"If you really put me on the spot, I would say 2009 should start to see some stabilization and rent increases as the recovery engages," said Charles DeLoney, a Sacramento-based executive with commercial property broker CB Richard Ellis.
Others don't see a change coming that soon. Robert Machado, who manages 2,000 area home rentals as president of Sacramento-based HomePointe Property Management, says he believes a recovery might not come until 2010.
"If that's the case, it means people cannot sell their properties. That means they'll rent them out. Supply will stay up, and that means rents won't go up," he said.
One reason rents have remained flat is because of the thousands of new apartments that opened in 2005 and 2006 in Sacramento, Roseville, Rocklin, Elk Grove and West Sacramento. Many still offer a month's free rent with move-in specials.
By contrast, said DeLoney, average rents rose 30 percent in the Bay Area the last three years, thanks to a robust economy and constrained housing supply.
Kirk Lesh, a real estate economist at the University of California, Santa Barbara, said rents are up all over California as thousands are pushed back into the rental market. "If you are an apartment owner, this is a good time," he said.
Indeed, M/PF YieldStar has ranked San Francisco, Oakland, San Jose, Portland and Seattle among its top 10 rental markets for investors in 2008. Salt Lake City also makes the list.
When the Sacramento housing market recovers, it is still unlikely to make that list, industry insiders say. That's because of the kind of market it is: Even in best of times, the capital region is more about slow-and-steady than go-go-go.
"Sacramento is a really nice Midwest town located in California," said HomePointe's Machado. "It's frustrating for investors. In the Bay Area you can maybe make money on the two- to three-year plan. Here it's the 10- to 20-year plan."
As the housing bust has caused investors in rental properties to pull back here, the number of apartment units being sold is down by about half from 2005, said Dylan Herrick, a senior associate with property broker NAI BT Commercial. Dollar volume of sales is down by about the same amount.
But there are some folks with capital taking a new look, especially because prices for big apartment complexes are falling just like home values. On its Web site, CB Richard Ellis currently lists 17 area rental properties. Three have price reductions of $4 million, $6.6 million and $9.7 million.
DeLoney pointed to history for what is likely to happen eventually: Housing in the Bay Area becomes so much more expensive than the Central Valley that sooner or later more people will move inland and rents will rise.
"Historically, the pressure in the housing sector has relieved itself in Sacramento," he said.
Call The Bee's Jim Wasserman, (916) 321-1102. Read his ome Front blog at www.sacbee.com/blogs.
