After rising for several years, rents in the Los Angeles area are declining because of the economic recession and depressed home prices, researchers, real estate agents and property managers say.Hat tip: Calculated Risk
The lower local rents match a national trend, according to a report released Wednesday showing apartment rents fell in 54 out of 79 U.S. metropolitan areas in the fourth quarter of 2008. Softening rents add another obstacle to a housing market recovery, economists say, because tenants with low rent payments feel less urgency to buy a home. ...
Property owners and real estate agents say the supply of rental units has climbed in the last year. Overbuilding during the real estate boom added vacant units to the rental pool, and some home sellers discouraged by the moribund real estate market are renting their houses or condominium units rather than trying to sell. Foreclosures add both supply and demand to the rental market, as foreclosed homes become rentals and former owners seek places to rent. ...
The recession will probably pull rents even lower, Davidoff said, further delaying a real estate recovery. "There's weakening demand for all types of housing due to the economic downturn," he said.
Friday, January 09, 2009
Rents falling
The Los Angeles Times reports that rents are falling both in Los Angeles and nationwide:
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Spring 2008 Sunrise Multifamily Rental Market Report Finds Average Rental Rates Rising Across Northeast Markets.
ReplyDeleteFrom: Business Wire | Date: June 20, 2008 | COPYRIGHT 2008 Business Wire.
ALBANY, N.Y. -- The Spring 2008 Sunrise Multifamily Rental Market Report (c) released today by Sunrise Management & Consulting, reports average rental rates rising in most of the markets surveyed. Rate increases were recorded in all the New York, Massachusetts, New Hampshire, Maine and Vermont markets. Only Rhode Island and Western Connecticut, regions with existing high housing costs, reported flat growth.
more:
http://www.encyclopedia.com/doc/1G1-180378335.html
Renters can't escape housing foreclosure crisis
ReplyDeleteBy Stephanie Armour, USA TODAY
Rents, in fact, are accelerating in many markets across the USA. Vacancy rates are down from last year, and average rent is projected to rise 5.3% in 2008, up from a 3.1% increase in 2007, according to the National Association of Realtors. In some cities, rents are climbing at a double-digit clip.
Median rent for the first quarter of 2008 in 12 major metropolitan areas:
Atlanta: $986
Austin: $907
Boston: $1,645
Chicago: $1,355
Las Vegas: $1,056
Los Angeles: $1,699
Miami: $1,368
New York: $1,751
Phoenix: $939
San Francisco: $1,810
Seattle: $1,211
Washington D.C.: $1,687
All metro areas: $1,368
In San Francisco, the median rent rose 14.6%, to $1,810 a month in the first quarter this year compared with a year earlier, according to an analysis by Newton, Mass.-based Investment Instruments. The median rent in Seattle rose 10.3%, to $1,211, in the same period. In Washington, D.C., the median rent rose nearly 5%, to $1,687.
And in 2007, the number of renters in professionally managed apartments leapt by the largest amount since 2000, according to the National Multi Housing Council's March report. That increase was as large as the increase for the previous five years combined. From 2004 through 2006, 1.2 million households joined the ranks of renters, more than making up for the loss in renter households sustained from 2002 to 2004.
more
http://www.usatoday.com/money/economy/housing/2008-04-21-rent-rising-eviction_N.htm
the first quarter of 2009 is a lot different than the first quarter of 2008
ReplyDeletethe first quarter of 2009 is a lot different than the first quarter of 2008
ReplyDeleteConsidering the fact that the first quarter of 2009 is the period between January 1st 2009 and March 31st 2009, and the fact that today is January 9th 2009; your thought regarding the quarter is either pure speculation or complete fantasy. Pick one.
I live in Springfield, VA and my rent just went down....
ReplyDeleteAnonymous said...
ReplyDeleteConsidering the fact that the first quarter of 2009 is the period between January 1st 2009 and March 31st 2009, and the fact that today is January 9th 2009; your thought regarding the quarter is either pure speculation or complete fantasy. Pick one.
HUmm. Me thinks you don’t remember too much about the first quarter 2008.
Speculation, yes. But did we start the first quarter of 2008 with a half million in jobs lost? Did we start the first quarter of 2008 with bailouts for the big three? Did we start the first quarter of 2008 with a trillion dollars of tax payer bailouts gone-poof-?
The fantasy would be in thinking that the first quarter of 2009 is “shaping up” to 2008 levels.
Point taken, but counting your chickens before they've hatched is a bit like... what led to the economic situation in the first place, isn't it?
ReplyDeleteI live in Franconia near the beltway and my rent is going up 4.5%. Real estate is holding steady. One thing I have noticed is that from January 2003 to January 2004 that prices sort of held steady. Is it because the onslaught of sub-prime mortgages that drove prices exponentially up since 2004?
ReplyDeletewe have saw this same thing in our area. Rents are going down a lot more than I would like to see
ReplyDeleteIn my homeland of the Rust Belt, falling rents mean more Section 8 subsidized housing (more reliable than low-end tenants, all that were left after everyone else bought a house they couldn't afford); HUD is the main housing buyer. Section 8 and HUD bring (more) crime. Thanks, Uncle Sam and social engineering!
ReplyDeleteAnonymous Franconia -- Rents may be holding steady in your area, but real estate certainly isn't. I see townhouses walking distance from the metro that were once selling for $460K that are now selling for $280-$300K. Hardly "steady".
ReplyDeleteAnonymous, in your post to "Anonymous Franconia" you mentioned townhomes selling for $460,000 now going for $280,000 to $300,000. Please provide some listing examples of this.
ReplyDelete"we have saw this same thing in our area. Rents are going down a lot more than I would like to see"
ReplyDeleteBe on the lookout for new ghettos forming in apartment rental communities - especially those far from employment centers.
I have to agree about the communities that are far away from the employment centers. Arlington and Fairfax are employment centers, so we'll see how they fare especially since there will be an influx of job seekers. There are so many basement apartments available.
ReplyDeleteI agree seems like rents are not really dropping here in Fairfax County Springfield area.
ReplyDeleteI agree with the anonymous comment on January 11, 2009 at 12:17 PM. There are only a limited supply of basement apartments for all those moving to DC for a chance of being fully employed.
ReplyDeleteLooking at the YOY numbers, it seems that the last to capitulate will be Arlington and Montgomery Counties. Perhaps they'll undergo what Loudon, Fairfax, and other Northern VA counties have.
ReplyDeleteLooking at the YOY numbers, it seems that the last to capitulate will be Arlington and Montgomery Counties. Perhaps they'll undergo what Loudon, Fairfax, and other Northern VA counties have.
ReplyDeleteSo I guess the price drop of 7.5% is capitulation in Alexandria?