Searching for apartments in the LA area – there are 558 listings on zillow in westside LA under 2k$. Many are within blocks of each other, lots are units in the same building. With so much inventory, shouldn’t market forces cause some landlord to lower the rent? Does the economic theory of supply and demand not apply for the housing market?
In: Economics
LA’s c[urrent vacancy rate for housing is 4.9%](https://www.costar.com/article/1677684742/los-angeles-apartment-vacancy-flatlines-in-late-2023), which is on the low side. It’s generally considered that 5-8% is the sweet spot for vacancy rates, so as many people as possible are housed, but so that there’s enough slack in the market that people are still able to move.
5% of the total housing stock in LA (1.4 million units) is 70,000. That might sound like a huge number of empty apartments, but in a city the size of LA, it’s really not all. Thousands, perhaps tens of thousands of other people – both in LA and outside – are competing for the same 558 listings you found on Zillow. This is the seemingly paradoxical current state of most larger cities in America – facing high rents fueled by a substantial housing shortage while tens of thousands of units are on the market.
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