With rents forecast to rise 3 to 5 percent across Southern California this year, the Inland Empire's relatively inexpensive apartments are expected to draw workers from throughout the region, according to a report released today. A record 5,400 new units were completed in the Inland Empire in 2006, and that helped keep rents in check -- the average increase was 2.6 percent, according to the Casden Real Estate Economics Forecast from USC's Lusk Center for Real Estate. Most of the new construction was in Moreno Valley and Rancho Cucamonga, according to the study. Rents are expected to average $1,036 in 2007 across the Inland Empire, according to USC's Lusk Center. San Bernardino was found to be the most affordable area, with rents averaging $835, according to the report. In Los Angeles County, the average rent is expected to reach $1,470. Demand for apartments is up, due in part to stricter mortgage lending practices in the so-called subprime market, according to Delores Conway of the Casden Forecast. "Stricter lending standards following the subprime mortgage meltdown are causing many potential homebuyers, who now face a larger down payment and higher monthly payments, to find renting more affordable," she said. The market for apartment buildings is expected to remain strong. "Strong investor interest and favorable long-term interest rates should help sustain sales activity of apartment buildings in all markets even as more units are being built," Conway said.
April 5, 2007