Foreclosed homes compete with apartments in the Inland Empire

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Don’t expect to see much apartment construction in the Inland Empire any time soon. As everyone knows, a glut of foreclosed homes has flooded much of Riverside and San Bernardino counties, and those homes compete with apartments for tenants, according to a new report by real estate brokerage Marcus & Millichap.

That’s especially true in outlying areas such as Palm Springs, Perris and southwest Riverside County, the report said.

Waning demand and competition from foreclosed houses should drive Inland Empire vacancy up slightly to almost 10% this year. That’s a much slower rise, however, from the jump of 2.4 percentage points last year.

Asking rents are forecast to fall 3.7% to an average of $969 a month, while actual rents should fall 5.6% to $895.

Those dreary numbers for landlords will result in the completion of just 520 new apartments this year, down from 1,260 units last year, Marcus & Millichap said.

-- Roger Vincent