Renters Rejoice as Apartments Cost Less
Has there ever been a better renter’s market than what exists today? Almost certainly not. Thanks to a general state of economic blah, renters are finding generous and previously unheard of offers and concessions to entice them into moving into new apartment digs.
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What kinds of offers and incentives are renters being offered these days? How about up to 6 months of free rent? How about flat screen TV’s? How about reduced monthly rents? How about much looser credit application standards? And on and on. Talk about move in specials. Renters are rejoicing.
According to MPF Research, during 2009, average rents fell 3.5 percent – a record drop. Rents are expected to drop at least another 2 percent in 2010. While those in the apartment rental industry would say that they have never seen things worse, renters would agree that on their side of the fence things have never been better. Those who could not afford to rent fancier digs in the past now can. Neighborhoods and buildings that were once economically out of reach now seemingly have their doors wide open.
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Vacancies nationwide are up dramatically since 2007. That year, rental vacancies were at 4.8 percent. Today, the rental apartment vacancy rate stands at 7.8 percent. Much of the high vacancy rate can be directly attributed to the weak economy, and in particular the 10 percent unemployment rate. Many people who have lost their jobs during the great recession have sought out alternate living arrangements while they regroup.
Another factor contributing to the high apartment vacancy rate is the fact that so many homeowners now find themselves “underwater”, paying mortgages on homes that are now worth less than the mortgage in which they are paying. These homeowners are in many cases renting out their homes while they wait for the economy and the housing market to rebound.
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