What’s that? You want $200 off the rent? No problem.
How about a free month’s rent if you sign a lease? Oh, and pets are OK too.
Sound like a tenant’s dream? Maybe a reality in Idaho, or Wyoming, right? Never in the Bay Area, where sky-high rents are as famous as the Golden Gate Bridge.
But Berkeley’s three largest housing referral services say they’ve witnessed a dramatic escalation of available rentals this season. During the last month, their phones have been ringing off the hook with landlords lowering prices.
Vacancies are up more than 400 percent from last year, according to Allison Vogel, director of customer service at Homefinders, a Berkeley-based referral service.
As of Oct. 24, Homefinders had 2,003 vacant East Bay listings, compared to 456 properties at this time last year.
For months, no one’s dared to say the “R” word: Recession.
Now, another phrase is perched on people’s lips: Renter’s market.
“At our office, every other phone call is a landlord dropping their rent,” said Becky White, director of the UC Berkeley-based Cal Rentals. White said some landlords have to drop prices three or four times before a tenant moves in.
“I’ve got a studio at Haste and Fulton, right near campus for $695,” said Leah Summers, director of customer service at eHousing, based in downtown Berkeley. “That’s ridiculous. It was a $1,000 unit a few months ago.”
“It’s like, where did all the people go?,” said Vogel. “They must have left the Bay Area, because they’re not moving to the suburbs. Landlords in Walnut Creek can’t rent either.”
Vogel and Summers can rattle-off a list of recent phone calls: landlords willing to cover rent until tenants are ready to move in; landlords lowering the deposit; landlords staunchly against pets calling to say they’ll allow a dog or cat this time around.
“It’s a very unusual year. It’s unprecedented,” said Nancy Pfeffer, a research analyst with Cal Rentals.
Pfeffer was staffing a table in UC Berkeley’s Sproul Plaza last Friday as part of a university-sponsored “Tenant’s Rights Week.” She said some students had approached her to report they had been able to find an apartment in just two days.
For home-seekers like Maya Spaull, that’s good news. She said she’s been looking for a two-bedroom house for two weeks, and “there’s a lot available.”
Spaull said she’s seen a few things she’s liked, but she and her roommate want “ an ideal place, with lots of amenities,” so they’ve decided to keep looking. “We turned one down,” she said nonchalantly.
The landlord offered one month free, but it was a duplex, and Spaull wants a single family home.
It’s certainly a world of difference from last year, when landlords were the ones turning people down. Jobs were plentiful, but competition for scarce housing was fierce.
Now it’s the opposite, said Spaull, a recent college graduate.
“I’m having a harder time finding a job than a place to live,” she said.
October and November are typically slow months for rentals, said representatives from all three referral companies. But the volume of vacancies is much higher than in years past.
White said she began to see signs of a slowdown as early as June. Some rents were dropping in August, which is typically peak season as students return for the school year.
“Eighteen years in this job, and I’ve never seen that happen,” said White.
San Francisco has seen the impact of a softening market for several months. Postings to a housing forum on the web-based craigslist.org indicate that prospective tenants are successfully negotiating lower rents. Some existing tenants have also been able to ward-off rent increases.
But some landlords responding to an e-mail query about the East Bay market said they wouldn’t consider lowering rents.
“I won’t lower my asking price,” said landlord Kesete Yohannes, who said his outlook on the economy was optimistic. He said he rented an apartment in North Oakland last month just three hours after placing an ad. The price was $850 for a one bedroom, $100 below average area rents for September according to eHousing’s Summers.
Meanwhile, the student-run newspaper, The Daily Californian, received numerous calls from landlords wanting to change the asking price listed in advertisements. And Albany-based K&S properties, which has 50 vacancies in the East Bay, has run ads offering a month’s free rent for tenants who sign a lease. In September, they offered a $200 discount for renters.
Indeed, many properties have languished on the market for months. Chun-Xian Sung has had a vacancy in large two-bedroom apartment in posh North Berkeley for three months. The previous tenants paid $2,200. He’s lowered the price to $1,800 and said he would be willing to negotiate the deposit and terms.
But he can’t get the place rented. Every time he’s held an open house, only two people show up. The 91-year old Chinese immigrant is worried; rent from the eight-unit building supports him in his retirement.
Sung has advertised with Homefinders, eHousing, and Cal Rentals. These agencies said their phones are ringing off the hook from landlords, but not necessarily from tenants, whose subscription fees sustain their businesses.
When the market is glutted with vacancies, tenants are less likely to use listing agencies So they’re offering specials, too. Homefinders has a 30-percent discount through the end of the month; eHousing is offering $20 off its fee for apartment-seekers.
“We want people to know they really don’t have to pay such high rents,” said Vogel of Homefinders. “I know people are nervous about the economy, and might be afraid to move. But it’s not a bad idea, you might find something cheaper out there.”
“If it doesn’t work out here, maybe I’ll go to S.F.,” said Jeff Curland, checking the listings at eHousing.
“The world is turning on its head,” Curland said.