The Los Angeles area maintained its grip on the title of most expensive rental market in the West during the third quarter with its lead over the Bay Area continuing to grow, an industry tracker said.
But housing prices have hit such high levels that renting an apartment still looks like a bargain, said RealFacts, a Novato-based research firm that specializes in the apartment market.
Average rents in the Los Angeles, Long Beach and Santa Ana area edged up by 1.9 percent during the third quarter from the prior three-month period and jumped by 6.3 percent from a year ago, the company said.
At the same time, housing prices have increased by 20 percent or more from a year earlier in many communities across the state.
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And while for-sale housing stock has dwindled, apartment occupancy rates in the Los Angeles area have held steady at about 95 percent for the past three years, the company said.
That level represents a market in balance, said Chris Bates, the company’s investment analyst.
“The renters don’t have to give their first-born, and there is enough of a demand that landlords have an opportunity to increase rents at an acceptable rate,” he said.
RealFacts tracks apartment buildings of 100 units or more. The Los Angeles survey includes 1,001 buildings: 100 considered Class A — those built in the last 10 years; 280 Class B, built in the last 20 years; and the balance Class C properties, built at least 30 years ago.
Los Angeles supplanted San Francisco atop the high-rent list in the first quarter of 2004, with L.A. rents averaging $11 a month more than those up north.
At the end of the third quarter, the gap was $102 a month.
The company surveyed 29 markets between the Pacific Ocean and Indianapolis, Ind. Seven markets — all in California — had rents averaging more than $1,000 a month.
Rents declined from a year ago in two markets, Colorado Springs and Tucson, and remained flat in two, Denver and Oklahoma City.
The least expensive market was Oklahoma City, with an average rent of $530 a month.
RealFacts said that there are few signs that this trend will change, so most renters will have stable rents and supply.
But renting remains less advantageous in expensive markets like those in Colorado.
Lawrence Souza, chief economic consultant for the Sacramento-based California Apartment Association, said that rents are higher in the Los Angeles area because of the region’s more robust economy.
The Bay Area took a big hit from the tech-bubble burst and is still struggling to create jobs.
“Southern California has a more diverse economy. And I think a lot of people who were living . . . in Northern California migrated to Southern California because there were jobs being created,” he said.