by Calculated Risk on 1/21/2010 06:31:00 PM

From Jeff Collins at the O.C. Register: O.C. rents fall 6.7% to mid-2006 level

The average rent for a unit in a large Orange County apartment complex fell to $1,473 a month in the fourth quarter of 2009, the fifth straight quarter to see monthly rents drop.

Apartment tracker RealFacts reports today that numerous empty apartments forced local landlords to cut rent $105 a month on average — 6.7% — vs. the fourth quarter of 2008. And it’s the lowest average rent in 3 1/2 years.

“They’ve come down quite a bit,” observed Hugo Gonsalez, manager for Nextrent.com, a Santa Ana rental listing service. “You see eight empty units (in an apartment complex) where you used to see one.”

Reis reported that the U.S. apartment vacancy rate hit a record high in Q4, and the Census Bureau reported the total rental vacancy rate was at a record 11.1% in Q3 (Q4 numbers will be released in early February).

The higher vacancy rate is being driven by people doubling up during the recession, and also by the first time home buyer tax credit. This is pushing down rents, and will also put pressure on house prices (since renting is an alternative).