The good times are over for the tenants. At the beginning of the housing bubble encountered the rental market as owners were forced to reduce their rates to retain existing tenants or attract new ones. Many owners even threw in all sorts of concessions and discounts to fill their units. Now rents are rising again. Not because the economy is improving - but it remains stagnant.
It is a classic example of supply and demand. While Americans have lost their homes and continue to put off buying a home, there are more tenants than ever. With a limited inventory, the owners raise rents. In 2010, rents across the country rose an average of 4.2 percent. In 2009, however, the owners offer big discounts to attract tenants and effective rent fell 5.9 percent. According AXIOMetrics, a research firm in Dallas apartment market last year was one of the best periods for homeowners in the last 15 years and may mark a turning point in the short term.
Rents rose again more recently in the Lofts of Greenville, a luxury property in Greenville, SC employment in elegant and renovated textile mill built in 1900 reached 100 percent in February, but even before that, the owner, response to strong demand and low vacancies, showed incremental increases in rent and concessions such as eliminating one month free. The rates for now Lofts start at $ 780 for one bedroom units (a 16 percent premium over the average monthly income in the area), but apartment hunters have not been isolated. "We have more appointments this week we've had in recent months," says property manager Kelly Beasley, who hopes to keep the total employment in 2011.
Throughout the metropolitan area of Greenville, effective rents (including concessions) increased 11.2 percent year-on-year in 2010 to $ 669, the biggest jump in the country. As the rental market heats Greenville - vacancies fell to 7.7 percent last year, 9.5 percent in 2009 - home sales fell 3.7 percent year on year, according to data closed sales in the College of Greenville of Realtors Multiple Listing System.
AXIOMetrics expects the growth rate to jump to 5 percent this year before cooling to 4.6 percent in 2012 to 4.1 percent in 2013 and 3.4 percent in 2014 as new apartments now pipe gradually become available. "My advice to tenants is to sign a lease if it can" to set the current rates, says President Ronald AXIOMetrics Johnsey.
AXIOMetrics tracks 88 metropolitan areas across the country and surveys of 16,131 apartment properties, with more than 4.3 million units. U.S. and rents rose 4.2 percent in 2010, consumer prices rose only 1.6 percent, according to the U.S. Bureau of Labor Statistics. U.S. vacancies fell 7 percent from 8.1 percent, and grants in the fourth quarter fell to 5 percent, 7 percent. (A grant of 8.33 percent is equivalent to one month's free rent on a lease for 12 months.)
After Greenville, metropolitan areas with the highest increases in rent are in Chattanooga, at 10.4 percent (the area led to employment growth in the state in 2010), and Savannah, Georgia, 8.4 percent (employers and Gulfstream Aerospace has announced plans to hire). On the West Coast, rent in Portland, Oregon, and San Jose was up 8 percent.
The New York-Wayne-Blanc area plans had the highest increase of rent past 18 years, 6 percent, but AXIOMetrics expected to jump to the first subway in 2011, an increase of 7.8 percent.
In only two cities, Las Vegas, Paradise, and Cape Coral-Fort Myers, Fla., effective rents in 2010.
tenant households is developed from two and three bedroom units in a room after many tenants had doubled in 2009 to save money, says Johnsey. In addition, more than 1.2 million young adults moved home with his parents from 2005 to 2010, creating "huge pent up demand for rentals," says John Burns Real Estate Consulting.
Unfortunately for tenants, rents increased demand for apartments grew - if the local job market improved or worsened. If job creation is based on new employees, many tend to rent rather than buy in the short term, until they decide what they want to solve neighborhood. In places with rising unemployment, the rent is more likely to purchase, especially as it remains difficult to get a mortgage. "You have less interest in buying homes. The turnover rate of the apartments has declined," says Johnsey.
Greenville, improving labor market, is home to businesses such as Michelin (), General Electric (NYSE: GE - News), and Fluor (NYSE: FLR - News). Nonfarm employment grew by 2,300 people to 294,900, in 2010, South Carolina Employment and Workforce Department of Unemployment fell to 9.8 meters per cent last year from 10.5 percent a year earlier, according to BLS preliminary calculations, and companies like Proterra electric bus maker also announced plans to hire.
As the economy improves, income from other properties in Greenville, McBee Station as a high-end 197-unit apartment, increased several times in the past year. The occupation has been 100 percent for a year and a half, says Courtney Sauve, assistant manager of the property, and demand does not come from local residents. Sauve said the vast majority of the tenants came from out of state or abroad for employment opportunities.
Less fortunate tenants in weak economies, as the area of California Oxnard-Thousand Oaks-Ventura Metro, also pay more. The average unemployment rate increased by 10.9 percent in 2010, from 10 percent in 2009, according to estimates based on preliminary data from the BLS, and the rate of foreclosure by 2010, 3.81 percent, higher than U.S. average of 2.23 percent, according to RealtyTrac. Home sales in the metro is slow, and as the rental vacancy falling below 5 percent, the owners increased rents around 5.8 percent in 2010.
Sharlene Oddy, estate manager at the 397 unit Creekside Apartments in Simi Valley, said the growing demand for rental housing has helped boost rents in the past year, but a new property next Archstone has added some competition.
Housing
new rent increases are expected in the coming years, but levels can not rise at this pace forever, especially if housing prices fall eventually attract people to buy. Robert Shiller, cofounder of the S & P / Case-Shiller price index, said that real house prices could fall another 15 percent to 25 percent.
And Johnsey AXIOMetric adds: "If rents go up, people will try to control the costs of your home and keep within budget Some tenants say the best way to control costs is to get a house .."
New apartments under construction also loosen the supply and put downward pressure on income levels, although it will be a couple of years before a significant number of new units on the market. There were 116,700 multifamily housing starts last year and 108,900 in 2009, compared with 283,500 in 2008, according to U.S. Census Bureau data.
For now, the hot rental market may overshadow the weak home sales, but says Johnsey rent increases, job creation and the fall in list prices for homes are the precursors of a strong sales market.
