Apartment Rental News Update: First Rent Decline in 5 Years
Reis, Inc, a trusted provider of commercial and residential real estate analysis, last week reported that rents had declined for the first time in over 5 years. In the last quarter of 2008, asking rents fell .1 percent to $1,052 and effective rents fell .4 percent to $996.
Renters across the nation have been unwilling to move into more expensive apartments with so much trepidation surrounding the future of the economy. Escalating unemployment rates and payroll declines have also contributed to the reduced apartment rents.
According to the U.S. Bureau of Labor Statistics' Employment Situation Summary for December, the number of unemployed persons increased by 632,000 to 11.1 million, which pushed the unemployment rate up to 7.2 percent. The number of unemployed increased by 3.6 million from a year ago, when the recession began. The largest decreases in employment came from the construction and manufacturing sectors, which had losses of 2.97 percent and 2.29 percent, respectively.
Below is a chart from the above-linked study comparing employment figures from Q3 and Q4. The Only increases were in Education and Health Services and of course, Government.
Vacancy rates also rose to 6.6 percent from 5.7 percent a year ago. Victor Calanog, Director of research at Reis said, “The quantity of rental apartments might not be suffering as much, but the price paid by households to occupy those rental units is buckling under the strain, with landlords lowering asking rents and raising the amount of concessions they are willing to provide."
With rents falling and vacancy rates rising, landlords and apartment management companies need to do the most effective job they can at reaching potential renters. This means getting the most for your advertising dollars and being able to effectively track lead data. For more information on how we can help you optimize your lead conversion visit http://www.mynewplace.com/managers.
For the apartment managers out there, have you begun to “sweeten the pot" to convert leads by offering special deals?
For renters, have you begun to see better deals in the neighborhoods that you always wanted to live in? Looks like now is a good time to start your apartment search.
You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
One Response to “Apartment Rental News Update: First Rent Decline in 5 Years"
Leave a Reply
January 15th, 2009 at 3:23 am
Hello Matt DiChiara,
Same here in Canada, as per Canada Mortgage and Housing Corporation rental housing has slipped into a much deeper crisis due to recession. The national rental vacancy rate has dropped by a staggering 15% over the past year down to a critically low 2.2% – the lowest level in six years. but i think for renters, it's a good time to start your apartment search.