SLO County News BlogGolf, Wine, Real Estate, Business & Travel NewsSLO Rental VacanciesMonday, February 28, 2005More rental openings reduce rents in city of San Luis Obispo. For the first time in years, it's better to be a renter in San Luis Obispo. Landlords, long spoiled in a tight market, have been in the mood to make a deal.Vacancy rates have risen as Cal Poly students moved onto campus and wealthier renters have taken advantage of low-interest rates to buy homes. Some landlords have been left scrambling. "I am renting to people that I might not have before," said Jackie Turner, San Luis Property Management's general manager. She said she's more likely to accept renters with pets or less-than-perfect credit than she was in the past. Mike McNamara, who runs McNamara Real Estate, expects to see other landlords doing a better job of keeping up properties to woo renters. The apartment vacancy rate in the city of San Luis Obispo rose to 5.22 percent in September 2004 -- the most recent month for which figures were available -- from 3.61 percent a year before, according to a survey of property managers by the UCSB Economic Forecast Project. In September 2002, apartment vacancies stood at 1.18 percent, according to the project's report. Now, apartments are said to stay open for months rather than weeks. And, as of September 2004 renters were paying about 5.4 percent less in San Luis Obispo than they did a year before, and 7.1 percent than September 2002. "When people hand me a notice that they are vacating, I have a panic attack," Turner said. Drops in average rents and jumps in vacancy rates haven't been as big in the rest of the county. Landlords there, economists said, simply aren't facing the same pressures as San Luis Obispo. The city is home to an 805-bed on-campus apartment complex that opened 18 months ago, and it has some of the county's priciest homes. Students quickly rented rooms in the new Cal Poly project. Neighborhood groups long begged Cal Poly to build more campus housing, arguing that families and students should be separated. But that wish, when granted, hit local landlords. "What you are looking at is one big supply shock," said Larry Souza, chief economist for the California Apartment Association. "The good news is it didn't drive the vacancy rates up to 8 percent." Vacancy rates in the 5 percent range are generally a sign of a stable, healthy rental market, according to the UCSB economic report. "For rent" signs aren't just staying up longer on cheap student housing, either. More expensive apartments are being passed over as well. Higher-income renters are borrowing from friends and family to buy into the county's sky-rocketing housing market, according to Dan Hamilton, UC Santa Barbara director of economics. "The rental market has been soft relative to housing," he said, "because interest rates are so low. People on the high end are scraping together money to get into a condo." For landlords, fewer renters means changes to the way they do business. "I think you'll see existing owners keeping things up more because it is just more competitive," McNamara said. "It is a good thing, in a way," Turner said. "It is good for renters. And it is good for owners to keep their property up." The best part for renters, she said, could be the deals they can get right now. An apartment that would have rented at an average $975 a month in September 2003 could be rented for an average of $923 a month as of September 2004. "Places that used to go for over $1,000 are now going for under," Turner said. "Even with lower prices, things are staying on the market longer than they used to." While McNamara said he's always advertised open vacancies in the spring -- rather than waiting until students return to town at the end of the summer -- he expects more landlords to follow suit this year. "I think in the past landlords were very spoiled," McNamara said. "You always had your leases end in the summer and you didn't really do any marketing. You would put up a sign and be inundated with calls." Both said they are responding more quickly to residents' concerns, too. "We are very nice," Turner said. "We just have to be a little more accommodating." With 2,700 more dorm rooms set to open at Cal Poly by 2008, economist Souza said the pressure on landlords won't ease up. "If everything hits in 2008, you are going to look at vacancy rates declining over the next few months," he said, "but as those come on line, you'll see the rate spike up again." Vacancy rates aid renters' search The Tribune, Leslie Griffy To see more of The Tribune, or to subscribe to the newspaper, go to www.sanluisobispo.com. (c) 2005, The Tribune, San Luis Obispo, Calif. Distributed by Knight Ridder/Tribune Business News. Read More
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