Rejoice, landlords! Sorry, tenants
For some time, we’ve been reporting on the trend toward agents focusing more time on residential leasing as the housing sector continues limping along. Leasing is chic and the stigma around it is slowly fading- people that are fully capable of buying are sitting still or trying out new areas of town while others have no choice and are living in rentals due to foreclosure. Either way, “rent” is no longer a cuss word.
Rental rates have been going up considerably over the last year and it appears it is accelerating, rising at a rate beating most economists’ projections for 2011. A new report released by real estate search site HotPads.com reveals that residential rental listing prices have jumped 6.7% from June 2010 with the fringe listings of studio and five bedroom apartments escalating most rapidly.
HotPads.com says that “this is a telling trend which may indicate a growing demand for rental housing among first time renters and larger families” but we see it more as a supply and demand issue in that studios and very large rental units are less common (low supply) and because rentals of all sizes are in high demand right now, it appears a premium is being set on studios and five bedroom units.
In most cases, the rapid rise in rent has occurred in 2010 rather than a slow increase over the past twelve months. We are seeing consumers flocking to their chosen social networks, flustered that their landlord is screwing them over and are being met with the harsh reality that it isn’t their landlord, it is the entire market. Times have been rough for landlords, is this the time to recoup the losses met since 2008? In some markets, rents have been held down but national trends are allowing an increase as perception of the market is softening.
Rental trends graphed:
According to HotPads.com, the data in the graphs below was calculated based on the median listing price of 500,000 rentals on HotPads across all major U.S. metro areas. Click to enlarge.
What are you seeing in your area? Are any particular type of unit or size of unit rapidly increasing in price over others?