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Apartment rent growth set to keep slowing this year
- cratermoon 4y ago"Rents are too damn high"
- britneybitch 4y agohttps://archive.ph/qHVsJ https://archive.ph/qHVsJ
- Fauntleroy 4y agoI'll believe it when I see it
- yamtaddle 4y agoActual headline, right now: Apartment Rent Growth Set to Keep Slowing This Year Not decrease—growth expected to slow. Not quite the same vibe as "Apartment vacancies are piling up".
- dustincoates 4y agoThose aren't necessarily in conflict, if, as per the article, new units were increasing at an even faster rate. E.g., > The biggest wave of new rental buildings in nearly four decades is expected to cut the pace of rent growth across the country.
- Sparkyte 4y agoOur population growth doesn't meet that it is because of artificial unavailability of apartments. A 2 month gap between each apartment as people move around because they either wanted to live somewhere else or got a job that paid more. This constant moving causes too many issues like increased cost of living, over hiring (bad company performance) and under hiring (good company performance) each feeding into each other. As the market stabilizes and companies don't rush to make the next battle royale and force massive pay increases because of the above it will stabilize or even plummet back to normal costs. HOWEVER it will cause more vacancies in jobs and more vacanies in apartments because there isn't this queue or artificial unavailability of a role or place to stay which eventually will causes the above to happen again.
- WoahNoun 4y agoIt's the lead sentence in the first paragraph. >Apartment vacancies are piling up. The biggest wave of new rental buildings in nearly four decades is expected to cut the pace of rent growth across the country.
- jacurtis 4y agoPer the article: > Now, many of those same places that shot up in price are seeing slides in demand and rents are going down. Between April and October of 2022, rents fell 3% in Las Vegas, 2% in Phoenix and 1% in Tampa, according to Apartment List. All three of those cities saw rents rise more than 30% during the preceding two years. > nearly half a million new apartment units—the most of any year since 1986—are expected to complete construction by the end of 2023. That will come after more than 400,000 units were completed during 2022...The coming increase in new apartments is most likely to affect rents at higher-end buildings, because there might not be enough people who make enough money to rent them, according to CoStar. > many housing economists don’t think job and wage growth will be strong enough to sustain much in the way of rent increases [in 2022] tl;dr Prices are going down in many of the hottest markets in the country. Vacancies are starting to happen and are expected to increase, particularly in higher-end apartments going into 2023.
- treeman79 4y agoMy area South, rent has shot up around 30-40%. Now I also know a number of people that got burned very badly by Covid tenants that stopped paying and it took 16 months to evict them.
- dashundchen 4y agoI've heard people blame rent increases on eviction moratoriums but that doesn't add up for me. The national eviction moratorium was only on federally funded properties for a very short period. Some states passed their own laws but most did not last over a year, especially in southern states where renter protection tends to be weak. Where would it take 16 months to evict a tenant for non-payment in the US?
- atdrummond 4y agoI’ve had it take nearly two years to evict in California. It requires a very motivated tenant but absolutely possible.
- listless 4y agoYikes. That is a an absolute nightmare for a landlord. Where I live, I can evict a tenant if they violate their rental agreement and they have 3 days to vacate.
- notch656c 4y agoHow on earth do you see a judge and get a judgement within 3 days? where I live you get a 3 days notice to leave if you want to avoid the judicial process, but you can stay and get your day in court in which case you'll be there significantly longer.
- listless 4y agoI don’t know. It’s brutal. You need an eviction from a judge, but it’s simple to get. You just apply with reason.
- altairprime 4y agoFound in HTML source code for the article contains this WSJ-provided summary in a description meta tag for Twitter, another possible source for this submission's headline: > "Apartment vacancies are piling up as a wave of new rental buildings are built, cutting the pace of rent growth across the country" (I agree that some improvement is desirable.)
- cma 4y agoIf it grows slower than inflation it may effectively decrease.
- deleted 4y ago[deleted]
- timerol 4y agoThat is a quote from the article - "Apartment vacancies are piling up." But no accompanying graphs or further discussion, other than that sentence itself.
