SoCal Owners See Rent Slowdown

LOS ANGELES-Despite the downturn in the local single-family market–or, perhaps, thanks to it–building owners throughout Southern California can expect to see rental rates tick up modestly this year. The average increase, reports the University of Southern California Lusk Center for Real Estate’s Casden Real Estate Economics Forecast, will range from 2.5% to 3%. Meanwhile, occupancies will remain stable at 96% to 97%.

“As long as job losses aren’t too severe, the Southern California apartment market is poised to weather the housing downturn and credit crunch,” says Delores Conway, director of the Casden forecast, which provides analyses of multifamily transactions, new building permits, leasing activity and employment data for Los Angeles, Orange, Riverside and San Bernardino counties. “Renting remains attractive when mortgages are harder to obtain for high-priced homes. Although the national economy is skating close to a recession, the apartment market is supported by demand for trade, regional economic strength and higher paying jobs in healthcare and professional services.”

Although employment is down now, Conway anticipates job growth to pick up later this year, particularly in healthcare, business and professional services sectors as well as international trade, which bodes well for the region’s multifamily sector. However if the economy stumbles and falls into a severe or prolonged recession, she adds the “generally stable” outlook would certainly change.