Occupancy Losses Continue After the First Half of the Year
A residential area near downtown Los Angeles. (Getty Images)
By Ryan Patap
CoStar Analytics
August 20, 2024 | 1:21 P.M.
While the Los Angeles apartment market vacancy rate has remained steady this summer, hovering around 5.4% since late June, the figure could offer landlords a data point for cautious optimism that the market may improve.
But it will still take several more months to see if the climbing vacancy that has plagued the market since early 2022 is actually over.
The first half of 2024 saw continued occupancy losses, as year-to-date renter demand of around 2,000 units was insufficient to absorb the approximately 5,000 units added. Softer economic conditions are a crucial factor driving low year-to-date demand.
L.A.'s unemployment rate, one of the highest in the nation, is one of those economic conditions. Entertainment and tech firms — both traditionally large regional employers — have faced job losses over the past year. Entertainment employment has been slow to rebound from the strikes of 2023. The U.S. Bureau of Labor Statistics shows that information sector employment, where most jobs in both sectors fall, in July 2024 is down around 25% from a peak in early 2022.
Population loss is another variable. The most recent census data showed slight growth in Los Angeles County; however, over the past five years, it has declined by 3.3%, around 340,000 people. These losses limited household formation, especially in contrast to higher-growth Sun Belt markets.
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