Real Estate

Rental rates hold steady

Apartment rental rates remain flat in Modesto and throughout much of the Northern San Joaquin Valley, and most landlords must offer "move-in specials" to keep up their occupancy rates.

New statistics show the average monthly rent charged was $813 in Modesto during July, August and September, according to RealFacts. That was just $4 a month more than average rents two years ago.

Many renters, in reality, pay less than that because they're given move-in incentives -- like $200 off the first month's rent or the first month free with a one-year lease.

"Move-in specials are offered pretty much across the board for high-end to low-end apartments," said Debra Clover, who manages Stanislaus Property Management, which runs 10 small apartment complexes in and around Modesto.

Even with such deals, Clover said

her properties have vacancy rates around 15 percent, which is more than double what they were a year ago.

That's why rents aren't going up, even though costs may be. "Sometimes if you raise the rents, you increase your vacancy rates," Clover explained. Because the result doesn't increase overall income for apartment owners, they keep rents stable.

That generally was true during the region's building boom, too.

In 2003, when home prices were soaring, Modesto rents averaged $760 a month. During the five years since, they've crept up only 7 percent, RealFacts statistics show.

RealFacts, a rental research firm based in Novato, tracks rents and occupancy rates throughout the United States. Its research covers Modesto's 27 largest privately owned apartment complexes, which include more than 4,700 rental units.

Apartments, of course, aren't the only rental option for Modesto families these days. There are thousands of rental houses in the city, and their numbers are increasing daily as investors scoop up bargain-priced foreclosed properties. "We have a flood of investment homes on the rental market now," said Clover, whose company manages more than 300 of them.

Home rental rates are not easily tracked because many of houses are rented privately by their owners, who do not make their rates public.

Clover estimated that three- bedroom, two-bath Modesto rental homes typically rent for $1,000 to $1,200 a month, with rates in Salida, Turlock and Ripon being higher.

Liberty Property Management, the county's largest real estate management company, currently has about 55 houses available to rent, priced at $925 to $1,995 per month.

Since the foreclosure crisis started two years ago, more than 10,000 Stanislaus County homes have been repossessed by lenders.

Many of the families who had been living in those homes have left the county, Clover said.

"When these people -- especially those who were commuting to the Bay Area -- lose their houses, they don't stay here to rent. They move closer to their jobs," Clover said.

For more apartment rent statistics from RealFacts, go to www.modbee.com/housing.

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

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