As Office Work Returns, the L.A. Apartment Market Is Expected to Heat Back Up

As Office Work Returns, the L.A. Apartment Market Is Expected to Heat Back Up

BY KIRSTEN CHUBA | HollywoodReporter.Com

Troy Warren for CNT #RealEstate

With entertainment employees who left town during the pandemic required back at offices in coming weeks, “it’s going to be a reversal of the downtrend we’ve seen.”

I felt like there wasn’t much reason to be in a city if I couldn’t leave my apartment and go to work,” says Sean Campbell, an assistant at talent and literary agency Verve, who went to visit his family in Novato, California, during the pandemic and ended up staying, trading in Los Angeles cityscapes for mountain biking and access to nature.

And he’s not alone. As agencies, studios and most companies in and outside entertainment worked from home for the past 15 months, large swaths of 20-somethings left Los Angeles behind, moving back in with families or into cheaper, less-central areas to save on costs.

The city’s rental market felt that hit. “There was no demand to move into these more urban areas with everything shut down,” says Apartment Guide managing editor Brian Carberry. Apartment Guide’s May 2021 Rental Report found that L.A. has the second-biggest decrease in one-bedroom rent prices year-over-year, behind only San Francisco, at 18.4 percent down.

But, with California’s June 15 reopening and many entertainment companies set for an in-person return in late summer or early fall, the market does appear to be rebounding as those who left flock back to L.A.

“It’s way more affordable,” says UCLA real estate professor Eric Sussman, “and you have the light at the end of the COVID tunnel, so those younger residents are moving back.” Studios and one-bedroom units — the hardest hit in 2020 — are starting to fill up throughout the city, and rents are beginning to level off, slowly bringing the market back to its pre-pandemic high point.

According to online apartment finder Zumper, median L.A. rents in May stood at $1,970 for a one-bedroom and $2,670 for a two-bedroom. By comparison, in April 2020, Zumper found one-bedrooms averaging $2,250 and two-bedrooms averaging $3,040. December 2020 marked the first time since 2016 that median rent for a one-bedroom apartment dipped below $2,000, and March 2021 saw the first one-bedroom rent increase in a year.

Real estate data provider CoStar reports that the L.A. County apartment vacancy rate in June 2021 has also declined — to 5.8 percent after hitting a high of 6.2 percent in November.

These trends come just as L.A. County extended California’s eviction moratorium, originally set to expire June 30, through September, which Carberry says could result in more available units and continued raised rates when it is eventually lifted. Sussman says, “It’s going to be a reversal of the downtrend we’ve seen.”

ViveLA, which manages apartment complexes in West L.A., Hollywood, Koreatown, Echo Park and the San Fernando Valley, has witnessed an increase in the number of leases during the past two months, particularly on one-bedroom units, says customer service specialist Lana Stevens. After a number of residents moved out of L.A. and back home in 2020, and before the recent rebound, the properties significantly decreased their rates, she says, starting at $1,695 for a studio and $2,250 for a one-bedroom. She adds that although most tenants will return to in-person work over the coming weeks, many are looking for units that can accommodate working from home.

Campbell says he is starting to look for places on the Westside, while Mariah Wilson, another Verve assistant, is moving back to L.A. from her home in San Diego and looking for “a bigger space.”

“Pre-pandemic, I was fairly opposed to a roommate,” says Wilson, “but now I think it is better to be surrounded by people and have the support of folks when going through rough patches of life.” She also hopes for a patio to be able to go outside.

As Angelenos return at different times to different in-person work requirements, Carberry also expects that “we might see some new hip neighborhoods cropping up as people decide that they’re looking for something different than purely that location where they had to be before.”

At a time when the sky-high housing market puts ownership out of reach for many, “a lot of people are going to see this as a great opportunity and are going to really try to scoop up some of these low-priced apartments, especially in certain neighborhoods that are really hard to get into,” Carberry adds. “There are going to be a lot more steals to be found, and those are going to go very, very fast.”

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By Troy Warren

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