Rental statistics released last week document what property owners and apartment seekers already know: Berkeley rents are down. Apartment vacancies are up.
The report released by Cal Rentals, a university-run student rental service, shows that prices have fallen steadily since they peaked last summer.
In July, a studio apartment cost $870 a month, $114 less than last year and $59 more since June, the second largest monthly drop in four years.
A one-bedroom in July rented for $1,202 a month, just $9 less than in June, but $173 less than a year ago. Two-bedroom apartments experienced the biggest decline. Last month a two-bedroom rented for $1,598 a month, $58 less than in June and $224 less than July 2001.
This year is on its way to becoming the first since the advent of Berkeley’s rent control in 1998 that rent prices might be lower than the previous year’s. In late 1998, rents jumped 30 percent and continued to climb for the next three years, according to the Cal Rentals report.
And while prices are now dropping, said Robert Englund of the Berkeley Property Owners Association, apartment vacancies are increasing. Since July, “for rent” signs have multiplied.
The reason for the changes after the three years during which renters flooded Berkeley is that many fled the city as the economy moved into recession. From July 2001 to November 2001, average rents dropped $131 for studios, $143 for one-bedrooms and $167 for two-bedrooms.
Renters are pocketing the savings but landlords are paying the price.
After a brief upswing earlier this summer, property owners expect another difficult fall. “This is the period of the highest demand, but their are still a lot of vacancies,” Englund said.
Landlords who bought their property during the boom are hurting the most.
“There are some owners who are struggling to make mortgages due to vacancies and lower rents,” said Englund.
Al Fatake, of K and S Realty, cited one Berkeley client who purchased an eight-unit building in early 2001 in which three of the apartments were empty. Today the bedrooms are still empty.
“They bought it when they thought the market was right, and tried to rent them for $1800,” Fatake said. The owners reduced the asking price but have not found any takers.
Fatake said that the average turnaround time for a vacated rental averages 30 to 60 days. During the boom it was two weeks, he said.
Among the surprising benefactors of the slump: Berkeley students who live in dormitories. For the second time since the 1995-1996 school year, the university is reporting that it has open dorm beds. According to Michelle Kniffin of the university’s housing department, 52 spaces were available last week.
In recent years, freshman who could not find dormrooms were said to have slept in cars or on friends’ couches for months.
“The last two years were really horrendous,” Kniffin said. “It’s nice to be able to say ‘Yes, I have housing available for you.’ “