Rents Rising, But at a Slower Pace
Rents were up for the third consecutive year in 2012 and are forecasted to rise again this year, according to MPF Research.
Apartments rents increased 3 percent in 2012, a slower pace than in 2011 where rents rose 4.8 percent. The historical norm for the past two decades in rental increases is 2.5 percent per year.
According to MPF, many property owners weren’t as aggressive in asking for higher rents in 2012 as they were in recent years.
“Many on the operations side of the apartment industry have focused on sustaining their very tight occupancy levels during a period when job growth and new household formation have been fairly sluggish at the same time that renter movement has begun to inch up from the unusually low levels experienced in the previous few years,” says Greg Willet, MPF Research vice president.
The highest priced rental markets continue to be in the San Francisco Bay Area, where rents rose the most in 2012.
The following were the metros with the highest rent increases in 2012:
- San Francisco: 8 percent
- San Jose: 7.7 percent
- Oakland: 7.1 percent
- Denver-Boulder: 5.9 percent
- Nashville: 5.1 percent
- New York: 5.1 percent
- Houston: 4.8 percent
- Charlotte: 4.6 percent
- Portland: 4.4 percent
- Seattle-Tacoma: 4.3 percent