OC Apartment Rents Down 2.9% From a Year Ago

NEWPORT BEACH, CA-The average apartment rent at large complexes in Orange County fell 1.7 % in Q1 compared to Q4 and 2.9% in Q1 compared to the same period a year ago, according to the most recent data from RealFacts, an apartment research firm in Novato, CA. The figures generally agree with a 2% annual decline reported by the Casden Multifamily Forecast of the University of Southern California’s Lusk Center for Real Estate in Los Angeles and 0.95% quarterly decline given by Pierce-Eislen, an apartment research firm in Scottsdale, AZ.

According to Real Facts, the $28 quarterly decrease to $1,550 a month was only the third such drop for the market in 14 years. The other declines occurred in Q1 1995 and Q4 ’08. Casden, which bases its results on a broader sampling, says this quarter’s decline is the first in 13 years. RealFacts surveys only apartment complexes with at least 90 units, while Casden includes smaller properties as well. Pierce-Eislen looks at all complexes with more than 50 units.

All three sources attribute the decline in rent to rising vacancy levels caused by rising unemployment levels. “There’s a near one to one relationship between job loss and rent decline,” observes Pierce-Eislen CEO Ron Brock Sr. What’s most notable about the slippage, he adds, is that the biggest rent declines have been occurring at the top end of the market. “It’s the class A and A-plus properties that have been affected the most,” he notes.