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Category: Articles » Finance » Real Estate » Article » Article Code

California Renters Squeezed by Lack of Affordable Rentals

You don¡¯t have to read several media sources to notice that there are two growing trends affecting the leasing and rental market. More and more renters are searching for their next apartment online as opposed to traditional methods and rental prices are rising as consumers choose to rent rather than buy in order to wait for home sale prices to improve in affordability-- as is clearly evident in California where the median sales price of a home is at $560, 690. Across the nation, the median sales price of a home is at $248,000. ... read more

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You don¡¯t have to read several media sources to notice that there are two 
 
growing trends affecting the leasing and rental market. More and more renters 
 
are searching for their next apartment online as opposed to traditional methods 
 
and rental prices are rising as consumers choose to rent rather than buy in 
 
order to wait for home sale prices to improve in affordability-- as is clearly 
 
evident in California where the median sales price of a home is at $560, 690. 
 
Across the nation, the median sales price of a home is at $248,000.

According to Apartments.com, the company reported nearly 45 million visits in 
 
2006, an increase of 20 percent over 2005. The top searched markets on the site 
 
with the highest growth over 2005 were :

1. Chicago (214%)

2. Los Angeles (203%)

3. Phoenix (182%)

4. Ft. Lauderdale (168%)

5. Atlanta (163%)

6. Detroit (158%)

7. New York (157%)

8. Tampa (156%)

9. Orlando (153%)

10. San Jose / Silicon Valley (144%)

Note that Los Angeles and San Jose, which are cities located in California, 
 
show a booming increase in online searchers looking for affordable rental 
 
housing.
 
Unfortunately for many renters, as reported in a 2/4/07 online article in USA 
 
Today, landlords are expected to raise apartment rents for a third-straight 
 
year in 2007. By no means are we attempting to take pot-shots at landlords, the 
 
objective is to give the perspective of how national rental rates compare to 
 
those in California.

¡°With the projected rise of 5% this year, rents would be 14% higher than at 
 
the end of 2004, the report says. From 2000 to 2004, most landlords couldn't 
 
raise rents because so many tenants were leaving to buy houses or condos. To 
 
feed that buying frenzy, about 300,000 apartments were converted to condos for 
 
sale in the past three years. Now, even with 92,000 new rental units this year, 
 
the stock is still too little to meet rising demand.

Rents are rising because the payment gap between renting and owning remains 
 
wide. Even with this year's increase, the national median rent will be $943 a 
 
month, only 60% of the median mortgage payment of $1,566.¡± In California, the 
 
median rent is at approximately $1,400 per month which is 47% of the median 
 
mortgage payment of $2,520.

And data from a Census Bureau report in 2000, showed that the highest rental 
 
markets were in Irvine, Sunnyvale, Santa Clara or Fremont, all California 
 
cities, where median gross rents all topped $1,200 a month. That was six years 
 
ago.

California cities claimed nine out-of-ten spots on the Census 2000's list of 
 
highest rents among large U.S. cities. The only non- California city in the top 
 
high-rent tier was Stamford, Connecticut, at $1,007 a month.

Ten Highest Rent Cities

Irvine, Calif. - $1,272
 
Sunnyvale, Calif. - $1,270
 
Santa Clara, Calif. - $1,238
 
Fremont, Calif. - $1,196
 
Thousand Oaks, Calif. - $1,131
 
San Jose, Calif. - $1,123
 
Daly City, Calif. - $1,074
 
Simi Valley, Calif. - $1,058
 
Stamford, Conn. - $1,007
 
Huntington Beach, Calif. - $ 985

Keep in mind that Southern California is a sprawling geographic area dotted 
 
with several hundred communities, it would be ridiculous to claim that there 
 
are no affordable rental areas; however, as a renter you can realistically 
 
expect to pay higher rents in more desirable neighborhoods or communities 
 
located by the coast. In order to get a good perspective on rental prices and 
 
desirable areas to live in, conduct a few online searches and check out sites 
 
such as Realtor.com, Apartments,com and Rent.com.

If living in the ¡°Golden State¡± is your dream, there are now more online 
 
rental websites available with virtual tours, mapping tools and other 
 
information, so you can shop for a California rental from your desktop.

Author Bio:

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