Foreclosures Affecting Reddings Rental Market

Banners advertising space for rent or lease are plentiful along Redding’s Hilltop Drive as landlords look to fill empty units.

“We see a lot of people losing their jobs. They have to relocate or find something much smaller,” said Michelle Connaught, business manager for River Knolls on Hilltop Drive. “Right now, all of Hilltop Drive has been hit hard.”

The number of people looking for apartments on Hilltop Drive has declined since the beginning of the year, Connaught estimated.

With its panoramic views of Redding and the Sundial Bridge, River Knolls typically has a waiting list. But Connaught has found it increasingly difficult to fill vacant units.

River Knolls recently dropped monthly rents $50. Rents range from $800 to $1,120 a month.

“There’s not enough traffic because there is not enough work,” Connaught said of people looking for rentals.

Shasta County’s unemployment rate in February was 16.2 percent, the highest for any month in 16 years.

“Three weeks ago, we were fully occupied. Now we have notices. It’s just turned around,” said Linda Morrison, who manages Redding Hilltop Apartments on Hilltop Drive, where rents run $630 to $640 a month for a one-bedroom.

“People are moving into two bedrooms with a roommate to save money or they’re moving back home, or out of state.”

But job losses are not the only reason vacancies are up in some areas.

The Shasta Creek Apartments in Redding have about 20 vacant units, roughly a fifth of the complex. Manager Thomas Turner said some residents are leaving because they’ve purchased a home.

“We just lost five residents who bought a home,” Turner said.
The number of people who can afford to buy a home in the Redding area has reached nearly 50 percent, according to the most recent National Association of Home Builders/Wells Fargo Housing Opportunity Index.

Of the new and existing homes sold in the fourth quarter of 2008, 48.8 percent were affordable to families earning Redding’s median annual income of $53,300, the index reported.

The median sales price in Redding from October to December of last year was $195,000, down from $209,000 the previous three months.

But the declining housing market has affected the rental market in other ways.
Walt Swift of Swift Properties in Redding said homeowners who can’t sell but don’t want to reduce their asking price are opting instead to rent their places out.

“We get a slug of calls every week from people who can’t sell,” Swift said. “We are talking upwards of $500,000 homes, or at least they paid $500,000 for it, but they can’t get that.”

North state property management firms, too, are renting homes and apartments to families who have lost their property to foreclosure.

Chad and Kerryann Barnes were in Redding this week to look at homes to rent. The Barnes, who have two children, are renting in Fresno after losing their home in Los Banos last August to foreclosure. They’re moving to the north state for a new start.

The Barnes want to rent a home on property for about $1,800 a month.
“There’s a ton available and at a decent price,” Kerryann Barnes, 33, said.
Chad Barnes, a 34-year-old California Highway Patrol Officer who’s transferring to Weaverville, said in one day they looked at 10 attractive rentals that were available.

“We will be up here in the middle of June,” he said.

North state property managers said that being foreclosed upon doesn’t necessarily mean a family won’t make good tenants.

“I’ve rented to a lot of people who’ve lost a home in foreclosure,” said Deborah Sain of Hubbub Properties in Redding. “Those can actually be good tenants: They are previous homeowners, they realize what they can afford, they can pay on time and they’ll take care of the place.”

Swift said occasionally his firm will encourage a family who’s lost a home to foreclosure to write a letter explaining their situation.
“We will present the letter with the application,” Swift said.