Rents for apartments in Oakland soaring, chance to buy instead
Rents for apartment units in Oakland have been soaring in recent years, according to East Bay Express. With many buildings charging higher monthly rent prices to tenants, more people who are relocating to Oakland area are considering buying instead. This is a good time and opportunity for potential new homeowners to check out the houses for sale in Oakland.
Rent prices in the city are still considered relatively affordable compared to nearby San Francisco, which boasts the highest rental rates in the country, according to The Huffington Post. The nearby Bay Area neighbor features an average rent on a two-bedroom property of $1,905 per month. However, these high rental figures in San Francisco have created a spillover effect into Oakland, where demand has increased and the supply of available and affordable apartments continues to diminish.
According to the news source, the average asking rent for an apartment unit in a building with at least 50 units in Oakland was $1,925, representing a 19 percent increase from the same period the previous year. Overall, rent prices in Oakland increased by 11.2 percent in 2012 compared to the previous year. That meant that Oakland and San Francisco represented the two American cities that saw the biggest increase in average rent prices.
"In the third quarter of 2012, Oakland had rent growth of 6.7 percent, third highest in the country after San Jose and San Francisco," Paul Donahue, managing director of mortgage banking group Centerline, told GlobeSt.com. "Over the last two years it has consistently been a top performing market - and notwithstanding substantial new supply in the larger Bay Area the vacancy rate is below 3 percent, bolstered by robust job growth in the region."
There have been efforts to keep rental prices in Oakland at a reasonable level. A recent rent control ordinance allows landlords to increase rent by 3 percent one time a year. Additionally, when a tenant moves out, the landlord may choose to raise the rent by 3 percent or to the market rate. However, the news source reports that many buildings are exempt from these rent control policies. To that end, families relocating to Oakland might find they are better off buying and paying off a mortgage instead of renting.