Ventura Multifamily Market Report
Market Overview
Ventura County has recently experienced an influx of new suburban multifamily complexes, a trend that doesn’t seem to be slowing down any time soon. Furthermore, Downtown Ventura has begun the process of converting obsolete properties into multifamily buildings and garden-style apartments. New policies being implemented in coastal cities in California have spurred multifamily development, lowering parking requirements for new buildings in downtown Ventura and near its train station. In addition, developer and investor interest in the county’s numerous suburbs has contributed to multiple proposals to rework properties for multifamily use. Local neighborhoods oppose apartments in their areas, making downtown a preferred location for the implementation of modern multifamily living.
Multifamily Market Snapshot
- Sales Volume: $327M
- 12-Month Deliveries in Units: 456
- 12-Month Net Absorption in Units: 296
- Market Cap Rate: 4.5%
- Average Price Per Unit: $397K
- 12-Month Rent Growth: 0.7%
- Vacancy Rate: 4.7%
- Units Under Construction: 382
Vacancy & Rent Fundamentals
Ventura offers an affordable alternative to neighboring communities, such as Santa Barbara or Los Angeles County. The area has seen an increase in demand over the past 12 months, resulting in a vacancy rate of 4.7% as of Q3 2023, which is attributed to the increase in deliveries to match demand. One of the driving factors of the spiked vacancy rate is the development of Town Square at Wagon Wheel, a 448-unit community that came to market selling 20 units per month. The vacancy rate is anticipated to continue decreasing, as the median home in Ventura County is $800,000. Therefore, renting multifamily units, which average $2,508 in the metro, is a cost-effective alternative.
Rent
Rent growth in the area has moderated to 0.8% year-over-year, lower than the long-term average of 4.8%. Renters have become more price-conscious, leading to downsizing into smaller units to save money. Affordability constraints are a significant burden for many renters, particularly in Class C properties where the average rent is $1,920 per month. Rising unaffordability concerns have led to a population shrinkage in Ventura County and other coastal Southern California metros, according to the U.S. Census Bureau. However, Ventura County’s easy accessibility and proximity to neighboring metro’s keeps its allure, and it is less expensive than Los Angeles or Santa Barbara County.
Construction
Most of the new construction is in the coastal city of Ventura. A significant project underway is the Willows project by G.H. Palmer, a 306-unit development with luxury amenities and retail space scheduled to open later this year. Currently, there are 382 units under construction in the market. Difficulty in securing construction financing, particularly with rising interest rates, has hindered construction starts; however, over the past decade, approximately 4,500 units have been added to the inventory, leading to a 14.5% increase in overall inventory.
Sales
The Ventura County 12-month sales volume is $372 million as of Q3 2023, surpassing the historical average of $277.9 million. In the past year, the average price per unit has been $397,000. Notable sales include Universe Holdings acquiring the 45-unit YOLO West Apartments in Ventura for $20.4 million. Additionally, YOLO East Apartments in Thousand Oaks, a 45-unit community built in 2020, was sold by New Urban West for $22.6 million. The bulk of investors are based in the United States, looking for properties with value-add opportunities.
