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Why renting for much longer may not be wise idea
This home at 912 Yolo St. can be bought for $583.14 a month. - photo by DENNIS WYATT
If you are renting an apartment you may want to give serious thought to buying a home.

Rents for a typical two bedroom, one bathroom apartment among the seven complexes surveyed this month in Manteca shows the average rent has jumped $45 from last year to $895.

Home prices are so low in Manteca that for the first time in more than 30 years, Manteca buyers are dominating almost exclusively the resale as well as new home markets. This won’t last for much longer.

Perhaps it will start turning later this year or in early 2010. If you don’t sit down with a lender or a real estate agent soon and check out where you stand, you may be kicking yourself by the time 2010 rolls around.

It is taking some people who have been hunting six months or more to secure a home due to the new hoops you need to jump through for a loan plus the number of people making multiple offers. Also frustrating first-time buyers is the fact banks still like full cash buyers even if they come in less than your offer.

The real danger though is getting caught in a rental squeeze. Not only are rents going up in Manteca but they are going up in the Bay Area as well.

Marcus & Millichap Real Estate Investment Services has issued apartment rent forecasts for 2009 for three sub-regions in the Bay Area – San Jose, San Francisco, and Oakland.

The rent forecast calls for a typical apartment to hit $1,897 a month or jump 3.3 percent this year in San Francisco.

For San Jose and Santa Clara County, the typical apartment is projected to rent for $1,652 a month this year for a 5.6 percent increase.

Alameda and Contra Costa counties along with Oakland should see a 6.4 percent jump to $1,370 this year.

What makes this all the more interesting is the fact real estate experts in the Bay Area say this is giving tenants an edge. That’s right. Increases of up to 6.4 percent give tenants an edge. That would be the same as Manteca apartment rents jumping $57.28 per month this year.

What gives?

It is important to remember that once the foreclosure meltdown triggered by greed and liar loans makes its way through the system, the market for housing will return to familiar territory. Supply and demand can’t be ignored. Hopefully, the economy will have healthy gains but not get overheated by outside influences such as liar loans that sent prices into outer space.

Remember what happened in the mid-1990s when the Bay Area started to become unaffordable for renters. They headed east and either rented for a lot less or became homeowners.

It will happen again.