Bakersfield rental market growing
| Thursday, Oct 20 2011 12:01 AM
Last Updated Thursday, Oct 20 2011 12:01 AM
Average monthly rent in Kern County rose 2.8 percent to $850 in the third quarter compared with the same period last year, according to a new report from RealFacts, a Novato-based real estate data firm.
The company arrived at an average after a survey of owners of income property ranging from studio apartments to townhomes. Single-family homes were not included.
The county had the 16th highest rent of 24 metropolitan statistical areas in the state, but its 98.1 percent occupancy rate earned it the state's No. 4 spot on occupancy.
That's no surprise, given the region's high foreclosure rate, said Keith Wasserman, president of Gelt. Inc., a Tarzana-based real estate firm that owns about 350 rental units in the Bakersfield area. People who have lost their homes need a place to live, Wasserman said, so they are renting.
"On the higher-end apartments we get a little bit of competition from houses for rent, but on the lower-end apartments we've been able to push rents a little bit because there's a lot of demand," he said.
Foreclosures aren't the only reason for the trend toward higher rents, said RealFacts co-founder Sarah Bridge.
In some cases, even those with good credit who can afford a purchase are choosing to rent an apartment rather than buy, particularly younger people who would be candidates for starter homes.
"The Gen Y generation is sort of disillusioned with the idea of owning a home," Bridge said. "They saw what happened with their parents. It's going to be a while before the housing market figures out a way to regain the confidence of the average consumer. A lot of people feel pretty burned.
"Young people also have different values. They don't want a big mcmansion in the suburbs. They'd rather live closer to work in larger metro areas."
Over the last three quarters, rent for two-bedroom townhomes in Kern County spiked the most, up 10.7 percent compared with the first three quarters of last year. Rent for three-bedroom, two-bath units declined an average of 0.7 percent.
But overall average rents in Kern County have only grown 1.1 percent over the last four years, and have yet to return to the $863 per month peak of 2008.
The Bakersfield area is following a pattern typical of inland communities, Bridge said.
"Rental markets that are inland are the first to feel it when the market collapses, and the last to recover," she said.
Statewide, average rent was $1,446 in the three months ended Sept. 30, a 5.3 percent hike over the same quarter last year. Average occupancy in California was 95 percent.
Nationally, rental units seem to have emerged from a two-year slump that followed in the wake of the 2007 economic downturn, Bridge said.
Last year rents began to rise and vacancy declined, but the overall average rent in 2010 was still lower than 2009 rates, she said.
This year, the 38 of 47 markets listed in the report posted gains in rent.
California's third quarter rent yielded both the biggest rent increase in the nation and the biggest drop in rent.
San Francisco saw the largest gain in the nation, with rent there swelling 3 percent to $1,697 per month. But the highest rent in the state was in the San Jose-Sunnyvale-Santa Clara area, which commanded average rent of $1,792.
Oxnard's 2.2 percent drop to $,1,463 per month was the steepest rent decline for both the state and the nation.
