Rents Suppressed as Tired Sellers Flood Rental Market with Homes
From the Sacramento Bee:
Sacramento-area renters continue to pay some of California's slowest-rising rents, even as the monthly payments have risen sharply the past year in most of the state's other major cities, according to an apartment industry researcher.
The reason: more supply than demand in a Sacramento region that built thousands of new apartments in recent years. The area's 94.2 percent occupancy rate -- barely up from 93.9 percent a year ago -- is the lowest for all of California's 23 largest metro areas, according to Novato-based RealFacts, which tracks trends in the apartment industry.
Industry experts also report a growing surge in single-family homes being rented as owners tire of trying to sell them in a sluggish housing market. That trend has actually led to lower rents in some cases and is likely to play a significant role in keeping apartment occupancy rates lower.
"I've actually seen rents go down," said Sheri Lutrrell of Sacramento-based Pacifica Management, which leases houses. "Even my real strong markets like Gold River, I'm lowering them $200 or $300."
Janet Regan, a broker with Citrus Heights-based Horizon Properties and president of the Sacramento chapter of the National Association of Residential Property Managers, said some home sellers are giving up. "We use to have all these different reasons why people put up their houses for rent. Now it's, 'I can't sell my house,' " she said. "These are people who have moved to other cities and other states. They're stressing."
According to RealFacts, the region's average monthly rent at apartment communities was $948 in July, August and September, a $24 increase from the same time last year...Rents have risen just 2.6 percent the past year in El Dorado, Placer, Sacramento and Yolo counties, and 1.3 percent in Yuba and Sutter counties, RealFacts reported...
The combination of supply and demand factors is pushing the region toward a fourth year of slow-rising rents, even though analysts have maintained through much of 2006 that the trend is nearing its end.
12 comments:
Sweet!
I am about a month out from re-negotiating my current lease.
I think a slight price reduction may be in order. :)
All the flippers who got stuck are trying to ease their woes by renting. They all think that if they can just make it to spring 2007 they will be ok. Sorry Charlie try Spring 2017. Negative cash flow will eat them alive. This situiation will only add to further price declines. Screw them they are bunch of idiots for buying. I hope that plumbing and electrical is working and that the tennat pay's their rent on time. WELCOME TO LANDLORD HELL FLIPPER.
This is why I told my former neighbor that mid-2005 was not a good time to buy "investment property"; i.e., a single-family home as a rental. Rent didn't cover expenses; rent wasn't going to cover expenses any time soon.
This is exactly the scenario I predicted -- and even though I got called stupid, unsophisticated, neurotic, and all sorts of other demeaning terms for being right -- I still kind of wish I had been wrong.
Rocklin Renter - do you negotiate in $dollars or six-packs?
Hene..
10/19/6 Rental rates in the Sacramento region continued to increase in the third quarter, up 2.6 percent from third quarter 2005 and up 8.7 percent over the past four years..... according to RealFacts Inc.
Of course there's no lawn to park my truck
Hey all you flippers now you have another thing working against you, it is called recapture for all the depreciation you take while renting your flip. When you sell your flip you have to account for it in your taxes. See now you have a big loss because you bought at the top of the market like an idiot, then you try to rent out the flip and have to take recapture into consideration, you have negative cash flow, you should have probably reduced the price 100K and dumped the stucco crap box when you had the chance, and now you have a bunch of tenants tearing your stucco crap box to pieces. YOU FLIPPERS WHO ARE STUCK NOW ARE JUST SAVY INVESTORS. MORONS ALL OF YOU.
Wow! Rent up 8.7 percent in FOUR YEARS! Does that even beat inflation?
Anon 6:21 -
It's all about the cases of Keystone Light baby!
Nothing but the good stuff for me. :)
hey rocklin renter
was the deposit in kilos or nickel bags ?!?
Regarding recapture,
the depreciation lowers the basis (purchase price), dummy.
Dime bags.
The killer part has been my electric bill.
My meter spins faster than a top!
DEPRECIATION, The Phantom Expense write off on taxes, does reduce the purchase basis price which would cause a larger tax on the seller providing the seller does not 1031 or DIE while owning as a trust (God has notary public offices Heaven wide).
Luckily we all realize that the house price decline will level off coming December 24 at 11:59PM just in time for Christmas. Real estate price appreciation will follow right after, thank God !
December 24 2015...though.
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