Ever since we stopped being homeowners and started being renters, we have wondered whether the rental rates would rise or fall. On the one hand, there are presumably more renters in San Diego now that the bubble has burst on the real estate market and less people are making the reach to own homes.
There are people like us who got out of the housing market in 2006 because it looked like we might otherwise be stuck with the homes we purchased. And then there are the people forced into foreclosure, or who were able to sell their homes before foreclosing.
All these people are now renting on top of all the other people who were already renting. It seems obvious that rents would rise given all that demand.
Then again San Diego already had a disproportionately high number of renters even during the boom.
It also seems that there also more homes available for rent thanks to slow home sales. Some sellers can just pull off the market entirely and stay put, but others have no choice but to rent out their homes.
According to today’s The San Diego Union-Tribune, apartment rents are rising despite an increase in vacancies in large complexes. The situation has experts perplexed.
But the U-T story is based on a survey by RealFacts of complexes with more than 100 units which leaves out all the smaller buildings, duplexes and cottages that are so plentiful in San Diego beach communities.
There are some important pieces of information missing from this data other than rents in small complexes:
1. How many single family homes have been added to the rental market in the past year?
2. How many condos have been added to the rental market over the same time? This list should include condos being rented out by their last buyers and those being reconverted into apartments by their developers.
3. What is the effect of these additions on rental rates overall?