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Lansner on Real Estate ~ The latest news about the housing market from Orange County Register columnist Jon Lansner.

Archive for the 'Apartments/Rents' Category

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Police raid Surf City rental service

November 20th, 2009, 9:00 am by Jeff Collins

Huntington Beach police are conducting a felony investigation of Golden State Rentals, a troubled rental listing service that’s accused to giving out bogus listings and failing to refund customers’ money.

Investigators served a search warrant on Golden State Rentals in early October after an undercover officer posed as a customer to gather intelligence about the business, according to a search warrant return filed in West Orange County Superior Court.

On Oct. 2, officers found Golden State’s Beach Boulevard office abandoned. Police seized customer files left behind, the court document said. The firm apparently shut down in late September.

The Register reported last June that numerous Golden State customers had complained that the company charged them $195 for weekly listings of homes for rent. If they failed to find a home through the service, they’d get their money back, customers said they were told. Instead they got listings for already rented units, listings outside the areas they wanted to move to or listings outside their price range. When they tried to get refunds, they were put on hold for up to an hour or hung up on.

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Posted in: Apartments/Rents • Legal issues • | 26 Comments »

SoCal rent costs fall, 1st dip in 14 years

November 19th, 2009, 7:10 am by Jon Lansner

Renting costs in Southern California fell at an annual rate for the first time in 14 years, according to the freshest Bureau of Labor Statistics’ Consumer Price Index.

Local renters’ costs fell 0.1% last month vs. October 2008. Last such SoCal decline? A similar size drop in November 1995.

Renters weren’t the only housing winners in the CPI report:

  • Homeowners equivalent inflation rate (purchase costs not included), fell at an 0.7% annual rate in October. That’s biggest SoCal drop since June 1995.
  • Household energy costs in SoCal fell at an 0.7% annual rate in October.Actually, that’s the smallest drop in a string of declines that dates to last November.
  • Household furnishings and operations fell at an 2.5% annual rate in October. That’s biggest SoCal drop since April 2008.
  • Overall, SoCal housing inflation fell at an 0.6% annual rate in October — fourth consecutive drop and biggest since June 1983.
  • As for the big picture, SoCal total inflation rate for all goods and services fell at an 0.4% annual rate in October. It’s the eighth consecutive drop — but that smallest in that string.

Rental trends:

Posted in: Apartments/Rents • Housing inflation • • • | 20 Comments »

Really? Flat-screen TV for apartment renewal

November 13th, 2009, 6:00 pm by Jon Lansner

really

Real estate news and views from around the globe that make you go, “Really?”

  • FREEBIES: Landlords showering flat-screen TVs, cash, rent cuts to get tenants to renew apartment leases (WSJ.com) MORE HERE!
  • NO LETUP: U.S. apartments head for record high vacancies (Bloomberg.com) MORE HERE!
  • ROTTEN APPLE: Manhattan rents fall as much as 9% amid employment cuts (Bloomberg.com) MORE HERE!
  • CHEESY: More units, less jobs will sink Milwaukee apartment market (Business Journal of Milwaukee) MORE HERE!
  • ROCKY: Grand Junction, Colo., apartment vacancy rates rise (GJFreePress.com) MORE HERE!

Check HERE for our coverage of apartments and rents in Orange County!

Posted in: Apartments/Rents • | 4 Comments »

How builders share profits with Irvine Co.

November 10th, 2009, 12:10 pm by Jeff Collins

woodburye-ivy-onsetEver wonder how developer Irvine Co. makes it money?

William Lyon Homes officials said last week that its Ivy development on Irvine Co. land in Irvine has been so successful that they’ve raised the price by $10,000 and discontinued all discounts except for a financing incentive.

As of Friday, the company had sold 35 of the 58 townhomes it plans to build in the Irvine Co.’s Woodbury East subdivision, with 21 homes expected to close escrow in December.

But despite strong demand, company officials said during a conference call with financial analysts last week that the project won’t be a huge money-maker because of its profit-sharing arrangement with master developer Irvine Co.

One of the two speakers on the conference call, either company President Bill H. Lyon or interim CFO Colin Severn, said that Lyon Homes gets 100% of the first 6% of profit, but just 30% of the profits after that:

“I don’t think (Ivy’s success) had a huge impact on the numbers necessarily. The Irvine Co. deals are generally underwritten at 6%, and there’s a profit participation split with 70% going to the Irvine Co. over that. But honestly, (high sales there) helps a little bit. … Sales activity continue to be good there.”

The Ivy project, with prices starting below $400,000 per unit, was relaunched last summer after a delay caused by the housing slump.

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Posted in: Apartments/Rents • Brokers, builders, etc. • Meltdown • Top tale • • • • | 16 Comments »

Westminster led O.C. cities in rent drops

October 26th, 2009, 2:00 am by Jeff Collins

Three Orange County cities with the highest vacancy rates had the steepest rent reductions at large apartment complexes during the summer, the latest numbers from apartment tracker RealFacts show. According to RealFacts:

