Stockton Rental Market - How much do apartments rent for today!
Stockton, CA Rental Market – From the Tenants Perspective.
About 9 months ago I did a little "market research" because I was bringing a few new units in Stockton online. This week I had another one come up and since I needed to "research" rents and I figured I'd share my findings here on BP.
This is the very "scientific" method I used: I went on Craigslist and plowed though the listings, in ascending price order. Kidding aside, I do feel this gives a pretty good idea of what the prospective tenant will see when looking for a place to live.
*If you like this please click VOTE so I know I don't write this for myself...:)*
Under $650 - Nothing at all. Maybe a Room or a 55+ Studio.
With few exceptions the only way to sleep under a roof for under $650 is to rent a room from someone.
$650 to $750 – Studios and Questionable 1 Bedrooms
Less desirable downtown stuff. Studios and 1 bedrooms in undesirable apartment complexes.
$750 -> - 1 Bedrooms
Over $750 one bedroom units become available. Most of these are in apartment complexes. To my amazement these one bedrooms go all the way up $1000+! These are units in nicer communities of course, but still; $1000 for a 1 bedroom in Stockton? Crazy!
$$800 -> - Still Mostly 1 Bedroom Territory, but some 2 Beds
Over $800 is where you start to see a few undesirable two bedrooms (downtown rundown buildings etc). Still a *lot* of 1 bedrooms though! Just like the last time I checked I was astounded by how few 2 bedrooms 1 baths there were available at this price!
$900 to $1000 – Solid 2 Bedroom 1 Bath Territory
This is where most of the conforming 2 bedroom / 1 baths units are priced at today. Again it surprised me how many of these were in apartment complexes and how little were available in duplex/triplexes!
$1050 to $1300 -> 2 to 3 Bedroom 2 Bathroom’s.
This is where 2/2 and 3/2 units are renting for now. Most of these start around $1100 and we are not even talking units in very desirable areas...
$1300 and up Houses and Everything Else
This is where I stop my analyses because I don't rent in that segment but again, it surprised me how many 2 bedrooms and even 1 bedrooms there still were in this segment…
My Conclusion
The Stockton market is as hot as a cast iron skillet with sizzling fajitas! Unfortunately the purchase prices for rentals are outpacing the rent growth:(. The high purchase prices probably have a lot to do with the hight rents being charged on new units coming on the market. If you just paid $275K for a duplex you simply can not afford to rent the units out for $850 a pop...
Despite the high prices there seems to be little supply available in my market segment(2/1's to 3/2's). Most of my current tenants would probably not income qualify for for a lot of these units. My theory is that the tenants that are currently moving in at the higher prices are refugees from the (even higher priced!) Bay Area rental market. I have several newer tenants that fall into this category. Imagine commuting to Oakland from Stockton every day:(...
General Observations about ads on Craigslist.
First of all; Craigslist's "housing" section is starting to get more and more polluted/spammed by "Rent-to-own" operators. You can basically disregard all ads that have text on the picture and sound to good to be true.
For those of you not familiar with the rent-to-own model: An operator has tenants pay a few thousand dollars worth of "option fee" for the right to buy it in the future at a certain price. However, ninety percent of the R2O tenants will drop out for various reasons. The operator then keeps the option fee and repeats the process wit ha new R2O renter. Basically just like those buy-here-pay-here car lots... For obvious reasons they are very heavy on the marketing...
Second observation: What makes the independently owned inventory even harder to find is the fact that apartment complexes SPAM the living F* out of craigslist, so you need to scroll down many pages to even find a few unique listings.
In between all this spam it becomes harder for tenants to use Craigslist to find a place to live. Fortunately my property management software also syndicates my listings to Trulia and Zillow etc.:) I might use one of these websites for my next round of "research" instead...
Anyway, that was long as usual, but I hope this was of some help to you. If it was, please click on the VOTE button, so I know I am not just doing this to exercise my fingertips.:).
Also, feel very welcome to comment what you are renting your units for in Stockton, so we can all compare notes:)...