SPECIAL REPORT: Rental prices on Central Coast show signs of slowing

Year after year rental prices have risen along the Central Coast, but that may be changing – good news for renters. KION has been tracking prices for the last two years. Silicon Valley continues to play a supporting role in what’s going on in our area.

“I would say right now it’s still a landlords market, but it’s slowly starting to go towards a renters market,” said Oliver Property Management Co-owner and Broker Kathy Oliver.

After years of rental price hikes and pain to the pocket book, renters across the Central Coast are starting to get a bit of relief.

“In 2017 we really saw stabilization of rental rates. For a while we had a lot of people losing their homes and more people renting. It’s kind of natural that when you have a huge upswing and then it levels off,” said Broker & Owner of 36° North Properties, Audrey Wardwell

In Santa Cruz inventory is tight, as more people priced out of Silicon Valley look for affordable rents.

“When things go up for rent, they get rented right away. We actually have a waiting list,” said Oliver.

That’s the trickle-down effect. Oliver says she’s seen about a 10% increase in the number people moving to the Watsonville area from Silicon Valley.

“It’s actually interesting that they’ll commute that far, but what they do is they will go over 152, instead of 17,” said Oliver.

Rental demand remains high not only in Santa Cruz and Watsonville, but also in Salinas. So while prices may not be rising, don’t expect rents to drop in 2018. To save you need to move south.

“Royal Oaks, some of those areas are less expensive, Pajaro is a lot less expensive. Same with San Juan Bautista and Hollister, but they have started getting the Silicon Valley influence as well,” said Oliver

So lets compare prices….

A one bedroom in Watsonville will cost around $1,000-$1,100, but in Santa Cruz that price is closer to $1,400.

A three bedroom two bath home in South Monterey County ranges from $1600-$1800. In Salinas that same home would cost $2100-$2600 and then on the peninsula that number would jump to $2800-$3100.

“First quarter I really think we are going to continue seeing a stabilization, but I don’t think we will see a huge dip in rental rates because we still have a high demand. And with the lack of housing we will continue see increases that are more stabilized then those huge jumps up,” said Wardwell.