- yamtaddle 4y ago> Otherwise please use the original title, unless it is misleading or linkbait; don't editorialize. I think this would have had a harder time making the front page with the title the site guidelines suggest should have been used.
- Sparkyte 4y agoCorrect the amount of apartments remain the same. The number of people moving around to new apartments dropped so the 2 month gap from a tenant moving out and into a new place disappears. This was what increased unavailability a constant queue of demand. Suddenly apartment costs will drop and cost of living will follow suit. This is a boon. The tech industry is what stirred this originally where businesses were not stabilizing in the wages for tech. People were forced to move to take a better offer and so it created an artificial inflation purely on the demand gaps. Now people are settled back in post covid and things are just too expensive to move around availability including jobs will skyrocket and the pay will rise too reproducing this exact cycle we just went through. It is a cooling off phase for now.
- msla 4y agoSounds like it's time for a market correction, and for the landlords to start doing more work: > “In 2021 and into early 2022 you could raise rents significantly without doing a lot to the property itself,” said Karlin Conklin, principal of apartment landlord Investors Management Group, which owns buildings in the Sunbelt and on the West Coast. “We don’t see that happening going forward.” Gotta spend money to make money. Time to lift themselves up by their bootstraps. Back in my day, landlords weren't lazy. That sounds like a problem these days.
- wellthisisgreat 4y ago> “In 2021 and into early 2022 you could raise rents significantly without doing a lot to the property itself,” said Karlin Conklin... scumbags
- ausbah 4y agorent seeking behavior by definition doesn't involve working
- deleted 4y ago[deleted]
- WoahNoun 4y agoBecause property management companies are colluding to raise rents even if it results in more vacancies. https://www.propublica.org/article/yieldstar-rent-increase-realpage-lawmakers-collusion https://www.propublica.org/article/yieldstar-rent-increase-r...
- deleted 4y ago[deleted]
- whimsicalism 4y agoThis is not a significant phenomenon driving rent increases. You make more money if you defect from this arrangement and real estate holdings remain diversified in America.
- davidw 4y agoPeople want a boogeyman so badly https://twitter.com/PEWilliams_/status/1610126249938092033 https://twitter.com/PEWilliams_/status/1610126249938092033
- LynxInLA 4y agoI may be misunderstanding the chart, but it says it misses cash offers on second home purchases. All-cash purchases are on the rise since 2008, so that seems like a pretty large segment that isn't represented.
- bell-cot 4y agoIf a landlord's vacancy rate is lower than the "don't defect" rent increase, then he makes more money by not defecting. Also - setting rent in a given market is a game that the same landlords play with each other, annually. Strategy is different in multi-round games. And - back in the 1990's, I knew a few residential landlords in a mid-sized college town. They clearly said that they got together annually, and decided how much to increase their rents.
- 4y ago
- andrew_ 4y agoI live in Tampa and rents are still going up. We're getting more people moving here monthly than any other city in Florida at the moment. (Doesn't help Forbes rated the city the best place to live this year, which I don't agree with, but the hype train is a thing) Well-priced housing is at a premium and moves extremely quickly. So-called Luxury housing is incredibly over-inflated, there's an abundance of it, and if you're desperate or just don't care about throwing money away, you can get in pretty easily because there are a lot of open units. We have an insane amount of new housing here that's gone up the last few years. Renting single-family homes continues to be bananas, with rent ~ $2 sq/ft in South Tampa. I'm paying $1.37 sq ft for a townhouse at the moment, and that was considered a steal when I started renting last year. > Now, many of those same places that shot up in price are seeing slides in demand and rents are going down. Between April and October of 2022, rents fell 3% in Las Vegas, 2% in Phoenix and 1% in Tampa. I sure haven't seen that 1% drop. If that's a true figure, I'd wager its the luxury unit companies slightly lowering.
- Sebguer 4y agoI lived in Tampa for ~10 years (South Tampa for ~6) before moving to Seattle in '19, and the explosion in prices since I left is absolutely insane. It was already overpriced, and now it's just absolutely unhinged. It's not even materially more affordable than Seattle when it comes to renting. I also can't imagine how people can rate it the best place to live, given the complete lack of public transit and awful road infrastructure.
