Most property owners in the Mother Lode are holding steady on rental rates — for now.
With one in every 322 Tuolumne County homes and one in every 157 Calaveras County homes in foreclosure, the housing market is having ripple effects on rental properties. It’s a complex relationship that is seeing rental homes and apartments become more popular as single-family dwellings are vacated due to foreclosures.
“It’s a better time to be a landlord right now,” said Carol Griggs of Frontier Property Management, which manages 250 rental homes in Tuolumne and Calaveras counties.
She said that, while the total number of rental properties on the market hasn’t changed much in the past several years, their composition has changed drastically.
Before the housing market collapsed, most of the demand for rental properties was for more affordable small homes and multi-family dwellings. Today, however, rents are holding steady for lower- and medium-priced homes, while high-quality single-family homes for rent are becoming scarce, Griggs said.
Lease agreements are becoming more expensive in many cases for higher-end home renters who can afford to pay $1,100 to $2,500 a month, she said.
The market, I would say, is a bit stronger for well-maintained houses,” according to Tracy Prevost, President of Mother Lode Property Management.
She said that more expensive rental homes in upscale neighborhoods are a hot commodity with many families who could afford to buy a home, but are waiting for market prices and financing to become more advantageous.
Apartment complexes, too, are seeing growing demand in recent months.
Bruce Patrick, owner of Quail Hollow Apartments in Sonora, has seen his business improve this year, with 80 percent of rental deposits received by this month when compared to all of last year.
“It’s a two-way street right now. It’s not quite a lease-holder’s market, but it’s going that direction,” he said.
Quail Hollow rents have remained the same for the past four years, and Patrick said he has no plans to raise them anytime soon. He said that a decline in the apartment rental market in 2008 corresponded more closely with job losses than with foreclosures.
The rental market is a microcosm of the economy as a whole and as rental properties begin to rebound, so too will other businesses, Patrick said. The turnaround in the Mother Lode will come with rising employment from new hires at the Standard Mill, Big Lots, Jo-Anne Fabrics and PetSmart.
“The housing market right now is really kind of a mess,” said Julie Anway, who manages the 49-unit Altaville Apartments in Angels Camp.
She said the complex has a 3-year waiting list for applicants, and the low-income apartments generally don’t cater to people who have recently owned a foreclosed home. Those people generally prefer to rent another home rather than move to an apartment.
Anway said Altaville is in the process of raising rents on units that range in price from $484 to $744 a month. Landlords in California have to file a 60-day notice if they plan to raise rents above 10 percent.
Harvard University’s Joint Center for Housing Studies reported last month that Americans at all economic levels are paying a higher percentage of their income for housing because of the rising cost of owning a home.
The report said households making from $45,000 to $60,000 faced drastic housing cost increases in the past several years, and that 19 million households paid more than half of their income for housing in 2009. More than 10 million of those were renters.
“We’re not back to where we want to be, but we’re getting there,” Patrick said.