The OC Register had a post yesterday saying that Orange County apartment rents are projected to rise this year based on data from Marcus & Millichap.
Orange County apartment rents are projected to continue rising this year while the number of empty units will continue to fall, making the county the fifth-best apartment market for landlords in the nation in 2012, a market forecast concluded.
It’s the second year in a row that the Marcus & Millichap National Apartment Index ranked O.C. No. 5 out of 44 U.S. metro areas. The county’s apartment market also ranked third best out of seven California metros.
If the report is accurate, renters need to brace for an average increase of 4% in asking rents. And apartments will be harder to find, with just 3.9% of units expected to be empty by year’s end, the report said.
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How did they do last year? Marcus & Millichap projected that O.C. asking rents would go up 3.7% to $1,535 per month in 2011. In fact, the average asking rent rose 2.7% to $1,515.
The brokerage was more accurate in its 2011 vacancy projection: It predicted that vacancies would fall to 4.4%, compared to an actual drop to 4.3%.
What do you think will happen to OC rents this year? What about Irvine rents? Anyone in the process of renewing a lease?
*Sigh* My 12 month lease in Irvine runs out in late May. Since I moved-in spring of 2010, I have a “good” deal…. I fully expect my renewal price to be bumped up 8%-9% as my complex tries to get me closer to the current asking prices.
… Anyone have a spare down payment I can use? :-S
I’m in the process of moving apartments this week. My current 1-bed, 770 sf. apartment lease runs out next month, and we were paying well “under market” for the place, at $1,440/mo. They attempted to raise us to $1,500 per month, or a 4.2% increase. With a growing family, we used the opportunity in losing our great 1-bed deal to move and upgrade to a 2-bed unit in another complex nearby. There, we are paying $1.92/sf for our monthly rent. Actually cheaper than what we would be paying if we stayed at my current 1-bed, which would be $1.95. And they are now attempting to ask a new tenant for $1,705/mo for the unit I’m vacating! Whoa!
A 2 bed apt should have lower $/sf than a 1 bed, all else being equal. Upgrade to a 3 bed and you’ll get an even lower $/sf. You should really be comparing to other comparably sized units to know whether you’re getting the best deal.
I just renewed my IAC rental in Irvine. The IAC increase was 6% over last years rent. The current stats show Irvine with an overall rental increase (feb 2012) at 4.5%. I took those facts along and was able to get my rental increase down to 4.7%. Not much but in this current climate I was pleased to have gotten that. If you are already an IAC renter, remember that it costs them to repaint, clean/replace carpet etc etc if you move out so it’s in their interest to keep a good tenant.
It definitly makes sense to own over renting right now, but goodluck finding any available inventory to buy right now..
Over on the forums over the past years (both IHB and TI), I’ve always read about TIC raising rents, not decreasing them… even during the bubble deflation.
Has any TIC renter paid less on a lease renewal?
My TIC rental was reduced by 15-20% a couple years ago, and TIC also saw price eroding from their new properties. To boot his selling price of new development as high as possible, Bren gave words out to his brethren to start to increase the rentals at all cost. The strict guidelines of only 1 adult in a one-bedroom and 2 adults in a two-bedroom units are relaxed and turned to a blind eye. There is always a demand for several UCI students to cramp into an apartment unit. Thus, it appears that the rental costs are on the increase. You will notice your apartment complex is overcrowded with more cars. They are playing games to jack up rentals.
I just read over on IR’s new site that TIC is sending emails to all the re-litters in OC offering a $600 fee for any renters that they bring in.
How many vacancies do you think that TIC has if they are offering rewards?
How long can they raise rents?
That’s something I don’t understand. How is TIC building so many new apartments if their current stock has vacancies?
They just expanded the Village at the Spectrum, are building out Cypress Village and started on the apartments over where Wild Rivers used to be.
Where are these renters coming from? And why rent in Irvine at the prices they charge?
TIC has a monopoly on centrally located new-ish apts.
The nicer ones down in AV or Ladera are too distant. Nothing much built in NPB recently, other than the TIC stuff similarly priced.
Nicer ones up by the stadia are too distant and undesirable locale.
Any other new inventory?