Welcome to October! We tend to have some of our nicest weather of the year here on the Monterey Peninsula. Fall is also officially here, but it feels more like summer than ever!
We want to discuss some various updates in the property management industry.
Relevant if you own rental property in the city of Monterey
The Monterey City Council voted 4-1 in favor of the Rental Inventory Ordinance on September 5, 2023. The ordinance requires all residential rental properties in the city to register starting January 1, 2024. The registry will create a public database of the city’s rental supply.
The ordinance requires landlords to submit the following information:
- The number of units they own
- The number of bedrooms and bathrooms in each unit
- Whether the units are occupied or vacant
- The current amount of rent collected
The registry’s goal is to gather information about the city’s rental supply. Over 60% of residents live in rentals. Many are considering this a precursor, and/or a form of rent control. More instructions to come from our company on how to properly register with the city.
A Slow Down in the Market
As we transition into a new season, I wanted to provide you with a timely update on the current dynamics of the rental market and its potential implications for your properties.
Rental Market Overview – Slowing Momentum
Since the start of September 2023, we’ve observed a noticeable slowdown in the rental market. The once-rapid pace at which properties were being rented out has tapered, and this deceleration is consistent with trends reported by industry analysts and fellow property management peers.
Potential Causes for the Slowdown
While it’s too early to pinpoint an exact cause, a number of factors could be contributing:
- Seasonality: Historically, the rental market tends to slow down during the autumn and winter months. Families have usually settled before the school year starts, and moving becomes less desirable due to colder weather and the holiday season.
- Economic Factors: Shifts in the job market, inflation, and other economic trends can impact rental demand.
What Does This Mean for You?
- Potential Extended Vacancies: If your property is currently unoccupied or will be available for rent soon, it might take a bit longer than usual to find a tenant. Rest assured, our team is using all available resources to minimize this duration.
- Competitive Pricing: We may need to review and potentially adjust the rental price to align with the current market to attract potential tenants.
- Enhanced Marketing Strategies: Our team is proactively exploring new marketing avenues and strategies to ensure maximum visibility and appeal for your property.
A Pledge to You
While market dynamics are beyond our control, our commitment to you remains unshaken. We will continue to monitor the situation closely, keep you informed, and adapt our strategies to best serve your interests. Your property’s well-being and return on investment remain at the forefront of our efforts.
Key changes affecting the rental housing industry when SB 567 takes effect in April 2024:
No-fault tenancy terminations
- SB 567 introduces modifications to two specific “no fault” tenancy terminations currently governed by state law.
Substantial remodel of rental units
- Owners retain the right to end tenancies for substantial remodeling.
- Termination notices must now detail the intended work and inform the tenant of their reoccupancy rights if work doesn’t commence or isn’t completed.
Owner move-in provisions
- Owners or their family members must reside in the unit for at least 12 months and move in within 90 days of the tenant’s departure.
- Limits set on re-renting the unit if the landlord doesn’t comply.
- Non-compliant landlords can face penalties under the provisions of SB 567.