O.C. rent growth slows, but no big concessions yet

O.C. residential rent increases have slowed dramatically, but not enough to give tenants much negotiating room for give-backs, says the latest market analysis by Dallas-based Axiometrics Inc.

The average fourth quarter rent was $1,670 at the 199 major O.C. apartment complexes surveyed by Axiometrics. That was a 3 percent increase over fourth quarter 2006. But last year, rents were growing at a 5 percent pace and in 2005, they jumped 8.9 percent. This quarter’s average rent includes a mere $23 in concessions. That’s up from the low of $16 in 2005’s really-tight rental market, but is only 1.3 percent of the asking rent. It’s a far cry from the one-month-rent-free days, which is equivalent to an 8 percent concession.

Part of the reason for the slowing rent growth is lower occupancy rates. The average occupancy was 95.3 percent, down 1.1 percent from the fourth quarter 2006.

Axiometrics’ Jay Denton pointed to job growth as a major factor in slowing rent increases. O.C. job growth is flat. Chapman University is predicting job growth will be negative next year with a loss of 2,400 jobs, which will put further pressure on rents.

source: ocregister.com