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Report: Rents dropping in Southland

April 8, 2009 11:30:34 AM PDT
House prices have been falling in Southern California for several months now, but according to University of Southern California researchers, the prices of apartment rentals are falling as well.In Los Angeles County, rental prices fell an average of 3.8 percent in 2008. In the Inland Empire last year, the average rental price dropped 4 percent.

The reason? Simple economics: High supply, low demand.

"In L.A. County alone, 41,000 people moved out of apartments last year, compared to the 29,000 who moved in the past five years," Delores Conway, from USC's Lusk Center for Real Estate told City News Service.

"The dramatic changes in the economy are taking their toll on landlords, who are lowering rents or giving concessions just to keep their units occupied," Conway said.

The study found that many people who became unemployed moved in with family or friends.

Researchers found that the average monthly price for a one-bedroom apartment in Los Angeles was $1,397 last year. The average in Orange County, where rents dropped just 2 percent last year, was $1,310.

The biggest drops were in the Inland Empire, where occupancy rates hit a 10-year low last year, and one-bedroom apartments rented, on average, for $912 per month.

Researchers predict prices will continue to drop through the remainder of 2009 and stabilize in 2010, assuming the broader economy recovers.