Not to sound daunting, but good luck finding an apartment in Bakersfield these days.
A new survey of local rental units found that the city’s vacancy rate fell below 1.5 percent this spring, a level that has not been reached, if at all, in decades.
It’s so bad that a man looking for an apartment in town for his family recently offered agent and manager Scott Knoeb a $ 1,000 finder’s fee.
“I couldn’t do it,” said Knoeb: Nothing was available.
There have been concerns that the moratorium in place during the pandemic would distort the market as people who cannot pay rent remain. But Knoeb said that was not his experience.
Typically 10 to 12 percent of tenants don’t pay rent on time. He said it’s still in that area: “It’s just not a huge percentage.”
One reason for the tense conditions, according to people in the industry, is that renters priced out of other markets find Bakersfield cheaper, especially if they can work remotely.
The lack of new builds also contributes as it is difficult for property developers to make money from navigation, which they see as burdensome regulatory requirements.
A senior local market observer who shared the results of the rental survey, ASU Commercial’s multi-family home agent Marc Thurston, said the situation may be unprecedented. Never in 30 years has he seen jobs this low across town.
His data shows that the city’s vacancy rate was 3.28 percent in the fourth quarter of last year. It fell to 2.65 percent in the first quarter, Thurston reported. In the second quarter it then fell to 1.56 percent: good for landlords, not for tenants.
In the eastern part of the city, there were practically no vacancies in apartments of any size, according to ASU.
The only units that saw a rise of more than 2 percent – and there were no segments of the market where vacancies rose to 5 percent – were one-bedroom apartments in South Bakersfield and one-bedroom apartments in central Bakersfield .
Another sign of strong rental demand that ASU has reported is a gradual decline in landlords offering concessions to tenants. The number of apartments that offer discounted rents or reduced fees, for example, fell by two-thirds to six properties between the fourth quarter of last year and the second quarter of this year.
At the same time, the number of landlords charging utility companies rose 83 percent to 22 percent, ASU reported.
It’s becoming increasingly clear that more people are moving from the Los Angeles Basin to the southern Central Valley. Knoeb said he saw many 213 area codes on his phone, along with other Southern California area codes he’d learned.
He received two to three applications for every available apartment. That changed about a month after California’s stay-at-home order on March 19th. He said it’s now closer to nine to ten for anything between $ 775 and $ 2,500 a month and his new line is, “Sorry, it’s already rented.”
Ian Sharples, director of public affairs at Core Trading Group’s Income Property Association, said the crisis wasn’t just due to people fleeing more expensive markets or even natural population growth, although both are important factors.
“There are also many more people who are finding economic opportunities in the valley,” he said. “I’ve noticed that people come here to start businesses too.”
Follow John Cox on Twitter: @TheThirdGraf.