Rental housing in LA, demand exceeds supply, and this trend is expected to continue. Rents are still rising and vacancies are declining. Cap rate are low: high 3% to mid 4% in good areas. California has about 13% of the nation’s population and has above average population growth. Yet for more than 20 years California has accounted for only 8% of all national building permits. CA’s housing squeeze has gotten worse while policies like rent control and inclusionary zoning have been failures.
Volatility in the stock market has made people nervous, shifting investors’ attention to alternative investments including real estate. The appetite for luxury homes is slowing.