Is There Too Much Apartment Construction?
Posted by Techyscouts | Posted on 06/30/2015
Is There Too Much Apartment Construction in LA?
At this point, we’re all familiar with the sight of cranes supplementing the LA skyline. These towering monoliths that dot the horizon on our commute down the 405 seem to pop up like they’re part of some giant game of whack-a-mole – and all those construction projects mean new apartment complexes are being built in LA. But is it happening too much? Will all the new apartments create a surplus of supply and hurt the real estate market like we saw in the 2000s? At Mike Millea Probate Real Estate, we’re committed to keeping our audience well informed on current and future trends, so for this blog, we want to discuss whether or not all the recent apartment construction in LA is a good or a bad thing.
LA Apartments – Room for More
While some may be concerned by all the new construction for other reasons, there’s no need to worry about it from a market-based perspective. Multi-family apartment complex permits are higher than they have been in recent years, but they’re not even close to levels seen in the 2000s or the mid 1980s, the true peak of supply. The new units are largely an indicator of a growing, healthy real estate market. And the absorption rate (the amount of new units that get rented out and lived in) is strong and doesn’t show signs of faltering. So while all of us may fear the traffic and congestion that new apartments and new residents can bring, we don’t need to worry about the new supply affecting the market in any negative way.
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Have any other questions about commercial or probate real estate in Los Angeles? We’re here to help. Feel free to reach out to us at our contact page to talk about your next project, and don’t forget to check back to this blog for more tips and info on all things real estate.