    City Occu. Rent Chg.
    Westminster 89.4% $1,312 -9.0%
    Mission Viejo 92.6% $1,400 -7.2%
    Irvine 91.5% $1,779 -7.1%
    Newport B. 93.6% $1,842 -7.1%
    Placentia 94.5% $1,367 -6.1%
    Santa Ana 94.2% $1,324 -5.8%
    Tustin 94.0% $1,473 -5.8%
    Huntington B. 94.9% $1,422 -5.2%
    La Habra 95.2% $1,272 -5.1%
    Stanton 94.2% $1,245 -5.1%
    Orange 94.9% $1,551 -5.0%
    Fountain Valley 94.6% $1,396 -4.6%
    Aliso Viejo 93.7% $1,644 -4.6%
    Costa Mesa 93.4% $1,579 -4.4%
    Lake Forest 95.1% $1,472 -4.4%
    Buena Park 93.8% $1,296 -3.6%
    Fullerton 92.8% $1,374 -3.4%
    Anaheim 92.9% $1,291 -3.0%
    Cypress 96.8% $1,382 -3.0%
    Laguna 95.3% $1,576 -2.4%
    RSM 92.7% $1,489 -2.2%
    Garden Grove 95.4% $1,348 -2.1%
    Brea 94.4% $1,469 3.0%
    O.C. 93.4% $1,523 -5.0%
  • Apartment owners in Westminster — which had the county’s highest percentage of empty units — made the greatest rent cuts. Rents in Westminster’s large apartment complexes dropped 9% to an average of $1,312 a month.
  • Nearly 11% of the units in Westminster’s large complexes were empty.
  • Mission Viejo and Irvine had the second- and third-biggest rent reductions.
  • Mission Viejo landlords cut summer rental rates by 7.2% to an average of $1,400 a month.
  • Apartment owners in Irvine cut rent by 7.1% to an average of $1,779 a month.
  • Irvine had the county’s second-highest vacancy rate at 8.5%. Mission Viejo had the third-highest at 7.4%.
  • Newport Beach — which tied Irvine for having the third-largest rent drop — continues to have the county’s highest apartment rents: $1,842, even though it fell 7.1% from the year before.
  • Stanton had the county’s lowest rent: $1,245. Rents there fell 5.1% from summer of 2008.
  • Rents went down last summer in 22 of the 23 cities included in RealFacts’ survey. RealFacts only includes cities with five or more complexes of 100 or more units.
  • Brea was the sole O.C. city in the survey to see rents go up. Brea’s average rent in a large apartment complex increased 3% to $1,469 a month.

Countywide, the average rent was $1,523 over the summer, down 5% from the summer of 2008. The average vacancy rate was 6.6%, RealFacts reported.

RealFacts coverage:

Posted in: Apartments/Rents • Top tale • • • | 25 Comments »

O.C. homebuying cost at 10-year best vs. renting

October 23rd, 2009, 12:00 pm by Jon Lansner
Click to enlarge

Click to enlarge

Local home price have fallen so far and so fast that they have reach a point where — using my simple math — that the buy-or-rent equation places buying at the best spot in a decade.

I loaded my trusty spreadsheet with …

  • Estimated mortgage payments from DataQuick. These number crunchers go in and estimate — based on the terms of mortgages that are public — what each borrower’s initial house payment may be.
  • What I’ll call “Actual rents” at large apartments complexes, provided by several firms — most recently Realfacts. Actual rent? It’s average rents discounted by the amount of vacant apartments, reflecting what new tenant may be able to get.

When you compare the two, as the accompanying chart shows, you see house payments running double local rents during the late 1980s housing boom. During the ensuing bust, house payments ran down to as low as 56% above rents in 1999 — just above the just-concluded third quarter’s 57%!

After, ‘99 a brewing insanity took over.  A homebuying frenzy pushed house prices skyward. Those shoppers fled apartments, forcing landlords to moderate their rent hikes. As a result, buying-to-rent ratio ratio soared to where house payments where 150% above rents. You know what came next!

Is this another bullish factor for the home-selling industry? Well …

  • Rent indexes like the one that RealFacts creates, cannot capture all the concessions landlords are offering on top of their already lowered advertised monthly rates. So an aggressive rent shopper can get a better deal — and nudge this buy-vs.-rent math back towards renting.
  • Skittish bankers are making it very difficult for all-but the overly qualified shoppers to get home loans. So the recent “affordability” — by many measures, in fact — simply an illusion for many credit-quality-challenged shoppers.
  • And how secure is your job? Employment anxiety is not the type of climate that that’s conductive to energized house shopping.

Still, when you consider that the typical monthly mortgage payment is off 30% from in 2007 peak — that’s $1,257 a month — while rents have been flat in the same period, an opportunity has have been created for certain house shoppers.

Comparing costs:

Posted in: Affordability • Apartments/Rents • Top tale • • | 88 Comments »

O.C. rents fall by $80 a month

October 21st, 2009, 12:01 am by Jon Lansner
blog-realfacts

Click to enlarge

Here’s a little stimulus created by an oversupply of apartments, from the latest quarterly report on conditions at Orange County’s larger complexes by apartment tracker RealFacts shows in the third quarter …

  • Average rents at large Orange County complexes in the past quarter were $1,523 – that’s down $80 a month (or 5%) in a year. It’s the fourth consecutive quarterly year-over-year drop.
  • This is the biggest yearly drop since RealFacts started watching O.C. apartments in 1994.
  • At $1,523 average rent, Orange County is back to 2006 fourth-quarter rents by this math.
  • Nationally, average rent — year over year — fell 3.7%.
  • Average vacancy at these big Orange County complexes was 6.6% vs. 5.3% a year ago.
  • However, vacancies fell from the second quarter by 1 full percentage point, biggest drop in 7 years. To RealFacts, this is the first sign that the market may be slowly turning from renters’ control back to the landlords.
  • Overall thoughts on O.C. market? Says RealFacts: “It’s a blue chip market….It won’t go down as far and will recover faster than other markets across the country.”

RealFacts coverage:

Real estate news:

Posted in: Apartments/Rents • Top tale • • | 46 Comments »

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