Apartments Look Good, Relatively

BEVERLY HILLS, CA-Southern California apartments still look like a good place to put money, especially compared to other investments and apartments in other parts of the country, but a quirky economy and other uncertainties cloud the picture for investors. These were some of the conclusions of speakers at an all-day conference called “Apartments 2002″ last week in Beverly Hills.

Speakers, who ranged from brokers and investment advisors to REIT executives and lenders, pointed out that Southern California apartment markets remain among the tops in the nation in terms of supply versus demand because of the region’s housing shortage. But they pointed out that rent growth has slowed, cap rates have declined, vacancy rates have edged up, and the modest economic recovery has occurred without much job growth, which is essential for a sustained recovery.

Several speakers referred to the “jobless recovery” and said job growth is essential in order to drive demand for apartments. “The key for the apartment sector is increasing jobs,” said Mark Obrinsky, chief economist for the National Multi Housing Council.