Florentina Sarac

Southern California new apartment construction is slowing. This year, the market will add 14,160 new units, a 16% decrease over new apartment deliveries in 2018, according to a report from Yardi's Rent Café. Los Angeles and San Diego are the most active markets for new construction, contributing more than 6,500 units in total this year, but these markets are both seeing substantial decreases in deliveries compared to last year, with Los Angeles completions down 23% and San Diego down 29%.

"Both Los Angeles and San Diego are markets that keep witnessing a strong economic growth, which is encouraging more and more people to move there while at the same time putting some pressure on rental prices," Florentina Sarac, a research analyst at Yardi's Rent Café, tells GlobeSt.com. "As long as there's demand, developers will be interested in bringing more units on the market."

The slow down in new construction activity will likely fuel rent growth by keeping supply in check. "Compared to last year, Southern California is following the national trend of lower units delivered; however, despite increasing multifamily demand for both the renter-by-choice and renter-by-necessity segments, supply does not seem to keep up," says Sarac. "Prompted by steady household creation and high-paying jobs in the area, residents are more interested in the multifamily sector of the market as single-family homes continue to be unaffordable for most earners."