The question should be why rent?
Deutsche Bank has rolled out a study that shows in a growing number of markets it is now 15 percent higher to rent a three-bedroom, two-bathroom apartment than it is buying a home with a similar floor plan.
Historically, renting an apartment has been about 10 percent lower than buying after factoring in the tax savings of owning.
Each market such as Manteca is different but consider this: A newer two-bedroom and one-bathroom apartment renting in the $800 range in Manteca is actually about the same or higher than the monthly cost of buying many three-bedroom single family homes .
That wasn’t the case in 2006 nor was it the case in 1996.
Average apartment rents rose 2.7 percent in 2011 according to the real estate research firm known as Reis. At the same time the national vacancy rate dropped below 5 percent. That’s the first time that has happened since 2001.
Two markets that ultimately impact Manteca - San Jose and San Francisco - saw apartment rent increases jump 5.9 percent and 4.9 percent respectively in 2011.
Some Manteca-based real estate agents are already reporting increasing demand for entry-level homes. They also have noted a slight jump in clients who are now searching for a home due to rising apartment and house rents.
While there isn’t a stampede, the trend can be seen as a precursor to the housing market entering true recovery mode.
Investors are taking note of the trend of rising rents. The National Association of Realtors reported last month investors bought 65 percent more homes in 2011. That translates into 1.2 million closed escrows or just over one in every four existing homes that were resold.