VICTORVILLE – Inflation, rising interest rates and changing migration patterns make it “hard to predict the future”, says the USC Casden Multifamily Forecast report. Rents are predicted to rise fastest in the High Desert – by 17% to $1,543 a month by the summer of 2024.
The report, released Thursday, Nov. 10, predicts smaller rent hikes and higher vacancy rates through the summer of 2024 for Los Angeles and Orange County.
“The reason we’re forecasting the slowdown is we’ve had some serious out-migration, particularly from LA County,” said USC Lusk Center for Real Estate Richard Green. “That’s relieved some of the pressure. Vacancies are rising a little bit, but not by enough that you’re going to see a decline in rent.”
The High Desert is seeing the effects of this migration out of Los Angeles County.
Out of the four counties outlined in the report – Los Angeles, Orange, Riverside and San Bernardino, rents are forecast to rise fastest in the High Desert.
This area includes north of the San Bernardino city limits to Victorville and west to Twentynine Palms. The average rent for a vacant apartment is projected to rise 17% to $1,543 a month by the summer of 2024.
The report says that rents are rising fast in the Inland Empire because job growth is outpacing apartment construction.
The percent of Inland Empire households paying more than 30% of their income on rent — was 55% as of 2020.
“The high number of people who must pay more than 30% of their income in rent may lead the Inland Empire to become like Los Angeles and Orange counties,” the USC report said. “The only remedy for this would be a substantial increase in new construction.”
Forecasters say one thing that can alter their findings is “a serious recession,” sparked by the Federal Reserve raising interest rates.
“If we see a lot of layoffs, then of course, all of this changes,” Green said. “People will move back in with their parents or they’ll double up, and then that could lead to more vacancies, and that could lead to weaker rents. … That, to me, is the big unknown out there.”