Rents On the Rise – Sherman Oaks Real Estate

by Mario Acosta on April 5, 2012

in Buyers, First-Time Home Buyers, Investors, Local Topics, Market Trends

Sherman Oaks Rental Trends Are Up

The cost to rent increased by 2.7% in 2011 in Sherman Oaks and throughout California.  Vacancy rates also dropped below 5% for the first time since 2001.  The largest rent increases were in San Francisco and San Jose, CA.  These areas rose 5.9% and 4.9% respectively.

Rent vs. Buy

2012 will be the first year since 2005 when the number of apartment renters that move out to buy will be larger than the previous year.  Historically, the cost to rent has been 10% lower than the after-tax cost to own a home.  That 10% margin began to shrink in 2010 and was totally gone by 2011.  By the end of 2011, an analysis by Deutsche Bank showed that owning a home was 15% cheaper than renting a comparable property.

Going Forward

With interest rates at historic lows, first-time buyers and investors will have a very favorable opportunity to keep their cost of ownership low.  Many investors in Sherman Oaks and Los Angeles are finding this a great market due to the rising rents,  low interest rates and buying at depressed prices.  This is the perfect storm for many new buyers and investors.

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Post by Mario Acosta

Mario has written 117 articles.

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