Experts Say That You Should Brace Yourself for an Increase in Rent Once Again

[Purveyor]

Did you know that the average US rent has increased 14% to $1,124 since the start of 2010? This is according to a research conducted by a leading commercial property tracker, Reis Inc. That’s twice the rise in home prices in the US over the same period of time and 4% faster than inflation.

The main reason why rent is going up is because of the increase in the number of people looking for apartments to rent. Today, many young people are finding jobs and moving out of their parent’s houses. In light of this, most of the new apartments that have been put up are targeting affluent tenants and you will pay more than the average rent.

This is very true, especially is cities where new buildings are being put up in urban core areas. That means that the investors need to recover higher land and incur the development costs. According to Marcus & Millicap, rents have been increasing by 5% every year since 2010 in Denver. And of the 9,400 new apartments that were added in 2014, 23% are located in urban core areas.

With many people looking for apartments, it has become a challenge for tenants to negotiate with the landlords or get incentives such as free month’s rent. Here are reasons as to why you should expect rent to go up:

• More jobs means higher competition

Many workers who lost their jobs during the last recession move in with their parents or roommates. By 2012, about 32% of US adults were living with family members or relatives. Today, more than 2.8 million Americans have jobs. That means that more people are now moving out looking for apartments to rent. This has greatly contributed to the high rents.

more...

http://www.investornewswire.com/experts-say-that-you-brace-yourself-for-an-increase-in-rent-once-again/6368/

[geek tragedy]

1. tighter mortgage credit rules also make it harder for people to buy. nt

[1StrongBlackMan]

3. But more, there has been a cultural shift ...

the millennial generation's world is different from that of the boomers ... the last generation to see home ownership as a part of the American dream to which to aspire.

Boomers grew up watching our parents purchase homes ... because they could. Jobs were fairly stable and job-hopping was rare. You went got a job and were fairly certain that, barring a promotion, you would stay in that company for the next 10-20 years, if not until retirement.

That changed in the 1980's with the "down-sizing" and the breaking of the company/employee pact, i.e., work hard and you have a place here; millennials saw that, too. No more, did the millennials hang onto the loyalty, that the company did not hold for them. Millenials became far more mobile, and likely to chase the bigger. better employment deal ... And what was once an anchor tying you to the community, became an anchor holding you in place.

Now, my 20 year old daughter does not even entertain the notion of being a home owner, unless it's a vacation home in the mountains.

[geek tragedy]

4. young people rule out a bunch of things

they wind up doing later.

At some point reality outweighs possibility.

[Chan790]

5. I wouldn't be so sure...

my peers from college are now generally highly affluent and employed in professional fields. They, for the most part, could be homeowners...most aren't and never will be. We're urban, rental-oriented, transit-oriented and never going back to the American nightmare of home-ownership or car-culture.

That shit is for suckers. That's the new reality. You've got to be a fool to want those things.

[geek tragedy]

6. You and your friends are all paying mortgages.

Problem is you're paying your landlord's mortgage. She/he/it gets the equity and the tax benefit.

We bought our 2br condo (with backyard) 5 years ago. Our mortgage payment plus building fees minus the tax savings are less than what the hipsters down the street pay to rent a studio half the size with a puny balcony.

And our mortgage payment will never go up, whereas our equity will increase every year (up +85% since we bought at the bottom of the market).

And we get to change stuff we don't like in the apartment.

But we're fools because freedom.

[Chan790]

7. We don't care.

Have you not heard my "My motherfucking income taxes are too fucking low" rant? Do you think I care about tax-benefits or equity? I care about the fact that I'm not responsible for fixing shit when it breaks or maintaining the property...the conveniences of it are worth paying his mortgage.

[geek tragedy]

8. Check back in 15 years. nt

[Sparhawk60]

11. How True

After 15 years of paying $750/month for my 4 bedroom house (cheaper than renting one) I have just under $80K in equity. When I do sell, a big chunk of my new house will already be paid for when I sell my current house. What do you have after paying rent for 15-20 years? Your landlord's thanks for putting his kids through collage. lol

[geek tragedy]

13. At some point, people start dreaming about the day

when they can stop working for other people and do whatever they want. Then stuff like tax deductions and equity matter a lot.

[starroute]

9. Reality is outweighing possibility -- but it's not your reality

Reality these days is student loans that take twenty years to pay off.

Reality is well-paying jobs that vanish overnight, making a mortgage a liability rather than an advantage.

Reality is a large number of people who got burned once with underwater properties and unaffordable balloon mortgages and aren't likely to go that way again.

The World War II generation bought houses in the suburbs because government policies made it easy. The Boomers did the same because it was what they'd seen their parents doing and it still made financial sense, more or less.

But the Gen X-ers started to feel the pinch, and the Millennials are rightly wary.

That's reality.

[geek tragedy]

10. Reality is also people get married, have kids,

and tire of moving.

Renting vs owning is an economic decision. And both have risk. Renting has more risk, since its risk--rent that never stops rising--is inevitable rather than possible.

Housing prices do go down sometimes. Over two decades, though, they always go up.

[Sparhawk60]

12. Student Loans

Student loans as well as the tight mortgage requirements do change the picture. Gone are the days of no collage debt and zero down to move in to a house. So once you're in a house, yes you do reap a lot of economic ( and emotional) benefits, however; it is a lot harder now to make that first step in to a house.


People working low wage jobs with massive student loans is changing society, and not for the better.

[blkmusclmachine]

2. n/t