...The state of the housing market hasn't made matters any better. Home prices have fallen across all of California's major cities, with prices in markets including Bakersfield, Fresno, Riverside, Sacramento and San Bernardino getting hit hard and prices in coastal markets holding up better, noted Delores Conway, director for the University of Southern California Casden Economic Forecast. While the number of home sales is down, the Central Valley areas are seeing investment funds purchase foreclosures and rent them out, she added.
The multi-family sector in California, however, is still relatively healthy, as rents have remained fairly flat and vacancies have risen only slightly, according to Conway. She added that California still has a housing shortage except in the Inland Empire, where there's a huge shadow market of additional apartment supply in the form of leased condominiums and leased homes.
"What is of particular concern in the housing market in California is that unemployment has sharply risen," she said, slotting the unemployment rate in Los Angeles at 8.2 percent, in Riverside at 9.7 percent and in Orange County at 8.5 percent. Office vacancies are also on the rise, while "a lot of deals are not getting done," she said...
October 17, 2008