Landlords from Tampa, Florida to Memphis, Tennessee to Riverside, California are raising rents at record speeds. Multiple people apply for each list. Some renters are forced to check in at the hotel while losing many times and hunting.
Shannon Dopkins, a member of the National Association of Realtors in Tampa, said: “One woman passed the place where she was beaten by the flood. Someone else decided to rent it.”
The rental market is now seeing record demand after weakening early in the pandemic as the economy slumped and young people overcame family blockades. According to industry consultant RealPage Inc, occupancy of rental condominiums in the United States increased by about 500,000 in the second quarter, with the largest annual increase in data dating back to 1993. Last month’s occupancy rate reached a record high of 96.9%.
According to RealPage, newly signed rents surged 17% in July compared to the amount paid by previous tenants, reaching record highs.
Profit reflects a resource that is becoming increasingly difficult to obtain, the competition for living somewhere. Prices are soaring in the sales market and the surge in bidding wars has forced potential losers to return to rent.
At the same time, young Americans looking for their first apartment are competing with others who have delayed their plans for Covid-19. Remote workers — and their high salaries — are moving to low-cost areas. And the landlords of small single-family homes and condos, seduced by high prices, are desperately leaving their tenants elsewhere for cash.
“The entire housing market is on fire,” Mark Zandi, Chief Economist at Moody’s Analytics, said: “This is a basic need, but it’s becoming more and more out of reach.”
Evacuation bans also play a role in keeping the market tight, as about 6% of residents are forced to move out each year. Zandy estimates that the country’s affordable rent shortage is at least the worst since the post-WWII period.
Developers are adding new supplies. But in the short term, squeezing has an economic impact, as workers cannot easily move around for work and spend less on things other than housing. Soaring rents have also contributed to inflation expectations in the Federal Reserve.
They may not yet be accurately reflected in some measures. Homeowner-equivalent rents, which account for almost a quarter of the consumer price index, rose 2.4% year-on-year in July. According to Zandy, the numbers are “behind the scenes” because they are based on a survey of homeowner expectations regarding home rents.
There is nowhere to go
The rent for those who sign a new rental contract is the highest. But even those who update them are shocked by the stickers. Dental assistant Carmen Santiago, who was paying $ 1,479 a month for a two-bedroom apartment in Tampa, notified the landlord in March after a $ 300 surge in rent.
The two mothers then piled up more than $ 1,000 for a non-refundable application fee given to about 10 landlords, sometimes lining up without even looking at the property first. A few days before the debt expired in June, Santiago made its final drive. She visited five apartments. The sixth was a vast complex with 22 buildings, with one unit available.
The cost of the two bedrooms was over $ 1,900 per month, including the mandatory cable fee. This is higher than what Santiago would have paid if he had renewed his old lease. She could hardly afford it, but took it before it was gone.
“I didn’t know how difficult it was to find something,” Santiago said. “Looking back, maybe I should have stayed.”
Tampa rental agent Dopkins said he recently represented a woman who had to shelve plans to move there for work. After running out of her transfer package at the rental application fee, the client is now planning to commute from her home in Ormond Beach, Florida for two and a half hours and stay in Tampa’s Airbnb or hotel room once or twice. .. week.
The surge in demand is most pronounced in the city of Sunbelt, where an influx of arrivals from the pandemic was seen. Household rents rose the most in the country in June in the Phoenix region, up almost 17% year-on-year, according to data released this week by Corelogic. Las Vegas was followed by a 12.9% increase. Tucson, Arizona, 12.5%. Miami increased by 12.4%.
This is a reversal from the pre-pandemic tight housing norms in more dense and expensive cities where office workers were seen fleeing during the blockage, such as New York, Boston, and San Francisco. Inventories of luxury condominiums for white-collar professionals are still overhanging in these areas. Still, demand is picking up.
Tenants who are currently congesting the market have higher salaries, in part because many of them will usually buy a home instead. Migration from expensive locations is pushing up housing costs for locals, especially those in more affordable cities and remote suburbs.
According to RealPage, which collects data on professionally managed buildings, the average revenue for new contractors in July reached a record of $ 69,252. Since the beginning of the year, their income has skyrocketed by 7.5%.
Jay Parsons, Deputy Chief Economist at RealPage, said: “What’s crazy right now is that you can make a relatively high income and still have a hard time.”
Nicole Klim, vice president of Watson Property Management’s Central Florida division, says he wanted to offer more. However, the for-sale market is so strong that owners sell for great profits. As a result, Watson is now managing about 4,000 detached homes for private owners, a one-third decrease since the pandemic began, she said.
Even relatively sleepy areas such as Springfield, Illinois, three hours from Chicago, are experiencing shortages. Landlord Seth Morrison said his only list of apartments had collected dozens of phones before he removed it.
“We have 270 units and there is no open,” Morrison said. “In a city like Springfield in a state like Illinois, having this kind of demand is just crazy.”
Landlords across U.S. jacking up rents at record pace.