Average apartment rent in Modesto above $1,100. Where are prices headed next?

Rents continue to rise in Modesto, increasing 8 percent in the last year, and one real estate professional said renters could see two more years of sharp increases before the market starts to cool down.

The average monthly rent for Modesto apartments rose from $1,061 to $1,146 from December 2016 to December 2017, according to RentCafe, a nationwide apartment search website. This is for market-rate apartment complexes with 50 or more units, and the average rent is what complexes are asking new tenants to pay. Last year’s increase follows several years of rising rents.

RentCafe reported Modesto’s average monthly rent was $796 in December 2013. That means the rent for the average apartment has gone up $350 a month in four years, based on the RentCafe data.

“We’ve seen significant increases in Modesto,” said Duke Zagaris Leffler, a senior vice president with Liberty Property Management. The Modesto-based company manages about 3,000 single-family homes, condos, apartments and other rental housing from Sacramento to Fresno and from Oakland to La Grange in eastern Stanislaus County.

He points to the same culprits that have driven up rents in recent years: Very little housing is being built, the number of rental houses is shrinking as owners sell them to families who live in them, and Bay Area renters are moving to the Northern San Joaquin Valley in search of cheaper rent.

The average monthly rents in the Bay Area increased at a much smaller pace in the last year, according to RentCafe. For instance, the average apartment rent rose 1.5 percent in San Francisco and 2.7 percent in San Jose. But rents still are at least 2 1/2 times higher than Modesto’s, with the average apartment in San Jose renting for $2,620 and the average apartment in San Francisco renting for $3,430.

And this comes as Californians are being squeezed by rising rents and an affordable housing crisis, which has been made worse by the recent wildfires that have destroyed thousands of homes.

Gov. Jerry Brown imposed a six-month ban in October on rent increases over 10 percent to protect “the disaster survivors in the affected counties,” according to his executive order. Brown took this action in wake of reports of landlords raising rents to capitalize on the housing shortage.

This story was originally published January 16, 2018 at 3:07 PM with the headline "Average apartment rent in Modesto above $1,100. Where are prices headed next?."