Fewer people choosing to move as the holiday season approaches,
city official says
Though apartment rentals are not necessarily hard to find in Morgan Hill, there are more than 1 percent fewer of them on the market now than in April of last year.
The city recently accepted a survey establishing that the apartment vacancy rate was 3.46 percent in October, down from 4.72 percent in April of this year.
By law, the city is supposed to establish the apartment vacancy rate twice a year as a reference for condominium conversions. The municipal code states if the vacancy rate is above 5 percent, apartment owners may be able to convert their units to condominiums for sale on the real-estate market.
“The survey is by no means a scientific survey, but it provides us with substantial information of units available to give us a good idea to determine whether there would be condo conversions, and it gives us an idea of what the market is doing,” Business Assistance and Housing Service Director Garret Toy said.
Most recent multi-family housing estimates from the State Department of Finance reveal there are a total of 1,895 multi-family units in Morgan Hill. The city’s survey results account for over 50 percent of all units.
The survey included 22 apartment complexes with a total of 1,126 units. In April of 2005, there were a total of 48 vacancies; in October, of the same apartments surveyed in the spring, 39 were vacant.
The vacancy rate is significantly lower this time of year for various reasons, said Toy.
“The vacancy rate usually goes down this time of year since people tend to settle in one place and don’t want to move with the holidays approaching. You see more people move out in the spring,” he explained.
In April of 2004, vacancy rates were 5.35 percent and dropped to 3.31 percent that October.
He noted too, jobs bring people to Morgan Hill, as well as affordable rental units. “That we can offer affordable rental units is a big draw,” he said, adding, “Morgan Hill is considered a desirable place to live.”
Morgan Hill is still faring well with just 39 vacant units, both Toy and Planning Commission Chairperson Ralph Lyle indicated. They both remember five years ago, before the Silicon Valley tech bubble burst, when the vacancy rate was under 2 percent.
“It was difficult to get an apartment at that time because the economy was good and Silicon Valley was booming,” said Lyle.
Five to 6 percent, said Toy, is still considered “a healthy vacancy rate.”
Although not required, the city also tracked rent rates and compared them to six months ago. In October, rents ranged from $654 to $1,200 for a one-bedroom apartment; $771 to $1,500 for a two-bedroom; and $580 to $1,750 for a three-bedroom unit. Toy cautioned rents disclosed in the survey may not be true prices, since apartments can run specials or special discounts for residents.
Some rents are slightly higher than six months ago, but they have not jumped significantly, he said. Some apartments raised rent since the April survey by as much as $100 in some units; a couple reduced them by $25; majority kept rents the same. The city does not control rents charged by market rent units. Their rents follow the market trend, according to Toy.
In 1999, Vineyard Court, with 50 two-bedroom units, opened its doors and charged between $1,650 and $1,850, according to manager Janice Brown. She said when the tech bubble burst in 2001, rent dropped to the $1,500 to $1,575 range. Today, with demand being slightly higher, rent is up at the $1,600 to $1,725 range. Brown said she receives about 20 calls a week from potential renters, but Vineyard Court has no vacancies.
At least one renter is not happy with rent prices increasing, even by just a little bit. Jason Burtis, who rents a one-bedroom apartment at the Monte Vista apartments, said he is tired of rent payments going up and high rent in the Bay Area and has decided to move to Arizona.
“I’ve been paying rent all my life and I’m tired of it. All my siblings and friends own their own home and it’s time I did too,” said Burtis.
Burtis and his wife have been living at Monte Vista for almost three years. In 2003, he rented a two-bedroom, two-bathroom apartment for $1,150 a month. The rent stayed the same for two years, but this summer, rent for the apartment increased to $1,400, so the Burtises downsized to a one-bedroom apartment for $1,150. He was recently informed that rent for the unit would increase to $1,235 if he leased it for six months, or $1,350 if he leased it by the month.
The couple has decided to leave California and will be moving to Arizona in a few months, where they are building a 2,000 sq. ft. home for $249,000 and their monthly mortgage for the home will run $1,850.
The city also included a survey of senior rental projects in their report. Of 27 units at Shadowbrook and 20 units at Sycamore Glen, four one-bedroom units were vacant at Shadowbrook in April. There were no vacancies in Sycamore Glen in the spring. In the fall, each senior rental project showed one vacant unit.
Rose Meily covers City Hall for the Morgan Hill Times.
