Bakersfield rent hikes in the last three months of 2019 tripled the national average, a new report from software firm RealPage Inc revealed.
That report calculated Bakersfield rent hikes during that period amounted to 7.5 percent as compared to the national average of 2.8 percent. The Bakersfield numbers seem to result from an excess of demand. However, new legislation taking effect this year also impacts the market.
Rent control measures took effect on January 1. Those laws prohibit rent hikes greater than 5 percent per year in addition to cost of living raises. In anticipation, many rental property owners likely raised the cost of renting their units to prepare.
In conjunction with the tight apartment market in Bakersfield, the increase made by property owners surged rental costs across the city.
However, the tight market attracts builders to the area. Several large projects are slated to put hundreds of new apartments on the market. Fuller Apartment Homes plans to build a 312-unit complex southeast of Stockdale Highway and Heath Road. Additionally, Sage Equities plans to begin a 53-unit upscale townhome project before summer arrives.
Home Sales Stagnant Despite Rent Hikes
Counter to the trend in rent prices, home sales decreased. Supply and demand were both down as homeowners seem disinclined to list their houses.
While that trend normally influences prices by lifting them, they remain steady with an annualized appreciating rate of 5 percent. One factor may be the strong construction market, taking buyers away from the existing homes market.
Though, the rent hikes may also suggest many people can’t afford to buy a home right now. People moving into Bakersfield exceed those leaving, and many of them seek rented apartments. Without the funds to buy, the housing market swells with renters.
Conditions in the rental market remain tense, but rent control measures should provide relief in the long-run for California’s massive renting population.