According to the LATimes, low vacancy rates and ever-increasing home prices are pushing the price of rents higher. Overall, rents increased on average 5.5% compared to the same time as last year in Southern California. The average monthly rent rose to $1,419 in both Los Angeles and Orange Counties. With strong job creation, the Southland is attracting many new residents, but most of those residents cannot afford to purchase a home, thus occupancy rates of rental units continue to hover above 95%.

While many have pointed to Southern California as a leading bubble market, rising rental prices and low occupancy rates do strengthen home prices. If job creation continues to grow, it is hard to imagine any significant drop in home prices. While double digit rates of appreciation in home values are probably a trend that cannot continue, massive depreciation doesn't appear possible either - at least in the near term.