Apartment rents in San Francisco have — according to listing platform Zumper — declined 9.2 percent from last year thanks to the COVID-19 pandemic.
The drop in demand for apartments in the urban centers of the Bay Area usually has a ripple effect on the commute cities in the Northern San Joaquin Valley.
That’s not the case this time around.
Rents are up across the board an average of 3 percent since the 29th annual Manteca Bulletin rent survey was conducted six months ago.
It fits into the scenario that many economists are painting of a potential tectonic shift in the economy as businesses devise ways to operate in the new era of COVID-19 restrictions allowing people to work from home. It also reflects the fact new jobs per se aren’t being created as the hiring activity now underway is filling positions that were vacated as the stay at home orders went into place.
But the bottom line in terms of impact on housing markets in what is referred to the “Outer Bay Area” in places such as Manteca, Tracy, and Lathrop is what the move toward allowing more workers to spend all — or a majority of their work week — working from home will have.
When the average apartment rent is now at $3,788 in San Francisco, $2,985 in San Jose, and $2,451 in Pleasanton is $2,255 based on Rent Jungle surveys the Manteca average rent of $1,721 becomes even more appealing when you eliminate all or most commuting expenses.
While Manteca rents are up 3 percent in the past six months and up just under 8 percent from May of 2019, Rent Jungle reports they have dropped 3.3 percent in Pleasanton and 8.4 percent in Livermore from just 12 months ago.
Even before the pandemic hit, managers of some Manteca complexes were seeing a growing trend of young professionals with jobs in the major urban centers renting here and not just commuting but staying overnight in the Bay Area or driving back on the weekend for social activities and entertainment. The acceleration of working from home means renters instead of commuting five days to the Bay Area for work could end up traveling less to their employment on a regular basis and be able to make trips to the Bay Area for entertainment and end up with more time due to less commuting and more disposable income.
The pandemic has combined with another significant trend — brisk sales of new homes in both Manteca as well as Lathrop — to further pressure rents. While housing growth has always translated into rising prices, many builders in Manteca and Lathrop have enjoyed record — or near record sales — for May and June. And while the resale market took a hit, prices haven’t dropped to any significant degrees.
That means the demand for renting — houses and apartments — have remained brisk throughout the pandemic.
goes up $20 since
the first of the year
The smallest apartment on the Bulletin survey — a 440-square-foot studio unit in Westwood Village on the south side of Center Street west of Union Road — rented for $1,105 in January. Today it rents for $1,125.
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. Tesoro, the newest complex in Manteca with the highest rates across the board — including a one bedroom for $1,750 and a two bedroom for $1,950 — is one of only two of the largest and newest complexes in Manteca not to raise their rents this year.
The average one bedroom apartment in the Bulletin’s survey is renting for $40 more than it did at the start of the year or $1,578. The average two bedroom rent increase so far this year is $40 as well while the average three bedrooms is up $48.
Due to Manteca’s continued growth that is still sending home prices up, the fact Manteca will have 342 new apartments available for rent by early 2021 is not expected to dampen the upward pressure on apartment rents.
There are now 128 apartments under construction near the northeast corner of Lathrop Road and Union Road.
That is in addition to the initial 214 units of the 428-unit Valencia Apartments being built immediately east of Bass Pro Shops along Atherton Drive by developer Mike Atherton and his partners. As soon as the first phase is completed, work will start on 214 more apartments.
Valencia Apartments arguably reflects what may become the default “affordable” housing option for many.
The gated complex would also include the largest concentration of studio apartments ever built in Manteca. The 42 studio apartments would account for a 10th of the overall unit total and would consist of 515 square feet apiece.
The Valencia complex would include 140 one bedroom and one bathroom units with 727 square feet, 222 two bedroom and two bathroom units with 1,040 to 1,105 square feet, and 24 three bedroom and two bathroom units with 1,279 square feet.
It is not by chance that roughly half of the complex has units with two bedrooms and two bathrooms. That was essentially required by lender Wells Fargo as their economists have compiled data that shows they are easiest to rent.
That’s because typical renters are at least two people who are unrelated or not in a relationship per se.
It means the real cost for an individual splitting an apartment with another person to rent a two bedroom and two bathroom a month is $902.50 at Stonegate, $738.50 at Park Place, $910 at Paseo Villas, and $890 at Laurel Glen. That is $580 to $740 less a month — depending upon the complex — for a person to share a two bedroom and two bathroom unit as opposed to renting their own one bedroom apartment.
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