We have all heard about the sad state of the US housing market thanks to the subprime driven credit crisis. However, now the rental market is starting to feel the effects of this as less people buy and instead choose or have to rent. This is feeding the philosophy that when times are bad, the rich get even richer. So all those landlords who own property to rent are cheering as they see rents go up, by double digits in some areas. Rents, in fact, are accelerating in most 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 (see the table below for the median rents by metro area)
I got to experience the rising rents phenomenon first hand when my property manager informed me that the landlord wants to increase my rent and to sign a 1 year lease at the higher rental rate. The expected rent increase is about $80 p/month, which works out to almost $1000 yearly. Unfortunately, the cost and hassle of moving will be much more than this so I will have to most likely accept this increase. In the area I live, buying a house is still more expensive than renting, but the way things are going and despite poor market conditions I will start my house search this summer. Like a number of renters who can afford to buy, I am just waiting for the market to stabilize before I commit to what will probably be the biggest purchase in my life.
Is your rent above or below average for your area? Here are the latest median rents across 12 major US 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 (up 14.6% from last year)
– Seattle: $1,211 (up 10.3% from last year)
– Washington D.C.: $1,687 (up 5% from last year)
– All metro areas: $1,368