While homeowners were being stung by shrinking property values, renters across the state found themselves having to dig deeper into their pocketbooks in the third quarter, according to a report to be released today.
The average rent at larger apartment complexes in California increased 5.6% to $1,413 compared with a year earlier, according to a survey by Novato, Calif.-based research firm RealFacts.
Los Angeles and Orange counties remained the state's most expensive market for rentals, while the San Francisco Bay Area posted the highest rent increases -- as high as 12.2% in Santa Clara County.
In the Inland Empire, which has suffered the worst of the housing market meltdown, renters caught a relative break as landlords raised rents at half the pace found in neighboring counties.
Although rents rose across the Southland, some analysts said they had been expecting to see even higher prices given the housing market meltdown, which turns many potential home buyers into renters.
"The supply and demand for the housing market are interrelated with the supply and demand of the apartment market," said Delores Conway, director of USC's Casden Real Estate Economics Forecast. Now, with tougher lending standards and a shaky housing market, "more people are choosing to rent rather than to buy."
Nick Galvan, who heads the real estate and property management division at Westside Rentals, a Santa Monica-based listings service, said he had already seen higher demand lately for the 500 rental units he manages in Los Angeles County.
"You can ask for whatever you want as far as price is considered," Galvan said. "It only takes that one person and that one person just seems to be a little more frequent right now."
In Los Angeles and Orange counties, the average rent rose 5.2% to $1,630 compared with a year earlier, said RealFacts, which surveyed 12,048 apartment complexes of 100 or more units in 15 states. Its data are considered a reasonable gauge of rental market trends.
Meanwhile, the occupancy rate in the two counties slipped 0.8 of a percentage point to 95.6%. A complex with an occupancy rate of more than 95% generally is considered fully occupied.
Ventura and San Diego counties also posted rent increases of 5% or more.
In the Inland Empire, rents rose more slowly. Average rents in San Bernardino and Riverside counties recorded the weakest percentage growth in the Southland, increasing 2.7% to $1,159. Occupancy also was down, at 2.3 percentage points lower than at this time last year.