- yamtaddle 4y agoHas something changed, or is Forbes taking bribes for that best-cities list? I mostly know Tampa as the Florida city that's useful in a joke when someone needs a widely-understood-to-be-terrible city in Florida.
- Firmwarrior 4y agoThat's interesting, I visited last year and it seemed OK. Everything was way cheaper than the SF Bay, it was clean and easy to drive around, plenty of variety for shopping and restaurants. Not as fancy as silicon valley, but being half the price made up for a lot What this thread really makes me think is that I need to look into moving back to Seattle.. if Seattle is still half the price of the Bay and only a short flight away, maybe I can find a decent job without too much of a pay cut, haha.
- user-extended 4y agoSo what? Let normal people suffer, rich people already have the land, and the rights, and the property. Who cares? What are they going to do, sleep in the streets? Some might, but most won't. Nobody cares.
- howmayiannoyyou 4y agoPretty much wrong in every respect. The property the "rich" rent to the "poor" is usually subject to a loan and loan covenants that require a certain spread (cap rate) so the loan can be serviced and the property maintained. That spread tightens when interest rates, labor and materials expenses increase. Think, inflation. 2 billion or so people were lifted from poverty the past 15 years, increasing consumption and driving global inflation. 15 years ago you were competing with less than 1/2 the number of people for, say, natural gas; and that was before Russia's gas exports were decimated by sanctions. Many tried to warn of inflation when USGOV stimulus rained down on US citizens & small businesses. With the election looming, nobody listened. Bottom-line... your elected leaders want to get reelected. They enact laws & policies that are inflationary because the body politic doesn't think long term, follow-on effects & is largely economically illiterate. You get the economy you deserve, not the one you want. Let the downvotes begin.
- alistairSH 4y agoDid the article headline change, or is it editorialized? Paywall, so can't read beyond the first paragraph, but it appears to be more about rents than vacancies (albeit the two are related).
- paxys 4y agoI'm inclined to distrust all WSJ reporting in this area considering how biased and agenda-driven their articles on remote work, employee productivity, "quiet quitting" etc. have been over the last couple years.
- gnomewrecker 4y agoWhat do you perceive to be their bias / agenda re: remote work? (Honest question).
- paxys 4y agoThey have a strong bias in favor of "establishment" viewpoints. Stuff like: Remote work will hurt your career (https://www.wsj.com/articles/think-working-from-home-wont-hurt-your-career-dont-be-so-sure-11654725511 https://www.wsj.com/articles/think-working-from-home-wont-hu...) "Productivity theater" and employees cheating (https://www.wsj.com/articles/your-boss-still-thinks-youre-faking-it-whenyoureworking-from-home-11666216953 https://www.wsj.com/articles/your-boss-still-thinks-youre-fa...) Remote work means American jobs will be outsourced to cheaper countries (https://www.wsj.com/podcasts/tech-news-briefing/tech-industry-warns-remote-work-could-hurt-us-competitiveness/3b571410-9a44-479d-a0e3-dd0d513f223f https://www.wsj.com/podcasts/tech-news-briefing/tech-industr...) It's hard to make a point with a handful of links, but if you read it regularly then the bias is pretty clear.
- FredPret 4y agoTheir readership skews older. I’ve seen 99.5+% of comments being anti-remote work when I was a subscriber.
- Sparkyte 4y agoLike jobs, queues/lines and other various things I have a philosophy that this is because vacancies get smaller and push the market costs up as people actively move or switch. If people decide not to switch their job or leave their apartment suddenly there are more demand and vacancies. Basically the constant shuffling of where people live or work significantly create artificial unavailability. For example it takes months for an apartment to be re-occuppied. One month to clean and move. One month to find a new tenant. Jobs are no different. This is why businesses sometimes over hire and then do mass layoffs. If both adequately were fulfilled we wouldn't see any issues and apartments could opperate at a tenable rate which benefit both complex and tenant. However because the demand in the jobs would increase since no artificial un/availability will be made the pay will grow in the more in-demand roles not fulfilled. When the jobs demand rises and the pay rises this cycle will start again. It is why businesses should try to retain talent so this process doesn't repeat and cause an economic collapse due to the rising cost of rent and living. Being tenable is important.
