Lenders take wait-and-see stance on foreclosures
To buy a home in 2009, forget what you heard five years ago: Anyone can buy. You can't lose, no matter what you buy. Values always go up. Loans are easy to get, and you can always refinance. Instead, we're back to the old rules when it comes to finances, when ownership means getting a place to live in, not signing onto an investment that is a ready piggy bank for buying new cars, big TVs and trips to Bermuda. » More
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County's rental market `loosening up a little'
By Emmet Pierce
Union-Tribune Staff Writer
A fourth-quarter survey of apartment complexes shows rental occupancies
down slightly in San Diego County as the deepening recession continues to
place economic pressure on renters and landlords alike.
"What we are seeing in San Diego is apartments are loosening up a little,"
said Delores Conway, director for the Casden Real Estate Economics
Forecast at the USC Lusk Center for Real Estate. "Now we have more
vacancies, but it still is considered a tight market. Rents have been
stable."
Other rental markets in Southern California are faring much worse as
unemployed tenants move away or double up with friends to save money,
Conway said yesterday.
The occupancy rate here dropped from 97.5 percent a year ago to 94.9
percent, Conway said. The survey found that rental rates within the county
rose 1.9 percent year over year to an average rent of $1,340.
Conway predicted that rents would rise by about 1 percent over the next
two years. Despite heavy layoffs in the county's construction industry,
some elements of the local economy are holding up.
"You have the military bases there, and lot of the military are renters,"
she said. "Also, there are quite a few educational institutions and many
of these people are renters. Some industries are actually doing well:
biotechnology, health care and telecommunications."
Some people have left the rental market to take advantage of the downward
pressure on home prices created by the spike in foreclosures. Alan Nevin,
director of economic research at MarketPointe Realty Advisors in San
Diego, said he was surprised that the Casden survey showed an increase in
rental rates for the San Diego region. Like Conway, he said many
households are doubling up to save money.
"With the market as soft as it is, landlords are giving concessions,"
Nevin said.
Challenges facing landlords are rising unemployment among tenants, the
increased availability of foreclosure homes at reduced prices and
households that double up to share expenses, Nevin said.
Conway predicted that the San Diego County market would outperform other
regions in Southern California when the recession ends. Although there is
a "shadow rental market" created by an abundance of condos in downtown San
Diego, those units tend to be priced higher than most apartments. Because
of that, they haven't had a major impact on rental or occupancy rates, she
said.
During the fourth quarter, the average one-bedroom rental unit in San
Diego County cost $1,162 per month, Conway reported. The average
two-bedroom unit went for $1,420 and three-bedroom units rented for
$1,740. There was a new supply of 1,429 units in all of 2008, compared
with 1,511 that are forecast for 2009.
Elsewhere in Southern California, Los Angeles County saw fourth-quarter
rent down an average of 3.8 percent from the same period last year, the
forecast found. Orange County rents dropped for the first time in 13
years, by an average of 2 percent. In Riverside and San Bernardino
counties, rents fell 4 percent and occupancies took their biggest drop in
a decade, falling to 91.2 percent from 95.3 percent.
The survey marked the first time that the six-year-old apartment forecast
has included San Diego County. Working with M/PF YieldStar, Casden
conducted a telephone survey of professionally managed apartment complexes
throughout Southern California. The study represented approximately 30
percent of the San Diego region's apartment complexes, Conway said.
Emmet Pierce: (619) 293-1372; emmet.pierce@uniontrib.com
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