Rents Continue to Rise
According to a recent article in the Wall Street Journal, new apartment construction now accounts for 28% of all new builds. This is the result of a continuing shift toward renting due to current economic and financial conditions. Vacancies among rental properties are at their lowest rate since 2002, creating a landlord’s market. Average rents increased in all 82 markets tracked by Reis Inc. and reached record levels in 74 of those markets, including Miami, Seattle, San Diego, Chicago and Baltimore. The biggest rent increase of the second quarter was in New York City, where the average rose to $2,935 per month. Developers are racing to deliver new apartment rental inventory in hot markets including Washington D.C. and Seattle and home builders have begun marketing affordable single family home options to renters. If they are successful on both fronts, it could result in too many units flooding the market and landlords will, once again, be forced to offer concessions to fill units.