HESPERIA - As apartment rental costs continue to rise across many portions of California, rates in the High Desert have remained relatively low - until now.
The local market is experiencing substantial increases in rental costs for apartments and single-family homes due to low vacancy rates, according to Ron Barbieri of Coldwell Banker Commercial Real Estate Solutions of Victorville.
"The relatively rapid increase in residential rent levels over the last six months indicates the excess vacancy has finally been absorbed," said Barbieri, who took to LinkedIn to report the increase in rent levels is due to the "acceleration of household formations," which is primarily attributed to the increase in household incomes.
"Over the last year, real wages have started to increase as the employment growth in the Inland Empire, which has averaged 50,000 per year over the last four years, has replaced all the jobs lost during the Great Recession and created jobs for the new entrants into the labor force," Barbieri said.
The absorption of the excess vacancies had to occur before significant increases in the level of residential construction could take place in the High Desert region, said Barbieri, who shared that investors and property managers could have raised rents slightly after the summer of 2015, but waited until "the summer of 2016."
Benton Lamson, founder of Bluestar Properties, told the Daily Press the average price of a two-bedroom apartment in the High Desert is $795, with monthly rates going up anywhere from 10 to 15 percent over the last few months.
"If there's a vacancy, the owner will probably use that time to raise the rate," said Lamson, who explained how the high cost of water, utility bills and building maintenance is the reason for most price increases.
Lamson said property owners "eat 100 percent of all rate increases" until they can pass a portion of it onto renters.
Miguel Ramos, who lives in Hesperia, told the Daily Press his monthly apartment rate has increased by $50 over the last two years.
"My landlord told me they had to raise my rates because costs were going up," Ramos, 29, said. "The cost of everything is going up so I don't blame them. It just hurts to pay an extra $600 a year."
Coldwell Banker Commercial Victorville Vice President Bob Basen recently told the Daily Press "affordable housing, a very limited inventory, building restrictions and no new development" in the High Desert also creates a supply and demand situation for available rentals.
Basen said the completion of the Cajon Pass Rehabilitation and Devore Interchange projects last year have made the commute between the High Desert and down the hill easier, which is attracting more new residents to the High Desert.
Hesperia Mayor Paul Russ told the Daily Press 2017 will see the construction of several apartment developments in the city in order to meet demand.
"Based on what we're seeing, rental prices will continue to increase by 5 to 7 percent moving forward," Lamson said. "We have the demand, but our local cities need to work on that supply."
Rene Ray De La Cruz may be reached at 760-951-6227, RDeLa Cruz@VVDailyPress.com or on Twitter @DP_ReneDeLaCruz.