsunami’

Foreclosure is the result of two simultaneous triggers: the lack of ability to pay, which results in delinquency and the lack of equity in a home, says Odeta Kushi, deputy chief economist for First American Financial Corp..

With enough equity, a homeowner has the option of selling the home or tapping into that equity to weather a temporary financial setback. The inverse – a lack of equity in the home without a financial setback that leads to delinquency – will again not end in foreclosure.

Homeowners have very high levels of tappable home equity today, providing a cushion to withstand potential price declines, but also preventing housing distress from turning into a foreclosure, says Kushi.

Odeta Kushi, deputy chief economist for First American Financial Corp.

“In fact, if distressed homeowners are required to resolve delinquency, given their equity buffers, involuntary sales are much more likely than foreclosures,” she says. “While we can expect the number of foreclosures to drift higher as the labor market slows and house prices fall from their peak, the result will likely be more of a foreclosure trickle.”

Housing inventory will remain low

The chronic lack of listing inventory has been the key driver of price gains during the pandemic-era housing boom, and it will be the key underpinning of prices during 2023, says real estate appraiser Jonathan Miller, who prepares the monthly Douglas Elliman Real Estate report for New York City.

“Listing inventory was piled to the sky in past housing downturns,” says Miller. “Consumers are wedded to the low rates they refinanced into or purchased homes during the boom. Excess supply is not the story for 2023 because, even with modest listing inventory growth, price declines should be kept to a minimum.”

Jonathan Miller, real estate appraiser

Redfin forecasts about 4.3 million home sales in 2023, which is fewer home sales than in any year since 2011 and a decrease of 16% year over year.

Declining home prices

While there will be no wave of foreclosures, home prices will decline in 2023, says Taylor Marr, deputy chief economist for Redfin.

Marr expects the median U.S. home-sale price to drop by roughly 4% in 2023. Even with prices falling 4% year over year, homes will be much less affordable in 2023 than they were before the pandemic homebuying boom, he says.

“Taking next year’s projected prices and mortgage rates into account, the typical homebuyer’s monthly payment will be about 63% higher in 2023 than it was in 2019, just before the pandemic began.”

Taylor Marr, deputy chief economist at Redfin

Home prices will decline the most in pandemic boomtowns while markets in the Midwest and Northeast will hold up best, says Marr.

Prices are expected to fall most in pandemic migration hotspots like Austin, Texas, Boise, Idaho, and Phoenix, as well as expensive West Coast cities. Meanwhile, housing markets in relatively affordable Midwest and East Coast metros, especially in the Chicago area and parts of Connecticut and upstate New York, will hold up relatively well.

“Those areas tend to be more stable than expensive coastal areas, and they didn’t heat up as much during the pandemic homebuying frenzy, meaning they also don’t have as far to fall,” he says.

New home construction outlook

Single-family housing starts are set to post a calendar decline in 2022, the first such drop in 11 years, despite a persistent structural deficit of housing in the U.S., according to the National Association of Home Builders.

Home builder sentiment, as measured by the NAHB/Wells Fargo HMI, has declined for 11 straight months, signaling an ongoing contraction for home building in 2023.

“Single-family home building will ultimately lead a rebound for housing and the overall economy in 2024 as interest rates fall back on sustained basis, bringing demand back to the for-sale housing market,” says Robert Dietz, chief economist for the National Association of Home Builders.

Dietz also expects multifamily construction volume will fall back in 2023, after a very strong year in 2022. Multifamily home building, which is more than 95% built-for-rent, experienced strength in 2022 as mortgage interest rates increased and for-sale housing affordability conditions declined.

“However, there are nearly 930,000 apartments under construction, the highest total since January 1974,” he says. “A rising unemployment rate, increased apartment supply, rising vacancy rates and slowing rent growth will slow multifamily construction next year.”

This article is posted courtesy of



Long Beach Rent Forecast

Over the next couple of years, Long Beach could continue to see rent increases, according to a new report from USC’s Lusk Center for Real Estate.

In Long Beach, where 60% of residents are renters, vacancies have dipped to under 5%, a trend that is mirrored in Los Angeles County, as well as Orange County, San Diego County, and the Inland Empire.

“The biggest driver of rents next quarter is vacancy in the previous quarter, so when vacancy is low, rents go up,” said Richard Green, director of the Lusk Center and co-author of the annual report, which was released earlier this month.

At the beginning of the pandemic, apartment rental prices barely moved, until 2021 and into 2022, when rents began to sharply increase, Green said.

Many Long Beach ZIP codes saw increases of 5% throughout 2021, and ZIP codes in West Long Beach in particular have experienced the largest increases over the past few years.

High inflation is a significant factor in the projected increases, which the report forecasts will happen more quickly than was typically seen prior to the pandemic.

“We expect rents to go up—maybe not quite as much as inflation—but still to go up in the next couple of years, and we’re looking at 5 or 6% in Long Beach per year over the next couple of years,” he said.

The report, though, did contain some caveats. Green noted that it can be difficult to truly assess potential outcomes based on the past two years, which have been unlike any other years in history, he said.

