It sounds too good, but there may be some truth to a new report that it might be cheaper these days to rent a two-bedroom apartment in Bakersfield than to rent a one-bedroom apartment.
Using proprietary data and a weighted average, apartment research website Rent.com said the recent trend for residents of large cities to move to cheaper areas has created an imbalanced demand on dozens of U.S. markets – and locally, two-bedroom units costing $ 149 less in July than just one.
Bakersfield rental market professionals don’t see it. But they agree with recent data showing that the price differentials between local one- and two-bedroom apartments are small to insignificant in parts of the city, and that upgrading may make sense.
Surprising as the website’s claims are, the underlying numbers and methodology put Bakersfield on yet another Top 10 list – No.9, two spots ahead of Fresno – in a measure that sheds new light on a housing market. local going through an extraordinary surge in demand.
If the question is whether the demand for one-bedroom units exceeds the demand for two-bedroom apartments, it is, said residential manager and investor Frank St. Clair, “and that is why there is probably has a lesser difference “lately between one-bedroom apartments and two-bedroom apartments.
But he scoffed at the idea that tenants can save so much money just by moving to a bigger apartment. He said prices in several Bakersfield rental communities his company owns and manages typically differ by about $ 100 per month – in some cases only 11% more for an additional room.
Her advice was that one-bedroom tenants find a roommate to help them reduce their housing expenses. He said that instead of $ 900 a month on their own, they could pay $ 500 each. That’s a savings of $ 4,800 per year.
“You would really get some sort of an award that way,” he said.
The Rent.com report indicated that an increase in US demand for one-bedroom units has left two-bedroom apartments unoccupied, mostly in the Midwest and West in areas near major metropolitan areas experiencing high pressure levels. historically high rental prices.
He was referring to the effects on the local market of an exodus to cheaper areas, much like the one Bakersfield has experienced since the start of the pandemic with a surge in immigration from the Los Angeles Basin.
The report only looked at cities with more than 50,000 residents and at least 10 of each rental type available for rent. It calculated rental prices on a one-year rolling weighted average based on Rent.com’s apartment guide and online inventory of multi-family rental properties in July.
Using a weighted averaging system that reflects the availability of prices for each type of unit while adjusting for seasonality, he estimated the rent for the one-bedroom apartment in Bakersfield at $ 1,104 and its price for two rooms at $ 955.
“Switching from a one-bedroom apartment to a two-bedroom apartment in these cities can save you some serious changes,” the report opens. Its No.1 market for the largest price differential was Temecula, where a one-bedroom rent averaged $ 3,234 in July, according to Rent.com calculations, and a two-bedroom at 1,885. $.
A local influx such as that described by Rent.com took Bakersfield’s apartment vacancy rate to an all-time high of 0.98% in the second quarter of this year. Meanwhile, the median price of a single-family home in Bakersfield recently surpassed its record of 15 years ago.
A recognized authority in the Bakersfield multi-family residential market, Marc Thurston, did not come to the same conclusion as Rent.com.
Thurston, senior vice president of ASU Commercial, produces a quarterly residential rent survey showing that amid record vacancy rates, moving from one apartment to two in the spring costs a modest amount of more per month – and in some parts of town the price was maybe the same.
Its second quarter update also suggests that residents could really save money by switching from a one to two bedroom apartment, but only if they were willing to move to a cheaper part of town.
In particular, there were significant differences between the top of the range for one-bedroom apartments and the bottom of the range for two-bedroom apartments. In this sense, a person willing to settle for a much less attractive place with an extra bedroom could, in effect, save money each month.
Here is the breakdown of ASU rents in Q2 2021 by submarket:
- South: $ 700 to $ 1,050 per month for a one bedroom, $ 725 to $ 1,150 for a two bedroom
- South-West-East: $ 750 to $ 1,140 per month for a one bedroom, $ 790 to $ 2,002 for a two bedroom
- South-West-West: $ 895 to $ 1,613 per month for a one bedroom, $ 1,394 to $ 1,731 for a two bedroom
- East: $ 800 per month for a one bedroom, $ 800 to $ 850 for a two bedroom
- Central: $ 625 to $ 1,125 per month for a one bedroom, $ 695 to $ 1,225 for a two bedroom
- North: $ 525 to $ 1,295 per month for a one bedroom, $ 695 to $ 1,395 for a two bedroom
- Northeast : $ 595 to $ 1,150 per month for a one bedroom, $ 695 to $ 1,425 for a two bedroom
- North West: $ 1,160 to $ 1,836 per month for a one bedroom, $ 1,260 to $ 2,115 for a two bedroom
Thurston said by email that he would need to see the data before judging the Rent.com report. It is possible that the company’s analysis compared units from different parts of the city, he theorized, or that Bakersfield suddenly saw an increase in the number of single adults or university students in the city. outside the region.
Or, he wrote, it could be the website researchers who surveyed rental communities with a small inventory of one-bedroom units.
“As a result, 1 bedrooms might charge a premium over 2 bedrooms based on simple supply and demand,” Thurston wrote. He added that developers have tended to focus on two and three bedroom units due to their historically higher rents.
Bakersfield Association of Realtors president Scott Knoeb doesn’t believe it.
His company manages around 200 units, from studios to T5. In his 15 years in the business, he said, he hasn’t seen people save money just by switching to a two-bedroom apartment.
Some one-bedroom homes are quickly renewed, as young people who rent their first apartment get a promotion at work and want to upgrade. This exposes these apartments more frequently to market conditions, Knoeb said. On the other hand, he noted that the same type of units can be “locked in” with government rent subsidies, which favors long-term tenants who are less prone to fluctuations in house prices.
Demand is comparable for his one- and two-bedroom apartments, he said: Every time a job opens, it gets 10-20 applications and probably 100 phone calls.
“Everyone is desperate right now,” he said. “There is so much demand. It’s honestly sad. It really is.”