Positive outlook for L.A.’s residential market

The real estate industry saw a boom in the multi-family sector, with an abundance of new developments entering the market and old properties restored, all signs of a much-anticipated economic rebound. At a macroeconomic level, apartments and their residents generated a $1.1 trillion contribution to the national economy in 2011 and supported 25.4 million jobs.

“Even in one of the worst economic climates we’ve ever seen, the multifamily industry and its 35 million residents contributed more than $1 trillion to the economy,” said NMHC Chairman Thomas S. Bozzuto , CEO, The Bozzuto Group. “With up to seven million new renter households forming this decade—almost half of all new households—the dollars and jobs we add to the economy will only grow in magnitude.”

According to a recent report released by the National Multi Housing Council (NMHC) and the National Apartment Association (NAA), apartment construction and operations in the Los Angeles metro area contributed $14.7 billion to the local economy supporting 107,000 local jobs in 2011. The data point to a recovering housing market gratifying for people who develop, finance or broker sales of residential property, which eventually translates into a flourishing business sector benefitting the entire area and its residents.

“The apartment industry provides not only homes, but also provides thousands of local jobs and hires thousands of small businesses that drive the Los Angeles-Long Beach-Orange County economy,” said James B. Clarke , CEO of the Apartment Association of Greater Los Angeles. “Apartment operations hire not only property managers and related personnel, such as maintenance technicians, but also numerous suppliers including pest control, landscaping, painters, laundry, staffing companies and online marketing services, to name a few. This eye-opening report shows just how important rental units and residents are to the local, California and national economy.”

Demand for apartment living has increased a great deal in recent times, with a constant flow of new people taking the plunge into renting either by choice or disillusioned with a mortgage-haunted homeownership dream. The renters by choice are generally socially active, dynamic people who want flexibility for job mobility and manifest a preference for laidback lifestyles. Therefore, buying is not their first choice.

New apartment construction activity has gained momentum, particularly in the Westside Cities area, bringing the local market’s apartment supply more in balance with demand. Catering to a broad demographic group and varied standards of living, the multi-housing sector provides a viable alternative to homeownership, with rental homes conveniently located in urban cores, near jobs and schools and entertainment destinations.

Highlights from the The Trillion Dollar Apartment Industry report include:

–          The California apartment construction industry supported 45,000 CA jobs and contributed $6.7 billion to the CA economy in 2011.

–          The California apartment operations industry supported 300,000 jobs, spent $11.1 billion operating California’s 2.8 million apartment homes and generated a total local economic contribution of $24.6 billion.

–          California’s 6.2 million apartment residents supported 4.1 million jobs, spent $76.0 billion on goods and services within CA and generated a total economic impact of $159.6 billion in CA.