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Local apartment rent up 1 percent in quarter

Real estate: SCV’s vacancy rate exceeds Antelope Valley, Burbank, Pasadena

Posted: November 8, 2010 4:40 p.m.
Updated: November 8, 2010 4:40 p.m.

Average rents for apartments in the SCV are up 1 percent. One-bedroom apartments are moving, but two-bedroom units are limping along. Vacant homes may be impacting the market, depressing rental prices and driving up apartment vacancies.

 

During the third quarter of 2010, the average rent for an apartment in Santa Clarita has increased 1 percent, according to RentJungle.com, an apartment search and market research website. Average rent increased by $21 to $1,482.

The majority of cities realized increases in the 2 to 5 percent range, an indicator perhaps of Southern California’s still
weak economy.

Apartment rents nationally, increased by 5 percent over the same period, with the average unit renting for $1,356. This is the continuation of an improvement trend that started in January. 

“We are seeing some encouraging signs in the overall national rental market for the second quarter in a row,” said Jon Pastor, CEO of Rent Jungle. “Rent increased in the second quarter, making this past period the second continuous quarter of increases.”

Local market
On average, one-bedroom Santa Clarita apartments rented for $1,125. Two-bedroom apartments rented for $1,445.
Rent Jungle calculates rental figures by analyzing over 1 million apartment ads per month, and calculates rents by using a 10-mile radius from the center of a city.

The city of Santa Clarita’s economic development division issues monthly economic reports covering a wide area of economic indicators. The residential rental information is provided by Reis Inc., a real estate market analyst.

According to EDD’s latest report, issued for the month of August, the average SCV rent was reported as $1,438.

Average local rental rates remained below the average rates for third quarter 2009 reported Rent Jungle. But the city’s EDD reports that second quarter rents were comparable between 2009 and 2010, only varying by $1.

As of October however, the average rental in the SCV was trending up to $1,526, surpassing the third quarter 2009 average rental per the Rent Jungle study.

“The Santa Clarita market looks like it has turned the corner,” Pastor said. “Second quarter rents remained flat, so the third quarter’s increase of 1 percent is encouraging.”

The company reports that the average apartment rent over the prior six months in Santa Clarita increased by $76, or 5 percent.

Nationally, and locally, one bedroom apartments saw the largest percentage increase. The nationwide increase was 7 percent. The local increase was 3 percent.

The trends differed for two-bedroom apartments. Nationwide there was an increased demand of 5 percent, and rate increase, for two-bedroom units.

The local demand for two-bedroom units decreased by 4 percent. The decrease is perhaps another indicator of a weaker local rental market.

The EDD reports that studio and one-bedroom rentals in the SCV are priced lower than those in the Los Angeles metro area by $45 and $13 respectively. The division also reported that two-bedroom units were priced lower as well.

The city also reports that vacancy rates are up. The second quarter vacancy rate in Santa Clarita was 9.5 percent, which is higher than the previous quarter and same period in the previous year.

The SCV’s vacancy rate exceeded those of Antelope Valley, the Burbank-Glendale area, Pasadena and the L.A. metro area.

The vacancy rate for the L.A. metro area was only 5.5 percent. The western U.S. had an average vacancy rate of 6.8 percent, compared to 7.8 percent for the entire country.

“We may be seeing a more permanent shift away from owning to renting,” said Geng Wang, co-founder of Rent Jungle.

Vacant homes
Vacant homes may be impacting the market, depressing rental prices and driving up apartment vacancies.

Nationally, with millions of foreclosed home, and anxious buyers watching the market before buying a home, home ownership is reported to be at the lowest levels in more than a decade. According to the Census Bureau, the rate of home ownership for April through September hovered at 66.9.

About 18.8 million homes, or 11 percent of all houses and apartments, were vacant, according to the government survey.

Economist Patrick Newport of HIS Global Insight told Associated Press that the general consensus is that it just makes sense for a lot of people to rent in this market.

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