How much does your rent go up this year?
Last year, when I first moved to my apartment in belltown, my rent was 1120 plus parking. Six months ago, when I had to renew my lease, I thought the housing meltdown will bring the rent down in early 2008. For this reason, I only signed another 6 months with the leasing company. And the new rate was 1225.... an amazing 9.3% growth in just 6 month.
Fast forward to this month..... It's about time to renew my lease again... My landlord sent me a notice telling me the new rate will be 1340(9.8% increase).
I was shocked that my rent goes up 20% in just 12 months, also I did some survey and found out most apartments in belltown raise their rate by more than 10% YTY.
It looks like the housing meltdown also hurt us renters. Because of the condo-conversion, there are fewer apartments available in the Seattle. And this situation will not change until early 2009.
Last time, when I checked the governmental reports, it said the rent only expected to go up 8% this year. My fellow renters, do you agree with government's analysis?
Fast forward to this month..... It's about time to renew my lease again... My landlord sent me a notice telling me the new rate will be 1340(9.8% increase).
I was shocked that my rent goes up 20% in just 12 months, also I did some survey and found out most apartments in belltown raise their rate by more than 10% YTY.
It looks like the housing meltdown also hurt us renters. Because of the condo-conversion, there are fewer apartments available in the Seattle. And this situation will not change until early 2009.
Last time, when I checked the governmental reports, it said the rent only expected to go up 8% this year. My fellow renters, do you agree with government's analysis?
Comments
I remember about 5 years ago when I first moved to the area and was looking at renting in Bellevue the going rate for a decent 2 bed apartment was around $900/mo (in the Factorial area). Now I'm seeing rents in the same buildings I was looking at 5 years ago at around $1400/mo. There will always be some people on this blog who will chime in with something like "oh, my rent only went up 3% last year" or "my rent actually went down...renting is so smart." But it seems the truth for most people is that rents have gone up substantially in the past several years and are not about to go down any time soon.
To keep my rent from going up, I'm going to buy a house, so it can drop 30% in value over the next couple of years - at least I won't be throwing my money away on rent!
I think that Belltown rents will drop, once all those genius Belltown condo "investors" figure out that they can't sell their condo this year for anything close to their wishing price, and put their condo out for rent, as they wait for the 2009 "spring bounce".
This is actually a cycle we've seen in markets farther along than Seattle - rents rise at the top of the RE market, because flippers and other housing speculators are buying housing and holding it off the rental market. Rents drop as the sellers can't get their wishing prices and put the housing on the rental market (after all, they aren't going to "give their house away"). The final stage is when the price of distressed housing falls to the point where the cost of owning is equivalent to the cost of renting, plus a small premium for expected appreciation.
I had been paying $1220 (which is what it has been for the last year after going up $20 after the first year of my lease) with parking included and will now be paying $1175 with parking included.
Remember this chart? The last dot on the rent line is 2006 when rents were under priced. 2007 was up 8% from that. My math says we are pretty close to being back on the trend line
$1450 per month for a 4 bedroom, 3 story house. I'm sure this is not the norm, but there is very little incentive to move at this point.
I signed a 2 year lease in mid 2007.
550-600k new concrete & steel construction 1BR downtown for $1667 that includes parking, WSG &Gas for cooking and heating (gas fireplace, gas cooktop, gas oven).
Utilities have been averaging $15/mo total.
Mid 2009 will be interesting.
Should I add that a comparable condo in this neighborhood would cost over $1600 a month? Plus another $300 for HOA dues?
Oh, but I don't have granite countertops -- oh, the horror! To think, I'm only banking $1100 a month, and I've had to sacrifice granite countertops! :roll:
Can you tell me which neighborhood is it? I have to start my apartment searching this weekend. Any information will be useful.
By the way, last weekend, I visited the Ballard main street. It looks like developers build way to many condo in that area and is going to double(even triple) the total population there. And definitely, this is going to change Ballard totally. I am wondering, will Ballard become next Capital Hill?
I don't wish it on anybody...I moved around so much growing up as a kid...I think it would suck to have your rents raised and having to make a move...just as sucky to have your property taxes increased too but I'm not sure how the two would compare dollar to dollar.
It's all part of the game. Part of life is being flexible to move. If you're not a flexible person, price in whatever premium you're willing to pay to not move. Same goes for tax increases. If taxes go up, either pay it or move.
If "needing to move" is that traumatic, buy a few acres in the middle of nowhere.
I hear what you are saying about negotiations. It is hard to get all of the facts in a short description like that, so it might not be so simple as deciding to play hardball with your landlord as you suggest. The acronym BATNA (Best alternative To an Negotiated Agreement) may seem like a hokey thing you only use in a class about negotiations, but it is a very important concept. As in... when negotiating, always try to find the other party's BATNA while not revealing your own.
Landlord's BATNA (so far as I understood it): take 30 days to find a new tenant who is willing to pay the higher rent. Cost of Craigslist add... $0. Cost of driving to hold an open house where no fewer than 10 people show up... $3.75 for gas and the opportunity cost of missing a playoff football game on TV. Open house participation suggests young couples are excited about a nice upstairs 1BR unit with a killer view. There is value in having a known tenant move in from downstairs (me), but that guy is being a pain in the ass trying to talk down the rent and otherwise playing hardball. Odds of not being able to rent the place out during the 30 days before the old tenant moves out... 5%.
My BATNA: Refuse to pay the rent increase and move. Try to find a $1050 1BR unit in big house north of Lake Union with a killer view of downtown. Cost of moving truck... $40 after gas. Assume $8 cost for the additional labor since Jason will help me move if i buy him a Paseo sandwich (everyone should try one someday). Unknown cost of no longer being able to woo women with the aforementioned killer view... it is hard enough getting them home, but I might not be able to get them to stay without the view.
As you can see, the landlord's BATNA placed him in a better bargaining position... and he won. You will note that my BATNA did NOT include being forced to buy now or be priced out forever. I don't like losing to my idiot landlord, but I am still happy to pay an extra $100 a month and watch what happens to the housing market... from a great balcony.
I just can't understand why these landlords are so stubborn, and are willing to go so many months without any income rather than just cut their asking rate. Of course, I don't know what the agreed rent finally was (they were asking $1800 for a 3 bed 2 bath). I pay $1575 for a slightly better property just a block away.
If they understood how the market works and looked at how much they are earning on their capital they would probably not own rentals. It is so surpirsing that they allow holding costs to eat their capital?
How about looking at condos or new apartment buildings? Try SLU, Eastlake or top of QA (http://www.edenhillseattle.com is almost ready). Magnolia is cheaper and quieter, but still easy access to downtown. Check out the south slope of QA along W. Olympic Pl, if you're lucky you can find a unit with a view (though parking around here is pretty tight).
Overall I'm seeing quite a selection on seattle.craigslist.org.
When I told her my rent goes up 20% in just 12 months, she replied
"In fact, your rent does not goes up as much as the market does. We are looking for a middle point for our renters"
urr.... are you telling me the market goes up 40% in the past year :shock: :shock:
Did you get 40% pay increase in the last year? At lease, I didn't...
They simply took my old rate and multiple by 1.098. !@#QWR@#2
You have to remember that owning rental properties is often a part of a much bigger financial and tax portfolio. If you have room on your taxes this year for another $20,000 in rental losses, waiting for the right tenant and lease is often financially beneficial.