The OC Is Looking Good For Multifamily
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Things are looking up in Orange County for multifamily development next year, while some other CRE sectors aren't expected to change much.
Residents these days want to be closer to employment centers and retail, according to City of Tustin director of economic development John Buchanan (pictured second from left). This trend is expected to continue in the future.
Affordable housing is also a big issue statewide and will be next year as well.
"If wages are not growing at the same rate as rents are going up, the problem's only going to get worse," Buchanan said.
LaTerra Development CEO Charles Tourtellotte is far left, along with Trumark Homes division president Richard Douglass (second from right) and moderator Allen Matkins partner William Ahern (far right) at last week's Bisnow Orange County's 2017 Forecast event in Irvine.
Driverless cars and ride-sharing should become a bigger deal in the near future, according to Douglass.
Tenants are more mobile and seem to be more willing to move around to find the right location, according to Tourtellotte (pictured left with John).
Regional planning will play a bigger role in the future, Buchanan said.
He said there will be "a lot of mandates put through" that affect development, including those with respect to air quality, water quality and transportation systems.
There are some concerns about the near future, including talk about interest rates and what might happen with them.
For multifamily, construction debt will be constrained in 2017, however, it's available, according to Tourtellotte.
He thinks banks are now "letting off the brakes a little bit."
Job growth will also be very important since "that's really where the engine is" for the rental business, he said.
Since the median home price is $732k, the affordability of homeownership will also be a factor in the next year, Tourtellotte said.
Many won't be able to afford to buy a house, so they will opt to rent instead.