Inland Empire Apartment Occupancy Ranks Among Tightest Markets Nationally
(March 21, 2001) — The Inland Empire joined the top ten tightest apartment markets in the nation as 2000 drew to a close, according to the latest edition of M/PF Research’s Inland Empire Apartment Report.Among the 57 apartment markets that M/PF Research tracks quarterly, the Inland Empire’s occupancy ranked ninth highest nationally.
In keeping the metro’s recent upward trend, apartment occupancy in the Inland Empire reached 97.9 percent at the end of 2000. Overall, Inland Empire occupancy climbed 1 point during the past year. The metro area joins Los Angeles, Orange County and San Diego with occupancy rates between 97 and 99 percent.Now at the highest levels seen in many years, occupancy rates across Southern California rank among the tightest nationwide.
M/PF Research editorial director, Greg Willett attributes the Inland Empire’s decade-high occupancy level to the area’s modest volume of new supply. According to Willett, “With only five communities totaling 1,112 apartments completed during calendar 2000, the high occupancy level seen in the Riverside/San Bernardino area in large part reflects the metro’s limited construction pace. Demand has easily kept pace with the few additions to the existing stock.”
Apartment absorption in the Inland Empire totaled 2,490 units during calendar 2000. This modest demand corresponded to limited apartment availability, according to the M/PF Research study.
“With the existing apartment base already essentially full and so little new supply added to the stock, comparatively few apartments were available to be absorbed. Looking at the larger picture, however, single-family homes routinely capture most of the housing demand in the Inland Empire, with the metro serving as the affordable for-sale choice in the Southern California region,” Willett said.
One effect of tightening apartment market conditions has been notable rent growth. Measured on a same-store basis, Inland Empire rents grew 7 percent during the past year, well surpassing the general pace of consumer price inflation recorded across Southern California. Still, metro area rent growth did not keep up with the impressive price jumps seen in other parts of Southern California. Annual same-store rent growth reached 11 to 14 percent in neighboring Los Angeles, Orange County and San Diego.
Monthly rents in the Inland Empire now average $748. At the top end of the price spectrum, properties built in the past decade command monthly rates of roughly $900 to $950 in the Foothill area and across neighborhoods in the Riverside/Corona/Moreno Valley submarket.
In the near term, modest apartment product availability levels will continue to shape performance trends in the Inland Empire.As of January 2001, just 1,102 apartments were on deck in properties under construction.
|Inland Empire Apartment Market Profile
4th Quarter 2000
|Annual Employment Growth||45,200 jobs|
|Annual Apartment Completions||1,112 units|
|Annual Apartment Demand||2,490 units|
Change in Past Year
|Average Quoted Rent
Change in Same-Store Rents
|$748 per month
M/PF’sInland Empire Apartment Report is a quarterly report that includes data and analysis addressing the local economy and trends in apartment demand, supply, occupancy and rents. Information is summarized on the metro level and detailed for six submarkets.
Since 1961, M/PF Research has been the trusted national expert in apartment market research. M/PF is retained by investors, developers, owners and lenders to prepare project-specific market studies and to produce broader, strategic market selection analyses and reports. M/PF Research, located in Carrollton, Texas, is a wholly owned subsidiary of RealPage, Inc., a leading provider of property management software and web services.