By Kelli B. Grant
- iStockphoto.com
Sorry renters, but the days of low rents and lenient landlords are over — at least for now.
Nationwide, the average rate for apartment and home rentals is up 6.7% from June 2010, according to a new report from housing search engine HotPads.com. Prices for studio apartments are up 14.3%, and a five-bedroom home is 12.1% more. One- and two-bedrooms got off relatively easy, with average increases of 2.3% and 2%, respectively. Tenants will see the bulk of rent increases this year, predicts listing site Rent.com, but can expect another 3% jump when it’s time to renew in 2012.
At the heart of the increases: vacancy rates have dropped from about 8% to 6.2% nationwide over the past year. “That’s a really steep decline in a 12-month period,” says Christina Aragon, a spokeswoman for Rent.com. The drop indicates pent-up demand from people who made-do with roommates or stayed with family during the recession. Nearly half of property managers say they have also seen an increase in applicants moving from a foreclosed property, according to a recent survey from credit bureau TransUnion. “Landlords have the power right now,” Aragon says.
In past years, renters could negotiate a lower rent or other concessions, like a waived pet fee or free parking. That’s largely disappeared, leaving consumers little recourse but hunting around.
Renters have a glimmer of hope for better deals in coming years. Landlords are so thrilled with the market that they’re starting to take out permits to build new multi-family buildings, Aragon says. Prices may loosen somewhat once those properties come in the market, as early as 2013.
This is getting out of hand. When you lose your job then lose your house and can’t afford to pay your $3000 a month mortgage how in the heck are you suppose to pay rent that runs $2700 to accomadate your family! Landlords and Apartments you should think about this. There has to be a better resolve!
Sharon, did you recently buy a home for yourself or are you just trying to find some suckers to get your commission from?
If your rent is going up or if it is already close to a house payment then what are you waiting for? This is a perfect time to stop thinking about buying a home and go talk with your favorite lender about your options. Long term mortgage interest rates are at historical lows and housing prices are down to a level that may already be at the bottom. There are a lot of lending programs available if you just stop thinking about owning your own home and take the first step call your local lender and find out what you can qualify for.
Landlords dont have it so easy. My earthquake insurance went up by 45%, garbage, water, etc., skyrocketing.
After a dip in 08-09 housheold formation is close to back on long term trend. Obsolete units continue to come offline, and production of rental housing has been well below the rate of household formaton and stock loss for at least 5 years. The recent increase in permit pulls still show potential production over the next couple of years at below the amount required to keep up with demand.
After 5 years of experience, the “shadow inventory” of single family homes has yet to have a demonstrable damping effect on the profesionally managed apartment business
Expect more and higher rent increases over the next several quarters