Multifamily Forecast:

2010 USC Casden Multifamily Forecast

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The annual Casden Multifamily Forecast Report assesses conditions for multifamily product types. The analysis generates forecasts of annual apartment rents and vacancy levels for Los Angeles County, Orange County, the Inland Empire, and San Diego County. The report also offers insights as to which submarkets within these areas are likely to outperform in the near future. The market data was supplied by M/PF YieldStar. The following summarizes key findings:

Los Angeles County

  • 2010 rents to decrease an average 3.5%
  • Vacancy rates to decrease as the shadow market of homes and condos for rent is absorbed by buyers
  • Job losses in the construction, manufacturing, trade and government sectors will continue to hold down purchasing power of renters
  • Average rents are highest in trendy West LA at $2,089/month

Orange County

  • 2010 rents to fall an average 2.5%
  • Oversupply of new apartments in Anaheim and Irvine could keep a lid on rents
  • Home prices remain some of highest in the state, keeping apartment vacancy rates low
  • OC’s substantial entertainment, retail and dining amenities and skilled employment base will continue to sustain the region’s economy

Inland Empire – Riverside and San Bernardino Counties

  • 2010 rents decline 1% or less depending on submarket
  • Highest rents at $1,204/month are in markets closest to LA -- Upland, Ontario and Rancho Cucamonga
  • Lack of new construction leads to falling vacancy rates and nearly flat rental rates through the end of 2011
  • Strong shadow market of homes-for-rent disappearing as investors purchase large blocks of foreclosures; holding on until stronger housing market returns

San Diego County

  • Only SoCal market to see rent increases in 2010 – an average of  0.7%
  • Lowest vacancy levels in region thanks to high-priced homes and costly rents for shadow-market homes and condominiums
  • Rents continue to inch upwards as local economy steadily improves with more jobs tied to growth in biotech and government
  • Highest average rents are in North County Coastal communities at $1,711/month