…Meanwhile…The rental properties are gonna increase to keep up with demand….
Yup…that explains a lot why there is a sudden rush for developers to create rental property complexes….
Me thinks it’s gonna be good times for landlords in the next few years… (with the exception of the “tax” issues)
Bay Area is going even more nuts…..Tenant lease expires next month. They’ve agreed to a $400/month increase…$3100/month for 2000 sqft, which apparently is still below market price for comparable… I wonder how much more rent would be in places like Cupertino…..
San Diego County is poised to add an average of 2,000 new rental units a year until 2016 to meet growing apartment demand. That rate marks an increase from previous years but is far below what other major cities are adding to their inventories, said an executive at commercial real estate company Jones Lang LaSalle in San Diego.
“It’s been a supply-constrained market for several years,” said Executive Vice President Darcy Miramontes, referring to local numbers.
The demand for apartments in the nation has increased following the housing crisis, which brought on a flood of foreclosures and delinquencies. The surge in rental demand also is influenced by Echo Boomers, also known as Gen Y, who are expected to form the bulk of the five to six million new rental households in the next 10 years, based on a March report from the Bipartisan Policy Center.
Over the last decade, developers have delivered an average of 872 rentals a year to the San Diego market, so the expected 2,000 average is much more encouraging to see, Miramontes said.
For perspective, that 2,000 figure represents about 1 percent of the county’s total rental stock, Miramontes said. Also, other major metro areas are able to add an average of 10,000 to 12,000 units a year, far higher than we’re expecting in the next four years.
“We haven’t seen that kind of growth in 20 years,” said Miramontes, referring to the rental growth seen in other metros.
