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Manteca apartment rents drop since start of 2009

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Manteca apartment rents drop since start of 2009

Advertising in the front of Westwood Village Apartments at Center Street and Union Road are a sign of a softening of the rental market for Manteca apartments.

HIME ROMERO/The Bulletin


POSTED September 20, 2009 2:54 a.m.
A glut of rental homes is sending Manteca apartment rents downward virtually across the board.

A Manteca Bulletin survey of seven complexes representing more than 700 of the city’s 3,421 apartment units shows vacancy rates are increasing as it is now possible to rent a home for the same price as you’d pay for two bedroom and three bedroom apartments.

Apartment rents had been climbing for the past three years after being stagnant for about five years.

One-bedroom units in four of the five complexes are down $25 to $150 a month compared to January while one is up $10. The biggest demand is for two bedrooms and one-bathroom apartments. Even so, rents are down for 2-1 combos from nine months ago in several of those complexes.

A typical two bedroom, one bathroom apartment is now renting for $880 a month – down from a record $895 in mid-January.

A glut of available rental housing has driven down the monthly prices the most popular type of homes — three bedrooms, two bathrooms with 1,600 to 1,800 square feet in solid neighborhoods — can command. Thirty months ago, they were pushing $1,600 a month. Now they are between $1,100 and $1,300 a month.

There are two bedrooms and one bathroom house rentals available from $800 to $875 a month...

Nine months ago there wasn’t a lot of available rental housing under $1,000 in Manteca except apartments.  That is no longer the case.

Real estate experts contend the drop in apartment prices won’t be long-term. A modest housing recovery will push housing rentals up slightly.

There hasn’t been a new apartment complex built in Manteca since 2001 and those were luxury apartments. You can now rent a one bedroom and one bathroom apartment at Paseo for $895 a month. You couldn’t have done that in January when they were fetching just over $1,000 after renting for $975 from when the luxury complex first opened.

It has been 15 years since mid-range apartments or any other complex of consequence has been constructed in Manteca.

And unless more sub-$1,000 apartments are built in Manteca the upward pressure will eventually resume on apartment prices. The reason why rents were stagnant initially then dropped from 2004 to 2007 had everything to do with liar loans. Those who may have had a tough time renting an upper end apartment were able to buy $350,000 plus homes. Once the liar loans ended and the foreclosures started, rent were inching upward again.

Drop in home prices
lure apartment renters
to home ownership

The reason those who may have been happy renting an apartment are now buying is simple. It is now cheaper month-to-month to buy a middle-price home in popular Manteca neighborhoods than it is to rent in the same area.

You can rent a home in the Sierra Creek neighborhood near Joshua Cowell School, in Chadwick Square near McParland School as well as in Springtime Estates in the triangle bounded by Louise Avenue, Highway 99, and SaveMart-Longs for less than $1,400 a month. Or you could pay less per month to buy similar homes in the same area with a 3.5 percent down FHA loan.

For months, you’ve been able to buy homes in pre-1980s neighborhoods for less than it cost to rent them. Now it’s possible to do it even in 1990s neighborhoods and — in some cases — areas built in the last eight years.

Long-time mortgage lenders and real estate agents in Manteca are telling clients if you can afford to buy a house, you need to do it now before things change. They expect the market to start eroding in terms of affordability after 2009.

Manteca housing inventory is continuing to drop from a record 651 existing homes for sale in September 2007 to 151 as of last Monday.

There were 1,165 pre-existing homes sold within Manteca’s city limits during 2008.

To contact Dennis Wyatt, e-mail dwyatt@mantecabulletin.com


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