Econowatch

The number of vacant apartment units in the San Fernando Valley declined by 5.2 percent in August compared with the previous month, and by 30 percent compared with August 1998, as consumer demand for apartments continues to be strong. The Valley’s apartment vacancy rate was just 3.6 percent as of August, with 7,438 units available. Just a month earlier, the vacancy rate stood at 3.8 percent, with 7,850 units available, according to the Los Angeles Housing Department. In August 1998, there were 10,626 vacant units and the vacancy rate was 5.1 percent. “A couple of years ago, vacancy rates were in the double digits, but now we’re seeing some of the lowest levels we’ve seen in years,” said Scott Miller, an apartment broker with Hendricks & Partners of Encino. Miller credited the improved economy, L.A.’s growing population and the lack of new apartment units as primary factors driving down the vacancy rate and driving up rents, in some cases as much as 10 percent annually. As a result, apartment buildings are back in favor among investors. Buildings that sold for $60,000 a unit in 1994 (when the market hit its low point) are now selling for $100,000 a unit, said Miller. “There are a lot of buyers out there tripping over the same buildings,” he said. “It’s a terrific time to be a seller.” While some investors are experiencing price shock, prices for apartment buildings continue to rise, punishing those who try to wait out the market, Miller said. “People will start seeing the opportunities disappear if they’re too busy watching prices and crunching numbers,” he said.