ApartmentList released results of a survey they conducted recently and it shows that rents for Triad apartment are up year-over-year, but the Triad still trails other NC metro areas in rent rates. The Greensboro News & Record picked up the story:
Despite the growth in prices compared with last year, however, Greensboro offers some of the most affordable apartments in the state.
The median rent for a two-bedroom apartment in Greensboro is $800, making it seventh in the state compared with Asheville’s median rent of $1,210.
Median rent for a one-bedroom apartment in Greensboro is $690, according to the survey.
In High Point, median rent for a two-bedroom apartment is $820 and $680 for a one-bedroom.
And in Winston-Salem, the median for a two-bedroom apartment is $750. No information was reported for a one-bedroom apartment.
From the Wall Street Journal:
After six years of rising apartment rents in U.S. cities, investors from all corners of the real-estate industry are piling into new projects in a bet the boom still has a long way to run.
Over the next three years, developers are expected to build almost 1 million apartments in the U.S., more than the nearly 900,000 constructed over the previous three, according to researcher Axiometrics Inc.
In 2014, multifamily rental construction reached 328,000 units, its highest in nearly 30 years, according to an analysis of U.S. Census data by Jed Kolko, a senior fellow at the Terner Center for Housing Innovation at the University of California, Berkeley.
The main lure for investors: rising rents. Average rents nationwide rose 4.6% in 2015, the biggest gain since before the recession, according to real-estate researcher Reis Inc. Rents have increased by more than 20% since the beginning of 2010. Most economists expect 2016 to be another strong year. The average monthly U.S. apartment rent now stands at nearly $1,180, up from about $1,125 a year ago, according to Reis.
Yep, rents are up across the US, but the Triad is still affordable by comparison. According to Real Data’s latest report, average rent in the Triad was $760 in Sep, 2015 which was up from $728 a year earlier. Same could be said for comparing development in the Triad to the rest of the country: the Triad is definitely seeing some apartments built, but not at the same rate as many of the major metro areas.
Today’s Wall Street Journal has an article about rising apartment rents in the US:
And with vacancy levels falling, rents appear poised for further growth, according to Reis, which said the rental vacancy rate fell to 4% in the first quarter, down from 4.2% in the fourth quarter and half the level in 2009.
“Rents are at a higher base and still growing,” said Ryan Severino, an economist at Reis. “They will likely keep growing for the next few years.”
Rental pressure has been building for years, as rising demand has run into an undersupply of apartments. With employment rising slowly but steadily, more young people are forming households, usually by leaving their parents’ residences or breaking off from groups of roommates.
In the Triad rents have been projected to grow and vacancies to fall as well, but not as much as the national average. In it’s Fall 2013 report Real Data projected the Triad’s vacancy rate to approach 6% and rent to increase 2-3% in 2014. Thus the market is strong for the Triad relative to its past performance, but still lags behind other markets throughout the US.
From an article in the Oct 1 Wall Street Journal:
The average monthly rent in the third quarter was $1,073, up 1% from the prior quarter, the largest quarterly gain in a year, according to a report to be released Tuesday by Reis Inc., a real-estate research firm. Compared with the third quarter a year ago, average monthly rent was up 3%. None of the 79 markets tracked by Reis saw rents fall.
The rental increases were stronger than industry watchers expected and represent a turnaround from the past several quarters when it appeared that rent growth was slowing, reflecting falling demand for apartments as more families decided to buy homes. But as mortgage rates jumped over the summer, following big increases in home prices, the rising cost of homeownership has priced many families out of the housing market.
However, the party won’t last forever:
But there’s another reason why some expect the rent increases to slow: a flood of new supply on the horizon. Some 170,000 new units could hit the country’s largest 54 metropolitan markets this year—about 120,000 have already been finished—followed by 190,000 in 2014 and 300,000 more units in 2015-16, according to Luis Mejia, director of multifamily research for CoStar Group, a real-estate data firm. “We see a lot of supply coming, no doubt about it,” he said. “But, younger people are renting longer than previous generations.…There is the notion that homeownership will come, but will come later in life, not as quickly as it was before the recession.”