Steve Golis, Partner at Radius Commercial Real Estate & Investments, reports on rental rates in the South Coast in 2017.
At the 9th Annual Radius Real Estate & Economic forecast in October 2016, Steve Golis, Principal at Radius Commercial Real Estate & Investments, reported that while some areas in the South Coast saw an increase in rents during 2016, most areas were projected to show only moderate increases by the end of the year, and he predicted moderate to normal 2 – 3% increase in rents during 2017.
In fact, as 2017 unfolds, we are seeing rents level a bit. Property managers in Santa Barbara are lowering rents or offer rental incentives and/or move-in specials which are usually unheard of in Santa Barbara. Karen Quinn, Property Supervisor with the Meridian Group, has reduced the monthly rent on over eight properties with some that include $500 off the first month’s rent and one that advertises “First Month Free” if occupied by April 1, 2017.
“We don’t usually have to offer these kinds of incentives in Santa Barbara, but because of the available inventory, we are seeing more competition with renters and have to be more aggressive in order to get our properties filled,” Ms. Quinn stated.
Bartlein and Company reports a substantial softening of the market leading them to lowering rents on several properties. In comparing one property from last year to the current year, one bedroom apartments are $100 less per month this year than in 2016. If this continues, and applied to all units in this example, it could mean a loss of almost $15,000 a year for the property owner. In addition, Bartlein has over 30 units currently available – a 50% increase in available units from this same time last year.
Although her management company has not begun to drop rates, Danielle Holzer of DMH Properties said her company is offering move-in incentives to attract tenants and she has seen an influx of new people coming into Santa Barbara with good jobs and looking for rental housing.
These reports indicate that Santa Barbara is seeing rental rate peak or at least flatten which will be welcome news to tenants.
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