Apartment rents up statewide, but not much in Modesto area

MODESTO -- California apartment rents jumped 5.4 percent during 2012, but they barely nudged higher in the Northern San Joaquin Valley.

Rental data collected by RealFacts found apartments statewide cost an average $1,521 during October, November and December. That was $79 more per month than the year before.

In Stanislaus, Merced and San Joaquin counties, however, rents rose just 1 percent to 2 percent during the year, and apartments cost far less than elsewhere in the state or the nation.

Modesto apartments, for example, charged an average $802 per month, which was only $10 more than they cost back in 2011.

Rents are even more of a bargain in Merced, where apartments asked an average $781.

Prices in Turlock ($842) and Manteca ($993) were higher but still well below the national average of $1,040 per month.

In Sonora, rents fell to $833 per month, which was $7 less than the year before.

RealFacts speculated that increasing national demand for single-family homes has been holding down apartment rents: "Statistics confirm a more robust for-sale housing market is now emerging, recovering from its long hiatus ever since the subprime mortgage crisis struck down our global economy in 2007."

Record-low mortgage interest rates also are making it more affordable for apartment renters to become homeowners.

As a result, RealFacts said apartment vacancies have increased in about half the cities it tracks. In Modesto, however, vacancies haven't changed much.

One thing that has changed in Modesto is an increased supply of single-family homes for rent.

In 2007, before the foreclosure crisis hit, the U.S. Census Bureau's American Community Survey estimated renters occupied 25,316 housing units in Modesto. By 2011, that number had grown to 31,495. That's 6,179 more rentals — a 24.4 percent increase.

That's primarily because many investors bought foreclosed Modesto houses and turned them into rentals.

That has created an abundance of homes for rent in Modesto, and many houses now rent for less than similarly sized apartments.

According to data provided by RentRange.com, the average monthly rent for a three-bedroom Modesto house is about $1,100, while a two-bedroom house rents for about $840.

The average asking rent for a Modesto apartment with three bedrooms is $1,168 and with two bedrooms it's $894, according to RealFacts.

Bee staff writer J.N. Sbranti can be reached at jnsbranti@modbee.com or (209) 578-2196.