Considered a roommate? Report highlights local rental bargains
Sep. 11—It sounds too good but there may be some truth in a new report asserting it might be cheaper these days to rent a two-bedroom apartment in Bakersfield than it is to lease a one-bedroom place.
Using proprietary data and a weighted average, apartment-finder website Rent.com said the recent trend of big-city residents moving to less expensive areas has created lopsided demand in dozens of U.S. markets — and locally, two-bedroom units costing $149 less in July than a single.
Professionals within Bakersfield's rental market don't see it. But they agree with recent data showing price differentials between local one- and two-bedroom apartments are small to insignificant in some parts of the city, and that upgrading can make sense.
However startling the website's claim, the underlying numbers and methodology place Bakersfield on yet another top-10 list — No. 9, two ranks ahead of Fresno — by a measure that sheds new light on a local housing market going through an extraordinary demand spurt.
'PRICE BREAK'
If the question is whether demand for one-bedroom units is outpacing demand for two-bedroom apartments, it is, said residential manager and investor Frank St. Clair, "and that's why there probably is a lesser difference" lately between the one- and two-bedroom apartment prices.
But he laughed off the idea renters can save that much money just by moving to a bigger apartment. He said prices at several Bakersfield rental communities his company owns and manages generally differ by about $100 per month — in some cases just 11 percent more for an extra bedroom.
His advice was for one-bedroom tenants to find a roommate to help lower both of their housing expenses. He said instead of $900 every month on their own, they could be paying $500 apiece. That's a savings of $4,800 per year.
"You really would get kind of a price break that way," he said.
Rent.com's report said a spike in U.S. demand for one-bedroom units has left two-bedroom apartments unfilled, mostly in the Midwest and the West in areas close to major metropolitan areas experiencing historically steep rental prices.
It referred to local-market effects of an exodus to less expensive areas, not unlike the one Bakersfield has experienced since the start of the pandemic with a jump in immigration from the Los Angeles Basin.
The report looked at only 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 Apartment Guide and Rent.com's online inventory of multifamily rental properties in July.
NATIONAL COMPARISON
Using a system of weighted averages it says reflects price availability for each unit type while also adjusting for seasonality, it estimated Bakersfield's one-bedroom apartment rent at $1,104 and its two-bedroom price at $955.
"Switching from a one-bedroom to a two-bedroom apartment in these cities can save you some serious change," the report opens. Its No. 1 market for the widest price differential was Temecula, where a one-bedroom rent averaged $3,234 in July, by Rent.com's reckoning, and a two-bedroom went for $1,885.
A local influx such as the kind Rent.com described has brought Bakersfield's apartment vacancy rate to an unheard-of 0.98 percent in the second quarter of this year. Meanwhile, the median price of a single-family home in Bakersfield recently topped its record from 15 years ago.
A recognized authority on Bakersfield's multifamily residential market, Marc Thurston, has not come to the same conclusion as Rent.com.
Thurston, senior vice president at ASU Commercial, produces a quarterly residential income rent survey showing that amid record-low vacancies, moving from one to two apartments in spring cost only a modest amount more per month — and in some parts of the city, the price may have been the same.
His second-quarter update also suggests residents really could save money expanding from a one- to a two-bedroom apartment — but only if they were willing to move to a less expensive part of the city.
Notably, there were significant gaps between the high end of the range for one-bedroom apartments and the low end for two-bedroom places. In that sense, someone willing to settle for a significantly less desirable place with an additional bedroom could, indeed, save money every month.
SUBMARKET BREAKDOWN
Here's ASU's second-quarter 2021 rent breakdown by submarket:
* South: $700 to $1,050 per month for a one-bedroom, $725 to $1,150 for a two-bedroom
* Southwest-east: $750 to $1,140 per month for a one-bedroom, $790 to $2,002 for a two-bedroom
* Southwest-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
* Northwest: $1,160 to $1,836 per month for a one-bedroom, $1,260 to $2,115 for a two-bedroom
Thurston said by email he would need to see the data before judging Rent.com's report. It's possible the company's analysis compared units from different parts of the city, he theorized, or Bakersfield suddenly had a jump in unmarried adults or university students from outside the area.
Or, he wrote, it could be the website's researchers surveyed rental communities with a small inventory of one-bedroom units.
"As a result the 1 bedrooms might command a premium over the 2 bedrooms based on simple supply and demand," Thurston wrote. He added that developers have tended to focus on two- and three-bedroom units because of their historically higher rents.
SAD SITUATION
The president of the Bakersfield Association of Realtors, Scott Knoeb, isn't buying it.
His company manages about 200 units, from studios to five-bedroom apartments. In his 15 years in the business, he said, he's not witnessed people saving money just by upgrading to a two-bedroom.
Some one-bedroom units turn over quickly as young people renting their first apartment get a promotion at work and want to upgrade. That exposes those apartments more frequently to market conditions, Knoeb said. On the other hand, he noted the same kind of units can get "locked-in" with government rental subsidies fostering longer-term tenants less subject to fluctuations in housing prices.
Demand is comparable for his one- and two-bedroom apartments, he said: Anytime a vacancy opens he gets 10 to 20 applications and probably 100 phone calls.
"Everybody out there right now is desperate," he said. "There's so much demand. It's honestly sad. It really is."
