Rents Coming Down Soon
I'm sure you are all aware of the miriad of stories nationwide about what the excess supply of housing units is doing to the rental market.
It's killing it - and the same thing will happen here once we join the other 99% of the USA.
Here is a snippet from HBB from Tampa, my hometown:
While rents are finally back to where they were here in 1999, don't expect them to continue to climb much in the next 12 months.
Once the lumps figure out that Seattle isn't special and inventory hits all time new highs, guess what that means in terms of rentals? Since the newspaper has reported that our market is tighter DUE to condo conversions, what will they report once those conversions repartment?
It's killing it - and the same thing will happen here once we join the other 99% of the USA.
Here is a snippet from HBB from Tampa, my hometown:
The St Petersburg Times reports from Florida. "Last year, New Tampa real estate agent Sabrina Westenbarger sensed that home buyers were disappearing. She branched into managing rental properties. Real estate investor Rob Duncan sensed the same trend. And in Pasco County, Betsy Morgan has seen accounts double in the past two years in her office in Trinity."
"All are profiting in the hangover following the homebuilding boom. All are signing up clients who need to rent their houses, townhouses and condos because they cannot sell them in an overbuilt housing market."
"'Now there are more than just intentional investors,' says Morgan, who has worked in residential property management for 23 years. 'They're what I call the accidental landlords. They're not always the happiest or most knowledgeable of landlords.'"
"Yet, they collectively own a flood of homes for rent."
"Over the past three years as the number of owner-occupied dwellings around Tampa Bay increased 5 percent, the dwellings with tenants, or needing them, rose 32 percent. In Hillsborough County, that included an increase of nearly 30, 000 properties whose owners live elsewhere."
While rents are finally back to where they were here in 1999, don't expect them to continue to climb much in the next 12 months.
Once the lumps figure out that Seattle isn't special and inventory hits all time new highs, guess what that means in terms of rentals? Since the newspaper has reported that our market is tighter DUE to condo conversions, what will they report once those conversions repartment?
Comments
I don't see rents coming down yet. They spiked up in just the past few months. What I am seeing on the North End is a lot more $$ for less. The rare nice place for a reasonable amount gets snapped up in record time. My anecdotal observations show rental increases of $100 -$200 across the board for studio to 2 BDs, and you are lucky if you get anything with that. A lot of places are gouging on any secure parking too, adding $50-$80 a month.
Most landlords WANT to lock you into at least a year lease, and often TWO, because I sense they know there won't get the same amount next year. It's not common to see month-to-month rentals right now.
I am not THAT picky, but most of what I am seeing is a notch or two DOWN from what I have, and two notches UP from my current rent.
the market is a bit bimodal today, IMHO.
You have REITs that have paid huge $ for low cap rates on buildings, and they need to raise rents to get that back. There has been a ton of money going into REITs over the past 4-5 years, and they have bid apartment values up to the stratosphere. It's like VC money in 2000. There's tons of it, but it's not "smart money"
then you have individuals who have bought properties that they thought they could resell for big $ - but are facing flat returns right now. In seattle most think they should just sit tight. They tend to be less aggressive on rents. Plus, if they are serial flippers, many want to buy/hold for 2 years to avoid taxes
Anyone have any advice on what I should look for?
Anyone have any leads on a good but cheap rental not too far from Microsoft on the Eastside?
We've been debating putting everything into storage and then living in a cheap hotel for a few months to get out of the summer market for our lease.
Any predictions on how long it is going to take for rents to fall?
The second factor is the number of people renting. THose seeing a tighter rental market claim people priced out of buying will defer purchasing or be unable to purhase and will rent. THese numbers will excede the available supply of rentals driving up rental prices.
I don't think anyone can claim to know which of these two forces will dominate and exactly how the supply and demand curves will shift in Seattle. Each region is different. For eaxample in SFO, rental prices are back to dot bomb day levels. In LA, arguable the epicenter of the housing bubble, my landlord increased my rent by 12%, providing me with the motivation I needed to buy a place.
I don't see a flood of people moving to Seattle anytime soon. Moving out - sure. When places become unaffordable, people leave. San Diego has sustained something like 30-35K exodus each year since 2003 (round numbers)
When recession hits hard, I doubt Seattle has the corporate diversity to handle a substantial downturn.
Again, more units available, cheaper rent.