Top rental price increases occur in California

California cities experienced sharp rental increases.

Rental rates increased markedly in some cities around the country last year, but a sizable portion of the top performers came from California.

La Quinta, California, experienced the most significant rental price increase in the nation during 2012, as commercial property managers in the area saw rental prices rise nearly 36 percent compared to 2011, for a total jump of $932, a report from RentRange explained. Fullerton was the second California city in the report, as the figure rose more than 26 percent compared to the previous year, for a full gain of more than $600. Palm Springs rounded out the top three, with a gain of nearly $400, or 20.5 percent higher than the previous December.

“Rental price movement over time is one of many important metrics that investors utilize when evaluating suitable marketplaces. As popular markets become saturated with investment activity it is important for purchasers to leverage specialized rental market intelligence to identify attractive markets that competitors have yet to notice,” said Walter Charnoff, founder and CEO of RentRange.

Texas had one entrant in the top 10 of the report, with Harker Heights finishing fourth, the report added. This was a total gain of $244, which was 20.5 percent higher than the previous year. Florida also had one city make the list, as Sarasota’s gain was more than 16.5 percent higher year-over-year, for a total price increase of $277. The only other city that was not in California to finish in the top 10 was Mableton, Georgia. This area was ninth on the list, as it finished with a $172 yearly jump, giving it a boost of almost 16 percent.

The other cities on the list from California were Encinitas, which finished fifth, Palm Desert in sixth, Indio in eighth and Spring Valley rounded out the top-10, the report added.

California developers positive about local CRE market
There was a wave of optimism from commercial real estate developers in the Golden State toward the end of 2012, as more felt the multifamily market was improving.

The vacancy rate for multifamily properties in the state was below 5 percent to end the year, according to a report from Allen Matkins/UCLA Anderson Forecast. This helped multifamily development spike, while rental rates and occupancies continue to ramp up. Additionally, many families are choosing rental options over owning a home in the state.

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