Renters out West who want to buy a home soon may want to make that purchase very soon.

Greater rental costs are beginning to further exacerbate affordable housing concerns already prompted this spring by home prices soaring by double digits in some Western metropolitan areas.

Novato, CA-based RealFacts, which surveys the rents and occupancies of 10,000 properties in states West of the Mississippi said first quarter 2004 numbers reveal year-to-year rent increases in 16 of the 25 major metropolitan areas it tracks.

Year-to-year increases ranged from 0.4 percent in Phoenix to 6.2 percent in California's Inland Empire, where more and more Californians are moving to avoid higher rents and home prices nearer the coastal metropolitan areas.

Fifteen areas also saw rents rise from the fourth quarter of 2003 to the first quarter of 2004, with the Inland Empire again leading the way with a 1.1 percent jump in rents, according to RealFacts.

California, where both home prices and rents are among the highest in the land, was a region of opposites.

While the southern California markets of Orange, the Inland Empire, Los Angeles and San Diego once again had some of the greatest rent increases, the northern California markets of San Francisco, Oakland and San Jose experienced the region's greatest declines.

Still, given the high cost of average rents in San Francisco Bay Area counties ($1,278 in Santa Clara County and $1,294 in Santa Cruz County, for example), renters are squeezed between the rock of rents and how hard it is to afford to buy. In both counties, median home prices recently broke the $600,000 barrier -- by tens of thousands of dollars in Silicon Valley.

In Texas, rents in the hard-hit and overbuilt markets of Austin and Dallas/Ft. Worth, as well as in Houston and San Antonio, stabilized but not without decreases in occupancy. Rents fell too in Boise, Salt Lake City, Portland and Tulsa.

Average rents throughout the region ranged from $525 in Tulsa to $1,544 in San Francisco.

RealFacts says the same job growth and interest rate concerns that affect the home buying market are hitting the rental sector as well.

"Just as job growth lagged during the early stages of the economic recovery, so too have rent and occupancy growth -- not surprising given the close correlation between job growth and apartment demand. If recent positive job growth figures are not an anomaly and the economic recovery continues, we should expect to see occupancy increases next quarter," RealFacts reported.

With occupancy increases will come more and greater rent increases throughout the region.

"However, strong rent growth is not likely to follow until interest rates rise enough to both restrict the development of new apartments and make financing home ownership less affordable. Our expectation remains that the Federal Reserve will not put significant pressure on interest rates until after the fall presidential election," RealFacts reported.

Renters may still have some room to negotiate with landlords, but given the rising cost of buying a home, that may be time better spent negotiating with a home seller.

Published: April 23, 2004

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Broderick Perkins parlayed a career in old-school journalism into a contemporary digital news service that really hits home. The award-winning consumer journalist, originally from Wilmington, DE, is founder, publisher and executive editor of the bootstrap DeadlineNews Group, a Silicon Valley-based editorial content and consulting service specializing in residential real estate, consumer news and related editorial consulting services. The DeadlineNews Group includes the website, DeadlineNews.com, offering real estate editorial content and consulting services, and its back shop, the Deadline Newsroom, an open house on news that really hits home. Perkins obtained his formal journalism education from University of Delaware and a journalism boot camp, the Institute of Journalism Education at the University of California-Berkeley. He went on to 20 years of service as a daily newspaper journalist at the Wilmington, DE News Journal and San Jose, CA Mercury News. Perkins covered housing on the San Jose Mercury News reporting team which earned a General News Reporting Pulitzer Prize in 1989 for coverage of the Loma Prieta earthquake. He has also produced real estate, consumer and small business content for the Wall Street Journal, Los Angeles Times, RealtyTimes.com, Nolo.com, Better Homes and Gardens, the National Association of Realtors, Homestore/Move and Intuit/Quicken among more than three dozen publications. In addition to managing the DeadlineNews Group, Perkins most recently served as chief editorial consultant for Nolo's Essential Guide To Buying Your First Home, Nolo, and writes real estate television scripts for RealtyTimes.com.