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
Ultimately 558 listings in an LA area is a pretty small number of listings considering how large the city is.
A few factors can go in to this.
1) The listings are being taken. You’re just seeing the turnover. Ie apartments are getting rented but then new ones become available. Prices won’t drop in that situation because ultimately people are still taking the rates listed. There will always be some % in turnover.
2) Prices can be “sticky” Ie landlords are reluctant to lower rent even if it means losing money in the short term. They think eh someone will rent it in just another few weeks.
Eventually yes the market catches up, but it can be slow to do so.
Latest Answers