Friday, April 21, 2006

Sacramento Rents "Stagnant" for 3rd Straight Year

A trio of articles about renting in the Central Valley.

From the Sacramento Bee:

Region's rental market stagnant for a third year

Once again, it's still a renter's market. But just how long that continues is now open for debate. For the third year in a row, rents in El Dorado, Placer, Sacramento and Yolo counties have remained largely unchanged, rising in the past 12 months just $13 to an average of $929, a new landlord survey shows. From the first quarter of 2004 to the same period of 2006, average capital-area rents have increased only 3.1 percent, according to the survey.

What's good news, though, for the 35 percent of the region's population that rents is hard on investors who normally bank on increases of 5 percent to 6 percent a year. "It's kind of flat. It's kind of anemic," said Chris Bates, spokesman for Novato-based RealFacts, which analyzes rental markets for the apartment industry.

The Sacramento area's slim rise in rents contrasts with those in other regions around the state and in the West. Average rents in Riverside and San Bernardino counties rose 7.3 percent in the past year to lead the state. Rents in Los Angeles, Phoenix and Las Vegas jumped at least 6 percent.

The RealFacts analysis of apartment communities in the four-county Sacramento region shows first-quarter 2006 rents edged up $3 from the fourth quarter of 2005. The average occupancy rate, too, largely was unchanged at 92.7 percent, compared to 92.8 percent at the end of last year.

Typically, apartment owners prefer an occupancy rate of 95 percent to 96 percent. In early 2001, area landlords were clearly in the driver's seat with 97.7 percent occupancy rates, according to RealFacts.

From the Stockton Record:
The San Joaquin County housing market has seen some fluctuations since last summer, but the apartments scene continues to hold steady. Occupancy is high and rents are up just slightly year to year in the county, according to a first-quarter report from RealFacts, a Novato real estate firm that tracks the apartments market. The new report said apartment rents in San Joaquin County averaged $840 in the first quarter of this year. That was up 2.6 percent from the first quarter of 2005.Occupancy rose 1.4 percent year-to-year, to 94.4 percent.

RealFacts spokesman Chris Bates that's pretty good for apartment-complex owners but not enough leverage to give them room to be more aggressive in raising rents because renters do have some choices. Owners like to see higher annual rent-increase rates, in at least the 5 to 6 percent range, he said.

Housing prices have softened in recent months, but they still have reached high enough levels that many people are priced out of the market, especially with rising interest rates, said Thomas, who is based in Stockton.
From ABC30 in Fresno:
Despite a cooldown, prices in the housing market are still driving many people away from the American dream of home ownership. Now, even renting is costing more. It's the best option for people who can't afford or are waiting to buy a home, but renting an apartment is becoming more difficult. Three years ago, a two bedroom apartment in a Clovis complex rented for $350 a month. Today, the same remodeled units are pushing $700 to $800 a month.

"I have had people say that they're looking for homes, but then they come back and tell me, 'My God, Todd, my house payment's going to be this much money, i can't afford that.' So they're finding out that maybe they're just going to sit tight," said apartment complex owner Todd Wolfe...

Local realtors say they're finding some people who are selling their homes and moving into apartments temporarily, while the real estate market levels off.


Lander said...

Rentals: Up 32% (2000-2005)
Homes: Up 122% (2000-2005)

No bubble here, move along.

Happy Renter said...

There is negative yoy appreciation in some zip codes.

Inventory is steadily increasing
again, the sun is out and the ground is dry enough to stick a for sale sign in.