We’ve been so focused on the housing purchase market over the last couple of years that we seem to have forgotten the rental market. Some markets are holding their own but some are taking a huge hit due to the failed economy and glut of foreclosures on the market.
In L.A. County, rents were off nearly 4% in 2008 and there doesn’t seem to be any light at the end of the tunnel as unemployment continues to hurt demand and new construction inflates supply.
In some areas including Hollywood and downtown LA, landlords are seeing stiff competition from new condominium projects that are being leased rather than sold. There are also situations across all areas of Southern California where friends and family are sharing in the purchase of foreclosed condominium units because monthly costs can be very close to that of rent.
Even areas like Orange County that usually hold up better than most when it comes to rentals saw a 2% decrease in 2008. And that number may decrease a little more as the economy continues to struggle, but not much. Above average home prices in a desirable location coupled with tight credit should keep most apartment complexes near capacity.
thats the trend