The Rental Real Estate Outlook for 2007
February 23, 2007
Rents are expected to go up in 2007 - for the third year in a row. The increase is projected to be five percent this year, for a 14 percent total increase since 2004, according to a report by the national brokerage firm Marcus & Millichap. That compares to a four percent increase in pay over the same period, adjusted for inflation.
Marcus & Millichap says this situation will make housing more difficult to find, especially in the coastal cities. They predict the trend will continue for another three years.
From 2000 to 2004, landlords couldn't raise rents, USA Today said, because tenants were leaving to buy houses or condos. To feed that buying frenzy, about 300,000 apartments were converted to condos in the past three years. Now, even with 92,000 new rental units this year, there's still not enough stock to meet the rising demand.
One of the worst locations for renters is New York City , where rents have increased seven percent in the last year.
The national median rent will be $943 a month, which is 60 percent of the median mortgage payment of $1,566.
Renters will get a break in Miami, Las Vegas, and San Diego, where investors bought up thousands of condos hoping to flip them. Since the market faltered, many of those investors will need to drop rents to help them pay expenses or will be forced to sell at steep discounts.
posted by M. Masterson @ 5:05 PM,
2 Comments:
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At 12:13 AM,
halmac3 said...
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Michael,
I love your writing, but I don't like your two-line RSS feeds. It's generally not enough to get me hooked to read on. Share more, particularly 'the hook'.
People get tired of self-serving blog posts. One reason people read blogs is so they can go somewhere else. Use links in your blog posts to take us elsewhere.
One last item. I'd really like to write you rather than leaving a comment. Your RSS feed doesn't include a real sender or return email address. That's just bad form.
Hal -
At 1:37 PM,
Brian said...
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Hi Michael,
Interesting article...as a soon to be landlord, I was wondering about how much I should raise rent each year. I had assumed making it just 6% per year and building this into the contract from day 1. I have a suspicion that many landlords just plain forget to raise rents regularly, and I think if its in the contract up front it comes as less of a shock to the renter to stay on good terms
Brian
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