Fourteen years ago when the median price of a home being sold in Manteca reached $429,000 you could rent a one bedroom apartment for an average of $769 a month in Manteca.
That was the average price to rent a one bedroom at the Stonegate, Park Place, Laurel Glenn, Vista Verde and the just finished Paseo Villas apartment complexes in 2006.
Now as 2020 dawns the average rent for a one bedroom apartment at those five complexes has doubled to $1,538. Meanwhile the median home sale price closing escrow is at $422,248.
The 14-year comparison of rents versus buying underscores why lenders are starting to finance more apartments in Manteca and elsewhere. Apartment rents during the housing crisis stalled for several years but continued to climb as housing tanked. Overall housing prices in Manteca — both new and resale homes — have not quite recovered 100 percent across the board.
The 29th annual Manteca Bulletin apartment rent survey of larger complexes built in Manteca since the late 1970s shows apartment rents, on average, across the board have increased 7.1 percent since the end of 2018. At the same time housing prices based on closed escrows are up 5.3 percent going from $400,900 to $422,248.
Last year marked the third consecutive year Manteca renters faced only single digit gains. The average rate hike was 7.8 percent in 2018 and 2.4 percent in 2017. In the previous two tears rents surged by double digits — 13.7 percent in 2015 the highest since the Bulletin started conducting its annual rent survey 29 years ago.
Rents have not stopped climbing since 2010 — the last year there was a glut of foreclosed homes in Manteca. That’s when many renters were able to purchase homes with monthly mortgage payments that were lower than their apartment rents. The Obama-era tax credit of up to $7,500 for first-time homebuyers eliminated the need for many apartment renters to come up with much money for the down payment.
Just like with homes, the bottom of the market saw the biggest increase in rents. A 440-square-foot apartment — providing one is available for rent — in Westwood Village on the south side of Center Street west of Union Road rented for $1,015 a month two years ago. Today it rents for $1,105.
By comparison the most expensive apartment in Manteca at the end of 2019 was a three bedroom, two bathroom unit at the Tesoro complex for $2,425 a month or $2,625 a month with a private garage.
Rent increases in 2019, however, were a mixed bag based on floorplans. Two bedroom units — whether they had two or one bathrooms on a complex by complex basis were either stagnant or saw slight increases or decreases.
One bedroom unit rents were up 7.3 percent with the biggest increase at Paseo Villas where the rent increased $100 a month from $1,615 in 2018 to $1,715 in 2019. Right behind Paseo Villas was Laurel Glenn at $1,650, Stonegate at $1,539 and Park Place at $1,250.
The average rent for the complexes that offer three bedroom apartments — Tesoro, Paseo Villas and Stonegate is now at $2,226 a month. That is up from $1,972 a month at the end of 2018.
For $42 less a month with 5 percent down, the average rent for a three bedroom apartment in Manteca would cover the monthly mortgage, taxes and insurance for a $330,000 home. There are currently 10 traditional homes and townhouses listed in Manteca for $330,000 or less.
Trends that have surfaced in 2019 include:
*Average rents have increased in 2019 compared to 2018 in Stockton and Tracy but dropped slightly in Modesto. The average rent in Modesto is down 8.72percent over the same time last year as it now stands at $1,065. Other average overall rents are $1,770 for Tracy and $1,269 for Stockton.
Rents are increasing double digit across the board in Stockton where a typical one bedroom, one bathroom apartment increased 17.1 percent to $1,089 compared to $1,538 for the same type of floorplan in Manteca.
*Property managers have indicated they expect rent hikes in 2020 to mirror 2019.
*Modesto overall for apartments for the past six years had been the least expensive place in the region to rent. Modesto at $1,065 is $96 less a month than Stockton, $474 less than Manteca, and $635 less than Tracy.
*Manteca’s average overall apartment rent per month is $161 less a month than Tracy this year compared to $198 less a month in 2018. It is currently $594 less to rent in Manteca than Livermore compared to $490 in 2018, it is $985 less a month to rent in Manteca than Pleasanton compared to $957 in 2018 and $1,498 less a month to rent in Manteca than San Jose compared to $1,356 in 2018. The overall average rent in San Jose is $3,037 a month for apartments, up 0.43 percent from 2018. That includes $2,693 for a typical one bedroom and one bathroom.
*Manteca apartment managers report a continuation of the trend that started six years ago with single renters with jobs in San Jose or the Silicon Valley moving to the Northern San Joaquin Valley to rent.
*Apartment rents since 1991 in Manteca when they averaged $425 a month have increased 270 percent to $1,575 while the median selling price of Manteca homes has gone up 218 percent during the same time period from $125,900 to $400,000. At the same time when housing prices plunged from 2007 to 2011 by an average of 45 percent apartment rents were either stagnant during that time period or continued to see 3 to 5 percent increases.
To contact Dennis Wyatt, email dwyatt@mantecabulletin.com
