The average renter saw a $78 increase in monthly rents in the past 12 months By Jack Katzane
By Jack Katzanek
A scarcity of vacant apartments not seen since before the Great Recessionhas pushed the average monthly rent in the Inland Empire up 5.1% in the last year to an average $1,532, a report released last week says.
At the end of the second quarter, the vacancy rate for apartments in the two-county area had tightened to 3.3%, according to research by Marcus & Millichap, a commercial real estate firm. In 2009, when high unemployment during the peak of the recession discouraged people from seeking apartments, vacancies were close to 7%.
The region had not seen vacancy rates below 4% since the first quarter of 2007, when the subprime mortgage crisis began to take hold, according to the Lusk Center for Real Estate at USC. The rate hovered below 4% from 2002 through 2006.
The average renter saw a $78 increase in monthly rents in the past 12 months. The tight supply of apartments is expected to push the average rent up to $1,560 per month by the end of the year, the report says.
Average rents in western San Bernardino County cities such as Rancho Cucamonga, Ontario and Chino were just above $1,800 and $1,700 in southwest Riverside County.
Migration of prospective tenants from the coastal counties will continue to entice developers of rental units in most of those submarkets. “The growing demand for rentals near employment cores and commuter infrastructure will drive the average rents in these areas higher,” the report states.
The high cost of housing has prompted legislators and some cities to consider or enact rent control measures to curb the escalating rents across California.
While the state’s housing shortage is not discussed as often in Inland areas as it is on the coast, Marcus & Millichap did suggest the region suffers from a long-term lack of new units. Over the course of the current economic cycle, the inventory of Inland apartments has increased by 6%, about half of the national average, the report states.
Several major projects that will be completed later this year or early in 2020 could help ease the shortage.
The report cites the final phase of Paseos at Ontario, an 800-unit project located just north of Ontario International Airport. The second-largest planned development for 2019 is the 230-unit Mitchell Place in Murietta.
Next year, two major projects are scheduled for completion in Redlands. Summit and Crossings at Redlands, with more than 620 units between them, are expected to be completed in the first quarter.
In Riverside, the average rent was $1,563. Rents are below average in Moreno Valley ($1,506), Hemet-Perris-Lake Elsinore ($1,380), Fontana-Colton-Rialto ($1,270), the Coachella Valley ($1,206) and San Bernardino ($1,200).
The Coachella Valley was the tightest market, with a vacancy rate at just 1.9%. Other areas with few empty apartments were Fontana-Colton-Rialto (2.3%), San Bernardino (2.8%), Hemet-Perris-Lake Elsinore (2.9%) and Riverside (3%). Cities above the average included Moreno Valley (4%), Rancho Cucamonga-Upland and Temecula-Murietta (both 3.8%) and Ontario-Chino (3.6%).
Leasing agents at two area apartment complexes say the demand for vacant units is steady.
Melissa Chavez, a leasing consultant for Creekside Village, an apartment complex in San Bernardino, says most units don’t stay vacant long, three or four weeks at the outside.
It was a busy summer at Waterstone at Murietta, although it has leveled off in recent weeks because families with children tend to settle in before schools reopen, leasing consultant Jackie Mendoza said. The complex is 95.7% occupied and 98% leased.
“We’ve still got a good turnaround,” Mendoza said.
The original article can be found here.