Tuesday’s numbers showing that apartment rents still remain soft nationally is good news for renters and would-be renters. Those figures show that the apartment vacancy rate is still climbing, and reaching near record-highs since research firm Reis began its count in 1980.
Effective rents, which measure rents after concessions such as one month of free rent, decreased for the fourth straight quarter—that hasn’t happened since Reis began tracking rents quarterly in 2000. At the same time, landlords are also lowering asking rents, the price offered to prospective tenants before the negotiating process begins. ...
Renters can drive a strong bargain in the current climate.
Wednesday, October 07, 2009
Rents falling; vacancies rising
The Wall Street Journal says average rents are falling:
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Pretty much exactly as predicted. Even as rental/purchase ratios return to sanity, the increased supply of housing is lowering rents, because they respond more quickly to supply/demand. -Jim A
ReplyDeleteThis situation may not apply to DC area. I don't see rents falling and vacancy rising locally, especially in Fairfax county or Montgomery county.
ReplyDeleteThe most recent rental stats in the DC area
ReplyDeleteImmunington +2.4% YOY
Immundria +0.4% YOY
Fairfax -1.1% YOY
Dont have stats on Loudoun & PWC but I hear they are down YOY.
to anonymous. what are your sources? in any case, when you consider inflation, you still have a decrease in rent.
ReplyDelete"when you consider inflation, you still have a decrease in rent."
ReplyDeleteInflation? Really?
Tuskenrayder, I thought the same thing, but I went and looked at the inflation numbers for the last year and it was positive all the way through feb of 09 and high for most of 2008 with a peak of 5.02 in june based on CPI. The average for all of 08 was 3.85. Its only been negative for the last 6 months of available data. Who knew?
ReplyDeleteFYI i got that info here http://www.inflationdata.com/inflation/inflation_rate/historicalinflation.aspx
ReplyDeletekahner,
ReplyDeleteThe 2008 numbers aren't too surprising considering the economy didn't start to fall off the cliff until August.
The laughable statement provided by the anonymous poster, however, suggested that rental rate increases YOY were actually decreases when you factor in inflation. YOY inflation numbers are negative at present, so the increased rental rates are actually greater when inflation is considered.
Notice Washington DC greater metro area was not on the list. Also notice that Long Island and Colorado Springs both had increases in rent for the last 4 quarters. Many who work in the finance sector in NYC commute to Nassau County, Long Island (such as Valley Stream and Franklin Square). Colorado Springs has a lot of government jobs due to military presence. I think there is some base built into a mountain there.
ReplyDeleteAs government contractor and civil servant hiring picks up, rents will rise in Fairfax which will mean folks will look for housing in Manassas and even as further out as Front Royal. I remember reading how folks working in western Fairfax were buying homes 5 years ago in Warren and Fauqier Counties since they were being priced out of the market.
Source:
ReplyDeletehttps://www.nvar.com/Portals/1/marketstats/quarterly/2009_Q1_totals.pdf
I was mistaken - the rental gains in Immunington is 11.6% YOY. It is a noisy source though. Either way though, it is certain to be in excess of inflation.
From the NY Times - Immunington is officially declared immune:
ReplyDelete"ARLINGTON, Va. — While many metropolitan markets around the country are enduring steep increases in vacancies in their office and retail sectors, the Rosslyn-Ballston corridor in the Northern Virginia suburbs of Washington is an oasis of stability — and even of prosperity."
http://www.nytimes.com/2009/10/07/realestate/commercial/07ballston.html?_r=3&scp=1&sq=arlington%20virginia&st=cse
Good article, but in the San Antonio area commercial real estate is the next hammer to fall. They have over built and now the vacancy rate is beginning to climb rather rapidly.
ReplyDeleteAccording to the Dallas Fed, 1-year PCE inflation was -0.5%. 1-year trimmed mean PCE inflation, a less volatile measure of inflation, was 1.6%.
ReplyDeleteSource.
At my apartment complex in Centreville, Virginia, rents have been stagnant over the past year.
well my rent is cheaper than the place I was renting previously....and its larger.
ReplyDeleteTo top it off, I even bartered him down $200 a month from the advertised price.
I actually cant wait until this lease is up, so I can look for somewhere cheaper here in potomac.
You guys can quote statistics from reports all you want, I only care about my life....and things ARE getting cheaper for me. Why do you guys who bought a home in so called "immuiton" care what renters in MoCo pay? Why argue it at all? Its like fat balding white man who has never been laid (not counting prostitutes of course)fighting against prochoice or gay marriage.
Agree with above. You see apartments giving away one month free in NW DC now. Vacancies everywhere. Eyeballing alone, prices look cheaper. Of course, a lot of the vacancies are basement dumps since everyone is upgrading. So the price of living in a decent place may still be competitive.
ReplyDeleteHave you seen the DC Rental Market. Frankly, I feel the market is being manipulated..and I will tell you why. There are SO MANY AVAILABLE UNITS...and the prices are so high. The prices of 1 BR apartments in DuPont Circle, Capitol Hill and Columbia Heights are really not all that far apart if you look to live in a large building? Why? Because so many of these buildings are run by a handful of management companies who publish books about the buildings..and are essentially colluding..There are vacancies everywhere and the prices dont come down - and you cant negotiate - they say NO.
ReplyDelete