According to an article in the Press-Enterprise, the primary newspaper of the Inland Empire in Southern California (Riverside and San Bernardino Counties) rental costs are expecting to rise modestly in 2008 for that region. The resiliency of the Inland Empire’s rental market is notable, as the region has experienced serious economic volatility; rental rates are expected to increase around 2 percent in 2008, following a similar trend in 2007.
According to the L.A. Times, the region, east of Los Angeles and North of San Diego, has experienced 50 percent growth in population since 1990 and has witnessed one of the highest foreclosure rates in the nation following the subprime mortgage crisis.
The USC Casden Multifamily Forecast Report, cited by the Press-Enterprise, which is released annually each April, predicts that existing apartment rents will increase between 2 and 2.5 percent. The average apartment for rent is expected to rise from around $1,100 to around $1,135.
The Inland Empire is an interesting microcosm of the apartment rental market. Demand for apartments is expected to increase due to economic growth as well as the influx of tenants from foreclosed houses into the apartment rental market.
On the supply side, new apartment construction as well as a “shadow market,” consisting of house and condos that have been converted to rentals by their owners, is predicted to keep up with demand for apartments.
With all these extreme factors in play, it is reassuring that apartments for rent have not fluctuated as wildly as home prices and populations. Although, those hoping that the real estate melt-down would result in cheap apartments for rent may be disappointed, it is much better for long term growth that renters will be able to find affordable apartments so that they may continue working and raising families in the region.