More than 14 percent of Inland Southern Californians are still unemployed, and little new residential construction is currently happening or likely to happen before the end of the year.
That should continue to make apartment complexes in Riverside and San Bernardino counties attractive to investors, a forecast released this week from commercial real estate firm Marcus & Millichap found. Sales of apartment complexes were already up 18 percent in the 12 months leading up to the end of June.
For the rest of the year, investors with cash reserves are likely to be buying some of the better apartment properties in the Inland area. Marcus & Millichap, in its third-quarter forecast, predicts that these properties are offering better investment yields than comparable communities in the coastal counties right now.
Douglas McCauley, regional manager for Marcus & Millichap, said these are the complexes that are generally newer in good locations and with at least 100 units.
Also, some of the smaller, less luxurious communities could be sold, many by lenders.
"Private buyers will continue their purchase of lower-tier REO and value-added transactions by year's end, driven by potential upside," the report said.
High unemployment and underemployment means that thousands of people have to look for new housing options. More than 10,000 new households have been created in the Inland area in the last 12 months, many of them set up by people who were forced to find roommates.
Also, there is little new construction. Developers will probably build 100 new apartments this year, compared to an average of 2,000 in the previous 10 years.
The vacancy rates have been declining across the Inland area in the last 12 months. The lowest vacancy rates are in Riverside , Corona and Rancho Cucamonga. San Bernardino and Southwest Riverside County have the highest vacancy rates.
