Some of Orange County's biggest apartment complexes' rent is looking to drop 3.1% this year. The last drop came in 2001 after the terrorist attacks of 9/11 when they dropped 2.7% as predicted by Axiometrics Inc. Although rents from the second quarter of 2007 are up 1.5% from the year before, rents have drop the last 2 quarters sequentially at 0.7% and 0.8%.
"You'd really need a big turnaround in the third quarter for it not to go down for the year," says Jay Denton at the Dallas-based apartment analytics firm. Denton believes that a quick turnaround in rent growth is unlikely as a result of Orange County losing jobs. 19,700 jobs over 12 months have been lost as of May.
Axiometrics predicts the vacancy rate of the second quarter to be 5.9%, 6% by the end of the year. Denton says, "but that puts us in interesting territory," rising vacancies will put pressure on large apartment complex rents. Orange County has hit a new high for total vacancies in the 12 that Axiometrics Inc. has been collecting data.
The study surveyed 248 complexes that average 281 units. The final numbers for the second quarter are expected in mid-July.
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