Contributing factors noted in the report also include the significant levels of outmigration from Long Beach and Los Angeles County, mostly consisting of lower-wage earners who relocated to more affordable locations such as Arizona and Nevada, Green said.

While outmigration has led to rapid growth in per capita personal income in the Los Angeles area, which has retained and attracted higher-earning workers, it is unknown if this trend of outmigration could continue in the coming years, and what the impact could be on the current and future forecasts.

“Long Beach, in some ways, is a microcosm of the region in terms of the demographics, the income inequality—Long Beach has some very wealthy areas like Naples, and not very wealthy areas,” Green said. “If you go back 30 years, people would call it a pretty affordable community, and I don’t know if you could call it that anymore . . . Just like in other Southern California cities, (the trend of climbing rental prices) creates a real challenge from a quality-of-life perspective.”

Nationally, median rent rose over 19% from December 2020 to December 2021 in the 50 largest metro areas, according to a assessment of properties with two or fewer bedrooms.

In Long Beach, the median rental price is currently $2,195—an increase of $200 since last year, according to Zillow.

This article in posted with courtesy to LONG BEACH POST

Apartment Rents Increase Slowing Down

For the first time since November 2021, U.S. median monthly rents failed to notch a new record high and even fell a little compared to the previous month — by $10, to $1,771, according to a report on August rental conditions from

But renters, don’t go breathing a sigh of relief quite yet.

While the pace of year-over-year rent increases appears to be slowing — last month marked the first period of single-digit annual rent growth in 13 months, as well as the first slide in median asking rents since last November — tenants are still struggling under higher-than-usual housing costs.

The median rent growth for 0-2 bedroom units over the 50 metropolitan areas examined by slowed to 9.8% year over year, but rents still grew three times as fast as before the pandemic.

Rents fell slightly — by 0.1% — in August from July for the first time since November 2020, a separate report from real-estate research company CoStar Group found.


The power of wage increases earned during the tight labor market has also been diminished by the worst inflation rate in decades. Meanwhile, credit-card balances are increasing and the personal savings rate is declining.


Renters earning a typical household income were putting 26.4% of their money toward housing in August, compared with the 25.7% they spent last year,’s report said. That means they’re marching closer to the edge of a common affordability standard: spending no more than 30% of one’s monthly income on rent.

“Our analysis underscores the very real rental affordability challenges that many Americans face today. Rents are significantly higher than in previous years and are taking up a substantial portion of incomes, which are growing at a slower pace than inflation,” Chief Economist Danielle Hale said in a statement.

A handful of cities were well past accommodating the 30% rule, too. Of the country’s top 50 metros, 9 had a rent share higher than 30% relative to the typical household income in August, said. In the most extreme case, tenant households with a typical household income in Miami could expect to put 46.5% from their monthly income toward a typical rental, with median prices at $2,626.

While median one-bedroom rental prices have predictably skyrocketed in some of the country’s most expensive cities year-over-year, hitting $3,930 in New York City and $3,040 in San Francisco this month, tenants in smaller cities like Fresno and Tulsa have also faced big increases of about 40%, according to separate research by Zumper, an apartment-rental website.

(Zumper’s data also shows rents in New York City, which boasts the highest prices in the country, vary by borough. The median rent for a two-bedroom in Brooklyn has jumped to $4,506, a staggering 61% year-over-year increase, while two-bedrooms in Manhattan are up 33%, hitting $5,283 in August.)

“Still, there are some bright spots for renters as of late,” Hale said in a statement. “Based on the general rule of thumb that you should keep housing costs to under 30% of your paycheck, renters were able to follow best practice in the majority of large metros in August.”

“Plus, as rent growth continued to cool, national rents didn’t hit a new record-high for the first time in nine months,” she added. “If these trends and typical seasonal cooling persist, renters may be better able to keep housing costs to a relatively manageable portion of their budgets in the months ahead.”




Price Declines Expected in 39% of U.S. metros in 2023, mostly in the Western region, according to Goldman Sachs

We are expecting price declines in 39% of U.S. metros in 2023, mostly in the West region

Bell Gardens, California Inacted Rent Control on Apartment Buildings

On Monday night, Bell Gardens became the latest city to take action. Its city council unanimously voted to advance a rent control plan that limits annual increases to no more than 4%.

Pomona’s city council also recently capped annual rent increases at 4%.

The Bell Gardens proposal still needs a final vote of approval. Once the plan is finalized, tenant advocates say Bell Gardens will become the first city in Southeast L.A. to enact rent control.

“[Bell Gardens] is essentially a tenant, low-income community, heavily Latino,” said Martha Pineda, an organizer with California Latinas for Reproductive Justice, one of the groups that advocated for rent control in the city.

According to the U.S. Census Bureau, 96% of Bell Gardens residents identify as Latino. More than one-quarter are experiencing poverty. To cover rent, “most folks will say that they've already talked about cutting down food costs, they've already talked about medicine costs,” Pineda said.

In the past, she said, “rent hikes have essentially displaced a community that's lived [in Bell Gardens] for decades.”