Inland Empire Leads Southland Rent Increases
The Inland Empire has long been the realm of more affordable rents. That might not be the case for long.
The region experienced a 6.2% surge in average monthly apartment rents in the first quarter, compared with the same time last year. It was the biggest increase of 25 markets in 11 Western states, according to RealFacts, a Novato, Calif.-based firm that routinely surveys rents at complexes with 100 or more units.
The average cost to live in an apartment in the San Bernardino-Riverside area was $961 a month for the first three months ended March 31, RealFacts found.
The Inland Empire led a pack of Southern California regions that held four of the five top spots on the list of greatest year-over-year increases in the mostly higher-end rental market. San Diego experienced a 4% increase to $1,187, Los Angeles rose 3.9% to $1,355, and Orange County was up 3.2% to $1,284.
The Inland Empire has been a lure for many Southern California renters in search of a greater selection of residential spaces at affordable prices.
But recent rent increases at Mission Grove Park -- a posh, amenities-loaded 432-unit complex in Riverside -- may be a sign of what the region can expect in coming years.
A three-bedroom apartment rents for $1,895 a month, an increase of $275 from last summer, and 11 of the 12 units are occupied, said business manager Sonia Quintana.
People moving from neighboring counties to the Inland Empire “has been a trend for the last two or three years,” said Quintana, who used to manage a property in Rancho Santa Margarita. Her complex is getting a more upscale clientele.
The inflow of renters to the Inland Empire has pushed up the region’s occupancy rate to 95.3%, the highest of any of the 25 Western locales surveyed.
Meanwhile, the Northern California cities of Oakland, San Jose and San Francisco saw some of the biggest declines during the first quarter compared with a year ago.
“Basically the two regions ... have two different economic drivers,” said William Ktsanes, director of research and analysis for RealFacts. “There’s been a lag in recovery in the tech industry. Generally, the economy is healthier in the south.”
Rents increased dramatically in San Jose in the late 1990s, said Debra Carlton, executive vice president of legislative affairs at the California Apartment Assn. The prices, which artificially inflated as competition for the units surged during the dot-com boom, had nowhere to go but down.
San Jose saw the biggest year-over-year decline in rent -- a 5.4% drop to $1,278. The occupancy rate was 93.5%, a drop of 0.7% from a year ago.
In Oakland, rents dropped 2.4% to $1,178. San Francisco’s rental prices fell 1.6% to $1,538.
“San Francisco has had high vacancy rates” concentrated in the high-end apartments, said Carlton. But in the lower and moderate price apartment complexes, “there’s not enough of those to go around.”
California remains home to the most expensive apartments in the West. The top eight most expensive markets included in the data are all in California.
Despite the high rents, filling apartments in these locales hasn’t been a problem. In the eight California markets, occupancy rates ranged from 92% to 96%.
RealFacts surveyed 3,625 properties housing 746,405 units.
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Different directions
Apartment rents are increasing in Southern California areas, but in Northern California, rents have declined.
Average monthly rent in the first quarter (percentage change from a year earlier)
Los Angeles County: $1,355 (+3.9%)
Orange County: 1,284 (+3.2%)
San Diego area: 1,187 (+4.0%)
Northern California: 1,142 (-2.1%)
Inland Empire: 961 (+6.3%)
Based on a survey of complexes with 100 or more units
Source: RealFacts
