Rent increases in valley
Rates remain lower than state average
Here's the latest data on the Coachella Valley from research firm RealFacts, covering average asking rents in the second quarter of 2006. The year-over-year change is in parentheses.
The Desert Sun
July 21, 2006
"But then again, my son makes a whole lot more than I do," added Strickland, a self-employed custom-tile contractor who has lived in cities throughout the Coachella Valley over the past four decades.
Continuing a trend of the past several months, valley rents increased 3.5 percent over their year-ago levels in the second quarter of 2006, with the local average rent and rates of increase coming in lower than those for Riverside County, Southern California and the state as a whole.
According to a quarterly sampling survey by Novato research firm RealFacts, the valley's average asking rent of $937 was lower than the county's $1,099 (up 5.6 percent), the Southland's $1,377 (up 5.8 percent) and California's $1,311 (up 5.6 percent).
RealFacts president and owner Caroline Latham said several facts explain the valley's relative slow growth in rents compared with other communities around the state, even as local apartment occupancies remain at a steady average of 96.1 percent.
One is that the valley market in the last few years has been geared to single-family homes and condominiums for purchase - especially as local prices have remained lower than in other cities and interest rates, until recently, have kept monthly payments competitive with rental costs.
Also, since not a large number of apartments have been added in the valley - or shown up in the quarterly sampling by RealFacts - the stock of apartments tends to be older than in some larger communities. Newer apartments generally raise rent price averages in most cities.
Latham said there is so far little evidence that rising fuel costs or interest rates are prompting apartment owners to raise rates significantly. She noted building owners in the inland Riverside-San Bernardino county region have already adjusted for those added costs over the past three years via rent increases.
Harder to gauge is the impact on rents from a recent increase in condos being converted to apartments, as well as for-sale resale homes being offered up as rentals. Latham noted those units generally don't enter the market at the same time and are not counted in RealFacts' surveys.
But But she said trends in other communities suggest that as homes bought in mass quantities by real estate speculators stay on the market - and their owners get antsy about rising interest rates - the valley climate could move further in favor of renters. Those owners will be looking for tenants to temporarily offset their losses - or at least minimize the impact of rising house payments.
"It might be a good time to approach one of these nervous owners and maybe get a good rental rate on a house or condo," Latham said.
RealFacts' quarterly sampling of apartment rates in several Western states included 25 valley apartment complexes with a total of 5,523 units.
While the valley remains a rental bargain compared with other communities, that's little comfort to 18-year-olds Kelsey Darr and her fiancÚ Chris Goodman.
Since they became engaged a few months ago, the Cathedral City residents have had a tough time finding the right apartment to serve as their first home together while fitting their budgets.
"It's really hard to find decent places and they're really expensive - you can't find much under $800," said Darr. "We're going to look around Desert Hot Springs; I hear the prices are not too bad there."