I listed my place on Craig’s list last Sunday, and have had 5 showings so far (no applications yet…) At each of the first showings, I introduced myself as the owner, described the remodeling work that’s been done to the apartment, mentioned that I had been living there (thus facilitating the remodeling), and was moving out. If they asked why I was moving, I told them I was going to be living with my boyfriend, otherwise I would be staying, it’s a great apartment. I realized, though, after a couple of showings, that this situation might actually be weirding some of them out…
It’s been all over the news lately: rents are declining. The foreclosure crisis is creating more and more vacancies; many people who would otherwise sell their homes are forced into becoming landlords (renting out their properties in lieu of selling at a loss), and overconstruction in the condo market has caused more supply than demand. Some articles claim that falling rents are the sign of something even worse: deflation. I’m no economist, but I know enough to understand that deflation is a very, very bad thing.
It wasn’t long ago that it was the landlords offering incentives. With the housing market as soft as it is, renting has been looking more attractive every day. Where I am, landlords have stopped offering (as many) incentives, and rents have edged up, while vacancy rates have gone down. While a few years ago, everyone I knew was in a mad dash to become homeowners, the situation is now the reverse.
I just signed my tenants into another one-year lease, so I don’t have firsthand knowledge of what the rental market is like at this moment, but I’m reading that although rents have inched a bit higher in the past year, the vacancy rate is at a two year high (6.1% nationally). How would this happen? Although renting is looking more attractive to people, there are a lot of people who bought (primarily condos) speculatively, hoping to do a buy-and-hold strategy and make some easy money. Unfortunately, the housing market didn’t do what they predicted (went down, or at best flat instead of skyrocketing), and they’re left either selling at a loss, or renting. Adding more stock to the rental market, driving vacancies up (and preventing rents from increasing enough to keep up with rising inflation, property taxes, insurance costs, etc.)
I had a much easier time renting out my duplex apartment last April than I have the previous few times… I had chalked it up to better advertising, cosmetic improvements, and luck. According to an article at hotpads.com, however, perhaps there was something bigger at work — rental vacancy rates (and rents) are turning around, coming out of the five year slump they’ve been in.