In the second quarter of the year 2012, apartment rents in the United States were extremely expensive. It was reported that vacancies were very low and that rents were higher than before the economic crisis. The average vacancy rate in the United State was 4.7%. Specialists say that there hasn’t been such a low score since the year 2001. Additionally, current asking rents are almost $1,000 per month. They increased by 1% since the first quarter and they are higher than in 2007. There are some special offers, like free rent months, that are designed to attract the tenants. Still, the average rent is growing quickly and inevitably.
It has been said rents and their improvement are invasive. Cities like Knoxville and Providence that are not known for their renting market have experienced a high increase on rents. The landlords in these areas felt the need to raise the rents so as to be in accordance with the rest of the market. These cities located in Tennessee and Rhode Island had an increase on rent of 0.7%. This is the smallest rise, but it’s still significant. The most serious aspect is that there was no decline in any area. In the entire country, rents increased by 2% per year.
Dwellers living in apartments have to pay the highest rents since 2009. There are numerous individuals who want a home, but have no money to buy one or don’t meet the lending conditions to obtain a mortgage. That’s why they look for rentals. Housing brokers and landlords have sensed this need and they are continuously increasing rental prices. Also, more and more people relocate in small urban areas, because there are no new constructions.
Rental prices have also increased because of younger generations who are looking for apartments in big cities like San Francisco and New York. Here, job markets are growing and they have much more opportunities. Most youngsters are not willing to buy a home. Ownership is cheaper than renting, but young professionals don’t want to reside in the suburbs. The older generations believed in home ownership. The younger ones are more focused on jobs and city lifestyle.
All these factors have helped the American apartment market have the best year in the last decade. This fact was favorable for landlords like AvalonBay Communities, UDR Inc, Post Properties Inc and Equity Residential. All these companies own numerous high-end apartments in the large metros.
During the second quarter of the year, the expensive and dense rental market in the city of New York became more affordable. For example, vacancies increased by a small rate of 0.2%. However, the vacancy rate is still 2.2%, making New York the tightest and the most expensive market in the United States. In the second quarter the rents in New York City rose by 1.7% as compared to the first quarter and by 3.9% as compared to 2011. The average rent is almost $3,000. The next on the list is San Francisco, with an average rent of $2,000. Other sizeable gains were observed in markets such as Denver, Boston and Seattle.