- readthenotes1 4y agoit has been a while since I have had to rent an apartment, but the flip time was usually a week for the cleaning, not 2 months. Apartments are always showing, and people have to give notice so the managers know what's coming availabile.
- darksaints 4y agoJust to put some context on this...there is a natural vacancy rate, which is defined as the vacancy rate at which owners and renters have roughly equal bargaining power, leading to roughly inflation-pegged rent growth. There are small variations from market to market, and different methodologies for measuring this rate, but economists have consistently estimated this natural vacancy rate to be around 8-10%. The vacancy rate for the full US is about 6%. Things are going in the right direction at least. But for some US cities, like Seattle, Portland, and Minneapolis, we're still a long ways away from reasonable.
- eli_gottlieb 4y ago>there is a natural vacancy rate, which is defined as the vacancy rate at which owners and renters have roughly equal bargaining power, leading to roughly inflation-pegged rent growth. That's not natural. That's just holding landlord profits constant.
- darksaints 4y agoIt is natural, the profits being held are just an (eventual) consequence of it. It reflects a minimum of total rent (econ definition, not financial definition) for both parties, which is an ideal state that is sought for efficiency.
- BirAdam 4y agoThis is why tent cities are springing up. Eventually, housing prices exceed the ability of people to pay, and demand drops. When demand drops, the only option is to either attempt to sell at a loss or lower the rent and accept the loss. Either way, the folks who bought at the top lose. For home buyers who are not looking to flip, this isn't as much of an issue. You have to live somewhere. For renters, they'll likely need to move to see the lower rate, since if you're already paying a large amount successfully the landlord isn't likely to lower _your_ rent.
- nostromo 4y agoIf you talk to people that work with the homeless, rent doesn't seem to be a driving factor. Rent of any amount would be too much for folks in tents because they are dealing with larger issues -- often substance abuse and mental illness. That said, there are certainly people who live with family or take on roommates that otherwise would prefer to live independently due to high rents. So it is an issue. But rents declining a bit, or even a lot, wouldn't put a dent in homelessness.
- atlasunshrugged 4y agoMy understanding from following a few economists on this topic is that rent is a major factor. Here's a Vox article talking about the correlation between rent and homelessness https://www.vox.com/the-goods/2018/12/14/18131047/homelessness-rent-burden-study https://www.vox.com/the-goods/2018/12/14/18131047/homelessne...
- prottog 4y agoI read the article and skimmed through the underlying paper; the authors of the latter are careful to note that they cannot establish a causal relationship. Interviews of homeless people, at least in some West Coast cities, indicate that drug addiction is perhaps the single biggest contributor to homelessness.
- atlasunshrugged 4y ago
- zachthewf 4y agoAre there any moonshot ideas that could dramatically (say 50%+) decrease the cost of rent? Including ideas that are probably-illegal but could see mass consumer adoption before they could be stopped (like Uber)?
- calvinmorrison 4y agoyes, allow for tenement housing. Works great for college dorms, reduces cost significantly.
- zachthewf 4y agoHow could this be implemented without a political breakthrough (which I think is probably impossible)?
- QuercusMax 4y agoThe answer is building more housing. That's all. No magic pill or silver bullet. Just build housing. Near where people work, ideally.
- zachthewf 4y agoI agree with you but the political/legal hurdles to doing this legally are substantial (it's basically impossible, or at least relatively uncontrollable). How might you do this without a legal breakthrough?
- hardtke 4y agoI honestly think this is no longer correct. Construction costs exceed the future value of the rental income stream for multifamily developments in most markets. Apparently the only projects that pencil out now are massive developments, which are hard to build in places where people work as they are already somewhat dense and don't have many empty fields. The cost of materials are going back to normal (with some exceptions) but the labor costs are increasing due to a shortage of workers. Construction costs could be slightly lowered by reducing the required quality of construction, but not by much.
- Beaver117 4y agoI predict we'll see violence against landlords if this continues. Too many people are without homes or being pushed out of their homes.