Residential Income Market

OC rents are expected to rise 2.3% in 2009, to an average of $1574 per unit. The Southern California cost of living in rental housing rose 4.5% last year, which was the smallest increase in about eight years according to the CPI. Vacancies are also expected to rise slightly by about 1% to a total of 5.9% on average. Apartment construction will exceed last year's levels. Irvine and south Anaheim are expected to see the most new construction with 1600 units in Irvine and 1000 in south Anaheim. A greater number of unsold condos have hit the residential market which will likely compete with multi-unit rentals. The strongest demand for rentals will be near the large business districts such as Newport Beach, and Tustin. Vacancies in these cities are projected to be 3.5 to 4.5%.