Rental Homes in High Demand.
In the past month, it seems as if there hasn’t been a day that has gone by where I haven’t seen a flock of emails in my inbox from agents or clients urgently looking for homes — not to buy, but to rent. And not just in San Carlos, but up and down the Peninsula. Everything from 2-bedroom houses all the way up to executive homes, rental homes are at a premium right now. That’s good news if you’re a landlord, but a bit daunting if you’re one of those people just trying to get a roof over your head.
Unlike home sales, tracking the metrics on rental properties is difficult at best. That’s because the vast majority of rental agreements take place directly between the landlord and the tenant, bypassing Realtors and the multiple listing service (MLS). And this makes sense, because I don’t believe Realtors add much value to the process of renting a property unless you need help with managing the property too. With boilerplate rental agreements readily available on the internet, a landlord simply needs to place a free ad on craigslist, and then prepare for the flood of 50 or so phone calls within the first 5 minutes.
So while I can’t show you those nifty charts and graphs that calculate the exact uptick in rental demand, this phenomenon is being confirmed by many other agents, as well as would-be renters who are in the thick of the battle right now. What’s happening to cause this?
Where are the Renters Coming From?
There are a couple of possible sources behind the surge in renters, and they’re interesting because they come from completely opposite directions.
- Distressed Homeowners: Whether it’s because of divorce, loss of job, or health reasons, there’s still a significant pool of people in the Bay Area for whom remaining a homeowner will not be an option for much longer. As they leave the home owner ranks in droves, many will still need a roof over their head in this area.
- Job Relocation. Social media companies in this area, both established and start-ups, seem to be on a hiring tear right now. The competition for talent in this very specialized field has forced them to look nationally and internationally. Consequently, there seems to be a BIG increase in people needing to relocate to the peninsula on fairly short notice. Some of these will be long-term renters, others just temporarily until they can sell their existing homes where they just came from. Even if they’re getting assistance from a corporate relocation company, they usually need to sell their existing home first before they can pop for a new one here. Alain Pinel Realtors has a dedicated relocation department, and they’ve experienced record levels of relocations over the past few months.
Prices Likely to Rise.
Unlike the interesting paradox that we’re seeing with home sales prices, rental prices will very likely rise with the increased demand. If you’re currently in the hunt for a rental home, I’d be very interested to hear your experiences – is there indeed lots of competition? What is the inventory like? Are prices indeed rising? Let us know in the comments.
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