America's Apartment Industry Is Hot (And Renters Are Feeling the Heat)
Posted by Lee Cameron on Thursday, August 11th, 2011 at 10:13am.
Six years ago, apartment landlords watched helplessly as people left in droves to snatch up homes in the booming housing market. Many complexes converted to condos to try to get in on the craze, while others simply struggle through the lower rents and scarce tenants. No longer.
With income up and vacancy down, landlords now have something to rejoice about. Reports indicate that only 5.9% of apartments are vacant nationwide, and 1 million more renters entered the market over the last year.
Of course, not everybody is happy about this market shift. Renters - many of whom were already pummeled by the home ownership market - are now feeling the sting of higher rental costs. Many landlords, eager to take advantage of the situation, are raising rents - sometimes 5% or more - and have cut back on the incentives that they used to offer tenants. Don't expect a free month's rent just for signing a lease anymore, those days are gone.
If there's anything that may interrupt the landlords' reveling, it's the numerous new constructions on the horizon. Builders have seen the increase in the rental market and are finally starting to build new rental communities to match the demand. With a higher inventory, and new competition, many landlords will be forced to lower prices once again. However, with demand at a record high and many new communities still months or years away, change will likely be coming slowly.
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