Bad News for Renters

Monday, June 30, 2008
Matthew Wrye
San Bernadino Sun

Rental prices for single-family homes keep climbing in the Inland Empire, and depending on the unit's size, landlords are lifting rents higher than the rate of inflation.

But the spike over the last six months wasn't as huge as some experts anticipated.

With a glut of homeowners becoming delinquent on their mortgages in early 2008, some property managers said troubled lenders would foreclose immediately, forcing ex-homeowners to frantically search for rentals to live in, driving up demand and prices for rentals.

"I thought rates were going to skyrocket," said Steve Thomas, co-owner of Rancho Cucamonga-based CIG Property Management and Investment, which manages properties throughout the two-county region. "As I get calls from tenants, I think I know why they're not."

One reason: Some of those delinquent homeowners are moving into apartments while renting out their homes, thus pouring rentals into the market.

"It's putting properties that would not necessarily be on the market, on the market," Thomas said.

But he doesn't expect it to last long. Many of those delinquent landlords will eventually end up in foreclosure, and banks will pull those properties from the rental market.

"I think it's going to bump up next year," Thomas said about home rental rates.

Apartment rates, on the other hand, are steadily rising in San Bernardino County every year, but they dropped on studios and some two-bedroom and three-bedroom

units in Riverside County from March 2007 to March 2008.

On average, apartment rates rose 18.5 percent in San Bernardino County from 2004 to 2008, and 16.2 percent in Riverside County during the same period, according to Novato-based apartment data company RealFacts.

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