USC Forecast Predicts Troubling Times Ahead for Rents and Financing in Real Estate
Over the next two years, multifamily rents are expected to rise throughout Southern California, according to the Lusk Centre for Real Estate at the University of Southern California. This suggests that financing for commercial real estate may face obstacles.
The forecast’s author, Moussa Diop, an associate professor of real estate at the USC Sol Price School of Public Policy, predicts modest rent growth in the near future. Though refinancing loans at nearly double the original interest rates presents challenges, worries about the approaching wave of maturing debt in commercial real estate are warranted.
According to the USC analysis, average rent will increase more slowly over the next 24 months, by 2% annually, to $2,306 per month by October 2025, with a marginally lower vacancy rate of 4.5%.
A housing crisis is looming over Los Angeles County and the state has lost many residents amid this affordable housing crisis.
The annual forecast from the University of Southern California’s real estate school also predicted an increase in the San Diego County rents. This increase as per the forecast will be the slowest in Southern California.
Related: Permit Approval Drops Midst of Housing Crisis in LA
