A week ago, I blogged no the increase we are seeing in the local rental market.
Taking advantage of an increase in home owners-turned-tenants, apartment landlords are raising their rents and expect to continue to do so.
During the first quarter, monthly apartment asking rents increased 2.2 percent year-over-year, reaching an average of $1,070, according to Reis, a property research firm.
Vacancies are at lows and developers are trying to rush projects of multifamily housing to meet the increased demand from renters, but continued constraints on lending has put the brakes on many projects, particularly in smaller markets.
"I’m optimistic about the multifamily sector, certainly for the next two years," Kevin Thorpe, chief economist at Cassidy Turley, a commercial property brokerage, told Investor’s Business Daily. "We’ve entered a period of sustained rent growth.
The reason behind analysts’ optimism: Young professionals are increasingly turning to renting and more than 3 million former home owners, who have been displaced by foreclosures or short sales, are turning into renters.
Demand for single-family home rentals is increasing too, according to CoreLogic. A four-month supply of single-family homes is now available for rent, which is down from five months a year ago, according to CoreLogic data.
Source: “Rents Rise as Apartments See Demand,” Investor’s Business Daily (June 7, 2012)