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Renters may be feeling the heat as 'out-of-town' renters arrive with slightly fatter wallets

It appears local renters may be in for more bad news — or at least more of the same.

Just weeks ago, a survey of local rental units found the city's sinking vacancy rate was making it tougher than ever to find an apartment for rent in the city.

Now it appears renters moving to Bakersfield — or at least thinking about moving — from other metro areas have a heftier budget to spend on rent.

An analysis from Rob Warnock, a senior research associate from Apartment List, shows Americans are moving again as pandemic restrictions have eased, including into metro Bakersfield and elsewhere.

"It means not only are more people moving, but movers today have higher incomes and higher budgets than ever before," Warnock said in an email. "This is putting added pressure on already-competitive markets (like Bakersfield) and contributing to rising rent prices."

In the second quarter of 2021, 27 percent of apartment searches into Bakersfield are coming from out-of-town apartment seekers.

That in itself isn't terrible news, as the share of inbound "out-of-town" search interest into Bakersfield has actually been pretty steady over time.

In the same quarter last year, the percentage of newbies was also 27 percent, and in the second quarter of 2019, it was actually higher at 32 percent.

Here's the rub: "This migration flow is putting pressure on local rent prices because these movers have budgets that are ... higher than the existing residents who are also searching for a new apartment," Warnock said.

A leading observer of the local market, multifamily residential broker Marc Thurston at ASU Commercial, said he is seeing renters from all over the United States considering Bakersfield as a relocation destination.

"I believe the cost of living is very attractive to these new residents as many of them are relocating from communities where the high cost of living means that they will never be in a position to save money, much less buy a home," Thurston said. "The ability to work remotely plus save money is an attractive draw."

These "out-of-town" searches in the most recent quarter are hailing from all over, but not surprisingly, a large chunk are from Southern California, Warnock said.

"Orange County is actually the largest contributor, accounting for 20 percent," he said. "L.A. County accounts for another 14 percent."

The remainder of searches that aren't from SoCal are scattered across many regions — including Northern California, Las Vegas and Texas.

What does this mean for local renters looking for an apartment?

Existing local renters who have not been actively looking in the rental market for the past two years are going to experience sticker shock as they start to look around at the different apartment communities, Thurston said.

"The strong demand from out-of-area renters and the lack of new supply is resulting in rapid rent growth," he said.

Renters relocating to Bakersfield may find the current asking rents quite attractive compared to what they see in the cities they are leaving.

Ian Sharples, who serves on the board of the Income Property Association of Kern, said he's seeing a lot of people relocating to Bakersfield from the so-called Inland Empire in San Bernardino and Riverside counties.

Valley communities continue to attract people looking for new opportunities in an environment with a lower cost of living.

But it's not a new trend.

"I think this was happening before the pandemic," Sharples said.

At the national level, this migration flow is putting pressure on local rent prices because these movers have budgets that are 18 percent higher than the existing residents who are also searching for a new apartment, according to Apartment List's data.

One silver lining for local renters is the differential here is not nearly that wide.

Like the national trend, the Bakersfield metro area is also seeing a significant jump in the rental budgets of those looking at moving here from out of town, Warnock said.

But the increase is not as large.

"Today, incoming budgets are up 7 percent quarter over quarter and up 11 percent year over year," he said.

It does put more pressure on local renters looking for an affordable apartment. And as vacancy rates have shrunk, that pressure was already high.

"Once these new renters get comfortable with the city and save money due to the lower cost of living, I think these numbers will ultimately result in new residents becoming home buyers," Thurston said.

"This will further place more demand on the existing single-family home market," he said, "and the new-construction industry."

Reporter Steven Mayer can be reached at 661-395-7353. Follow him on Facebook and on Twitter: @semayerTBC.