California boasts high rental rates

Rental rates have improved in California.

Nearly half of homes in California are rental properties, and this could make property management companies in the area optimistic that this will continue, as much of the state is unable to afford homeownership for the foreseeable future, according to a report from Local Market Monitor.

In total, 45 percent of the state's homes are rented, but much of this is due to home prices that many residents cannot afford. In addition, due to the economic downturn, there are many vacant homes left due to the sizable amount of foreclosures, HousingWire reported, citing the report. This is compounded by the state's losses of 800,000 jobs in both manufacturing and construction jobs, which could prevent further growth in both the residential and commercial markets.

"Unemployment is very high in much of the state, limiting the immediate opportunities for investors in rental properties," wrote Ingo Winzer, president of Local Market Monitor. "On the other hand, job growth has been strong in some markets, which will lead to stronger rental demand in the next couple of years."

Winser added that areas such as San Jose, San Francisco, Bakersfield and Redding have already experienced impressive job growth in the past 12 months.

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