Estate and mortgageRenters Lose More Ground
In the vast majority of markets tracked by RealFacts, renters who didn"t lock in rents for the long term are now pinned squarely behind the eight ball with little room to maneuver.
Apartment rents have been rising for more than a year in most markets and second quarter numbers reveal landlords are tightening the vise as year-to-year rent increases get larger.
The only remaining "in" for renters, perhaps, are falling occupancy rates in select markets -- a limited and temporary condition.
Wherever possible, renters renewing contracts or moving in for the first time, especially those who plan to sit on the owner-occupied housing market fence for some time, should negotiate for the longest lease feasible. Concessions are rare as many landlords have shut the door on move-in bonuses.
In the second quarter 2007, all but one of the 29 major metros in RealFacts database reported annual rent growth, with 10 of the 29 metros reporting annual rent growth of more than 5 percent.
However, most metros, 20 of them, revealed year-over-year occupancy declines. That"s likely an ending trend as the rental market continues to absorb supply spilled over from unsold listings in the owner-occupied sector.
RealFacts keeps tabs on more than 12,000 rental communities of 100 units or more in metros in 15 states, most of them west of the Mississippi River, but also in Florida and Illinois.
The firm also keeps tabs on rental units by category, from studios, one-, two- and three-bedroom apartments to three- and four-bedroom town homes.
The big rental money makers were San Jose, CA, and Seattle, WA, both enjoying a 3.1 percent increase in rents from just the first to second quarter this year.
San Jose had the data base"s greatest average annual rent increase -- 11 percent. Seattle enjoyed a 9.9 percent average annual rate of rent increases.
RealFacts projected an annual rent growth of 12.4 percent for both cities if conditions continue, a likely scenario given the owner-occupied housing markets tighter money trend forcing more people to rent. Both metros also reported strong occupancy rates, 95 percent for Seattle and 97.3 for San Jose.
In average annual rent increases elsewhere, Austin, TX; Portland, OR; Salt Lake City, UT; and the California metros of Fresno, Los Angeles, Oxnard, San Diego and San Francisco all had annual rent increase of more than 5 percent.
The highest rents were also recorded in California with the Los Angeles market, averaging $1,589; Oxnard, averaging $1,525; San Jose, at $1,522; San Francisco, $1461 and San Diego, at $1,328, rounding out the top five. Seattle rents came in at $1,044 a month, on average.
RealFacts reported that occupancy slipped a bit in many markets, but levels remained strong with every major MSA enjoying occupancy rates of 91.5 percent or more. All 11 of the quarterly occupancy declines were less than 0.5 percent, further demonstrating the overall stability of the markets. Thirteen of the 20 annual occupancy declines were 1.5 percent or less.
Nineteen metros reported occupancy rates between 93 percent and 96 percent.
Tulsa, OK, stood out, posting a 4.7 occupancy gain for the quarter, pushing it"s rate up to 96.6 percent.
For annual occupancy growth, Salt Lake City was the leader with a 2 percent increase to 96 percent. Tulsa"s annual occupancy rate increase was second at 1.8 percent. San Jose, with a 97.3 percent occupancy rate, had the data base"s tightest rental market.