Rents Fairly Stable, Survey Finds
Although the cost of buying a home has continued to soar during the last year, renting an apartment remained a relative bargain throughout the West’s major markets, according to a report to be released today.
As of Sept. 30, apartment rents had either declined slightly or increased by less than 4% during the last year in 16 of the West’s 20 largest markets surveyed by RealFacts Inc., a research firm based in Novato, Calif.
Even the hottest rental markets -- Southern California and southern Nevada -- looked mild compared with the rising sales price of homes. For instance, apartments in major complexes in Los Angeles and Orange counties rented for a monthly average of $1,441, the highest of any market covered by RealFacts. That represented a 6.3% increase from the region’s average apartment rent a year ago.
In contrast, the median price of a home in Los Angeles County was $494,000 in September, a 21% increase from a year earlier, according to DataQuick Information Systems, another real estate research firm.
In Orange County, the median home price was $610,000 in September, a 14% increase from last year, DataQuick said.
The situation is similar in the Las Vegas metropolitan market, where the average apartment rent last month stood at $813, a 6.1% increase from last year. Through June, the median home price in the Las Vegas market had increased by 27%, according to federal mortgage regulators.
The only other major markets in the West where apartment rents have increased by more than 4% were both in Southern California: In Riverside and San Bernardino counties, the average rent increased 6% to $1,061.
The only markets where apartment rents fell were Colorado Springs, Colo., down 2.2% to $710, and Tucson, down 0.3% to $617, the lowest rent among the markets surveyed by RealFacts.
Although buying a home has been a lot more expensive than renting recently, homeowners have been enjoying substantial gains -- on paper at least -- on their investments.
Many economists are convinced that that trend will change as interest rates increase, squeezing homeowners with adjustable-rate mortgages and eventually causing housing prices to decline as demand dries up.
If that happens, “some people could look really smart for having remained renters,” said Chris Bates, a RealFacts spokesman.
