Snapshots

Strong demand supports multifamily development

With the number of renters increasing in the current cycle, developers have been rushing to meet demand. Los Angeles homeownership ranks at the bottom nationally with only 49 percent of people owning a home.

los-angeles-strong-demand-supports-multifamily

With the number of renters increasing in the current cycle, developers have been rushing to meet demand. Los Angeles homeownership ranks at the bottom nationally with only 49 percent of people owning a home. This is well below the national average of 64.5 percent. Median home prices have increased 40 percent over the last five years, pricing out a large number of home buyers and creating more renters. The rising popularity of urban living has also spurred the need for additional apartments in urbanized areas like Downtown and Hollywood, where 37 and 31 percent of the population are Millennials.

Although Downtown has the largest construction pipeline, Los Angeles North came in second. A large swath of the Los Angeles population lives in the region and some densification is taking place in micro-markets such Warner Center and Woodland Hills. In one of the more notable projects underway, the Warner Center Promenade, a $1.5 billion mixed-used complex, 1,432 residential units will be an integral part of the project. Additional residential construction is justified throughout the LA basin as the market is not oversupplied and demand fundamentals are expected to remain strong.

Source: JLL Research

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