It’s official: Apartments are the new California dream. At least for now.
The Department of Finance’s Demographic Research Unitreports that multi-family construction outstripped single-family constructionover the past two years – not by much, but it did happen.
Between 2011 and 2013, statewide about 40,000 multi-family housing units were constructed, compared to 39,000 single-family units. And of the single-family units, 3,000 were townhomes.
Although this makes a good headline, it shouldn’t be very surprising. There’s been a general trend toward multifamily construction in California since the 1990s – it was temporarily reversed during the housing boom of 2000-2006 – and in the last couple of years rental apartments have been virtually the only housing product for which California developers can obtain financing. And the overall numbers are very low compared to the boom, when 200,000+ housing units were being constructed per year.
The breakdown by county, showed in the chart below, shows that there is still a big difference between coastal and inland counties – but there’s now a big difference between working-class inland counties and more affluent inland counties. For example, while Riverside County contructed only 18% apartments, the figure for neighboring San Bernardino was 35%. Placer County in suburban Sacramento had only 11% apartment construction, but the figure for Fresno was almost half and for Kern was 30%.
The numbers in the coastal counties were off the charts – 87% in L.A; around 75% in Santa Clara, San Mateo, and Ventura; more than half in San Diego and Orange counties.
These numbers will change as the housing market comes back. The inland counties are sitting on an enormous supply of entitled single-family lots, and as the market comes back those houses will be built. But the idea that the California dream includes multi-family housing – especially in the coastal areas – is now too deeply embedded to be denied.
For more, click here.
LA County Rents Expected to Hit Average of $1,705 This Year
A new report predicts that LA County will see average rents jump 4.5 percent this year, a record increase and more than double last year’s. The brokerage firm Marcus & Millichap blames low inventory and a rebounding job market for sending the average monthly rent in professionally-managed buildings up to $1,705. All those selfish people finding jobs and ruining it for the rest of us! The rent hike would be even higher, says the report, if not for the 6,000 rental units expected to be completed across the county this year, meaning there should be a bigger increase in units than there is in new renters. It’s no shocker that the areas with the highest vacancy rates are the Santa Clarita and Antelope Valleys, but seeing South LA and Mar Vista/Palms on the list of tightest rental markets in the county may raise a few eyebrows. They’re joined by Hollywood, Brentwood/Westwood/Beverly Hills, and the South Bay as the areas with vacancy rates below 3 percent.
For more, click here.
Senior Director, Coldwell Banker New Homes Division
With over 200 condominium, townhome and loft projects successfully marketed
“Fewer properties for sale with such remarkably low interest rates make it a great time to sell but a more difficult time to buy”