The 2021 University of Southern California Casden Spring State of the Market Forecast paints a dismal picture for the future of rent prices in 2022. The report, which is issued annually, "describes trends in the multi-family residential real estate market and analyzes relationships among market demand, supply, prices, and policies." And this year's report shows sizable rent increases in many areas in the Southern California area.
The Casden Market Forecast measures and analyzes the ever-changing real estate market using economic theory and state-of-the-art data analyzing tools. This year's forecast was released recently and predicts significant rent hikes in a majority of areas in Southern California.
The most significant rent increases the forecast predicted are said to take place in Southern California's Inland Empire. The market forecast shows a 7.4%, 9.4%, and 9.9% average rent increase for Palm Springs-Indio, West Riverside County, and Rancho Cucamonga-San Bernardino, respectively. This means a one-bedroom apartment in Palm Springs renting for $2,500 in 2021 is predicted to be as high as $2,685 in 2022.
Another area forecasted to be hit hard by rent hikes in 2022 is the Ventura area - inclusive of Oxnard-Point Hueneme and Simi Valley. The one-year average rent increase predicted for this area in 2022 is an average of 5.5%. Similarly, the Orange County area, inclusive of La Habra, Anaheim, Huntington, and Irvine, is predicted to experience 3.1%, 3.7%, 4.4%, and 6.2% rent increases, respectively.
One of the only areas expected to see a drop in the one-year averages of rents is the Los Angeles area. The Casden Market Forecast predicts about a 1% drop in rent prices in 2022 for Koreatown, Inglewood, Beverly Hills, and the Downtown Los Angeles area. The remainder of the areas in Los Angeles are predicted to see a modest increase in rent prices ranging from 0.6% in the Burbank area to 3.4% in the Palmdale area. Additionally, San Diego and the surrounding areas (coastal, inland, Chula Vista, and North County) are predicted to see an average rent increase of 4.45%.
The results of this forecast are, of course, just predictions for the coming year, however, the data points included in the study are significant. The forecast incorporates data from the Federal, state and local government inclusive of the U.S. Census, Bureau of Economic Analysis, Bureau of Labor Statistics, Office of Federal Housing Enterprise Oversight, California Economic Development Department. They also incorporate data collected from private industry.