One of our sources is RealFacts. The research firm specializes in data on multifamily housing, and they send out a regular newsletter. Today's includes the following interesting comments made by its president, Sarah Bridge, at the California Real Estate Journal's roundtable discussion last month:
Q What will happen to rents in 2006?A In the four-year trend, Southern California has had 18.5% growth as opposed to Northern California, which is at a negative 12.5%. ... The difference in the markets outside of LA is that in the mid-90s their rents were already too high, and they've had to offer enormous concessions to complete with new construction coming on at a rapid pace. So really, those markets don't have an opportunity to have an increase in asking rents. They're working on improving their economic rental picture.
Q What about sales of apartment complexes in 2006?
A The Bay Area has been in a coma for the past five years. There are no transactions to speak of. The occasional deal squeaks through, but it's been flatlining on the transactions side.
The activity has primarily been in Southern California. But when the price and value on income got too high in '04, there was an exodus of investors in search of income-property alternatives.
So that's good news for renters: you're not staring at the prospect of a hot, hot rental market. Of course, if you own property you were hoping to rent out -- or you were hoping to sell your money-losing rental units -- this isn't good news at all.
Reproduction of "Landlord" by Alameda-based artist John Sheridan.
By SFist Lisa, Contributing