What's Happening in the Rental Market

What is happening in the rental market?

By Lawnae Hunter

In 2006, our rental market has softened due to the influx of available properties.  Sellers who have been unable to sell their properties have turned them into rentals, flooding the market. 

Vacancies have risen, forcing rental values down approximately $100 to $200 per month on the higher end properties and $100 to $150 on medium priced properties.  Lower end rental prices are fairly stable.

For example, a four bedroom, two bath tract home may currently rent for $1,400 to $1,500; a three bedroom, two bath track home may rent for $1,300 to $1,400; and a two bedroom, two bath may rent for $1,000 to $1,200.

The rental market still tends to be seasonal.  Summer months are the peak season; employment levels are at the high point, and personnel stationed at Vandenberg tend to move their families to the area in the summer. 

Vacancy rates will vary with the winter months, indicating a slow down in the market in general.

 As the real estate market exploded during the previous five years, investors purchased property to gain appreciation or equity.  This created an abundance of rental inventory.

Today the investor purchasers have receded, but yes, there are still investment opportunities…though it is not the booming market of recent years.

The market is supply driven.  The Central Coast still offers a very desirable lifestyle and  rents will eventually rise again.  That cannot be expected until the housing market stabilizes.  How long the current market will last remains to be seen.