U.C. Merced students boost housing market

MERCED, Calif.

This two story home in North Merced may not look like your typical student housing. But it's actually owned by a 20-year-old U.C. Merced student who also rents rooms to four classmates, including Adam Parsley.

"I lived on campus last fall for the fall semester, and I just enjoy the freedom of having my own place, being able to cook in the kitchen, stuff like that," said Parsley. "We have a pool, that's pretty nice."

The owner of Gonella Realty says he's seen a recent surge of students renting big homes near campus.

"From the end of April on, what we noticed was just a steady stream of students coming in, and the effect has been that the number of rentals in North Merced has really dropped dramatically," said Loren Gonella. "It's quite amazing."

Gonella says it's a positive trend for the local housing market because it's encouraging more investors to buy rental properties here, especially while prices are so low. "We're renting homes in North Merced, particularly the larger ones, 14-15-1600 dollars a month. The cost on these homes is running a thousand, 11-12 hundred dollars. Consequently you have an automatic cash flow from the very beginning, and that is pretty phenomenal."

The parents of some students, including Cameron White, are also buying investment properties near the university. "They would rather buy me a house and have me live here all of my career than pay for housing on campus."

And students say it makes financial sense for them as well.

Parsley said, "On campus, I was living in a single room, so I was the only student in that room and I was paying $1300 a month. Here I'm paying $450 a month, so it's a lot better."

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