We're all up in Mendoland
Renter's market
Prices dip, deals abound as exodus of apartment dwellers pushes vacancies up
Thursday, April 21, 2005
By MICHAEL COIT
THE PRESS DEMOCRAT
CRISTA JEREMIASON /PD
In searching for an apartment, Jo Jackson found clear signals Sonoma County is a renter's market - flat rents, discounted security deposits, even favorable pet policies.
After looking over the county's newest complexes, she picked a two-bedroom, two-bath ground floor unit at Mountain Shadows Apartments, which opened in Rohnert Park three years ago.
"It's absolutely a renter's market," said Jackson, a Macy's cosmetics and fragrance manager. "We've been looking at a lot of places in the area. I just liked the feel of the whole atmosphere around here."
Sonoma County remained a good market for renters during the first quarter of 2005 with rents dipping and vacancies rising, according to two surveys.
The county is not alone with rental markets across the Bay Area and much of California and the West showing sluggish movement despite job and population growth.
One factor continues to be renters moving up to buy homes and condominiums. Many are taking advantage of low interest rates that can make mortgage payments competitive with rents, particularly for larger, more expensive apartments.
"There is no sign of any impetus for rental growth - good news for renters and bad news for owners of apartment buildings," said Caroline Latham, chief executive of RealFacts, a Novato rental market research company that released its latest quarterly survey today.
Sonoma County's average asking rent per month was $1,081 during the first quarter of 2005, down a fraction from $1,083 for the fourth quarter of 2004 and even with a year ago.
The vacancy rate for this year's first quarter was 8.6 percent, an increase from 7.2 percent for the fourth quarter of last year and up from 7.6 percent a year ago.
Across the Bay Area, the average asking rent was $1,277 during the first quarter, down from $1,279 in last year's fourth quarter and nearly even with $1,276 a year ago. The region's average vacancy rate was 6 percent for the first quarter, even with the fourth quarter and down from 6.3 percent a year ago.
The latest semi-annual rental market survey for Sonoma County from Meridian Commercial Inc., of Larkspur, tracked the RealFacts report.
"It just confirms that there is some softness in the market," said Scott Gerber, a broker at Meridian Commercial Real Estate Services, who has tracked the North Bay rental market the past decade.
Apartment rents have hovered around the same level for more than two years and vacancy rates have stayed above the 5 percent target over the same period.
"It's pretty healthy. Some areas have improved," Gerber said.
There are good deals even in the newest properties featuring ample amenities. And half of the county's complexes are offering promotions including free rent and security deposit waivers.
Someone moving into Mountain Shadows, for instance, is only going to pay $25 more a month compared with someone who moved in three years ago when the complex opened during a wave of new apartment construction in the county.
Mountain Shadows' vacancy rate is 7 percent. That is better than the countywide average and more prospective renters are turning up, said Amanda Persico, the complex manager.
"We're moving up. Definitely traffic has picked up," she said.
The apartments are large, feature washers and dryers in units, as well as a modern pool and fitness center.
Jackson, 59, decided to sell her Larkfield home of nine years after her husband died and rent an apartment with her mom rather than buy another home. She will invest and plan for retirement.
She was attracted to a ground-floor unit, living within walking distance of a golf course, and the doggie treats her sheltie gets at the rental office. "Those are like little extra touches that you don't get in a lot of places."
Rents range from $1,295 for some one-bedroom apartments to $1,795 for some three-bedroom apartments at Mountain Shadows. Renters can save half or an entire month's rent or get waived security deposits of $300 to $500, Persico said.
Yet rents should be rising and vacancies dropping given the county's improving job growth, as well as steady population gains, Gerber said.
"There's really no question that it's due to home purchasing activity. People that push that wave are coming out of apartments," he said.
New construction has slowed considerably, so greater supply has not been a significant factor in recent rent or vacancy trends.
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