As we mentioned in our last post, each year we survey property owners and managers to identify trends in the rental market. With approximately 29,000 apartment communities and more than 5 million rental units represented in our survey, we are able to provide interesting insights into the state of the rental market year over year.
What we learned in our 2011 survey is that 45 percent of property managers are experiencing lower vacancy rates compared to 2010 and that they expect the median rent rate to increase 3 percent by Q3-2012. With vacancy rates falling and rental rates rising, the market is improving for property managers and the number of concessions afforded to renters is declining. In fact, compared to one year ago, 35 percent of property managers are more likely to make concessions to fill apartment vacancies than lower rents, down slightly from 38 percent in 2010.
Additionally, only 15 percent of property managers are more likely to lower rents than offer concessions to fill vacancies, whereas 31 percent were willing to do so last year and 69 percent would in 2009. This year, 42 percent of property managers mentioned that they didn’t need to make any compromises to rent their apartments, up from 22 percent in 2010.
Still, some property managers are providing concessions to incentivize renters to sign an apartment lease. Twenty percent reported reducing deposit amounts, compared to the 44 percent of property managers willing to lower deposit amounts in 2010. While 16 percent of property managers are still willing to lower rent or provide one or more months’ rent free as a concession, these tactics are far less common than in 2010, down from 37 percent and 36%, respectively.
If you missed our first post about the survey, you can read it here: Rental Market Outlook-Rent.com Survey Part I. With the apartment sector experiencing strong improvement in many markets, it may be time to look at your rental situation. If you live in a neighborhood where demand is high relative to a short supply, you may want to consider locking in your apartment lease with a renewal which has a longer term. On the flip side, if you continue to see “for rent” signs throughout your neighborhood, this could be a good time for you to explore your options. In neighborhoods where there is more supply than demand, you may be able to find bigger, better, or cheaper apartment rentals nearby that meets your needs.