The Fullerton real estate market, part of the Orange County housing market, seemed to be falling off recent gains in the most current tracking period. Both the commercial and residential sectors of the market seemed to be facing challenges, as fewer homes were being built and office rentals declined. According to an August 1, 2010 report from the Orange County Business Journal, “The trend of depressed rates and shrinking tenants continues to affect Orange County’s high-rise office space. The average asking lease rate for high-rise office space decreased $2.37 to $2.23 in the second quarter. OC’s high-rise office market accounts for more than a quarter of the office space in the region, totaling nearly 27 million square feet. The greater airport area makes up the majority of the sector, contributing more than 65% of the county’s total high-rise space. The high-rise sector experienced a slight increase in overall vacancy in the second quarter, up less than 1% from the previous quarter. South County and North County witnessed an increase in occupancy. The vacancy rate for high-rise space in South County declined to 23.8% from 25.6%, while North County dipped to 9.4% from 9.5%.”
Perhaps partially as a result of the expiring federal tax credit, more Fullerton homes for sale were resales, as new home sales declined substantially in the month of June. A July 20, 2010 report from the Orange County Register stated that “Housing starts nationwide hit their lowest level in eight months in June, another sign that the housing market is suffering from a post-tax-break hangover. The Commerce Department construction stats out this morning show… U.S. builders started construction on 5% fewer residences in June than May and 5.8% less than a year ago. Starts ran at slowest pace since October. That drop was largely due to a 21% drop in multi-family construction, primarily apartments. Single-family homes were off by just 0.7%. On the other hand, U.S. builders filed 2.1% more permits to build at a later date after a 5.9% drop in May. But Patrick Newport, economist at IHS, says single-family permits are the key number in this report and they “slipped for the third straight month in June, falling to their lowest level since April 2009. The drop is probably all related to the second homebuyer’s tax credit, which stimulated new construction early this year.”