Have you noticed a recent spike in your monthly rent? A lot of people have, and it’s a trend not only locally but in markets across the country.
According to http://news.investors.com, over the past several years homeowning has become more difficult and former homeowners are now becoming tenants in mulitifamily dwellings. Due in large part to the economic downturn, many homeowners today can no longer afford to pay a monthly mortgage and instead are resorting to the next alternative: renting apartments.
As with most news, this is a mixed bag — it’s not good for renters, but it does make for a strong market for multifamily properties, supporting higher sales prices and spurring new development and redevelopment of multifamily properties. (see last week’s post about local development for current examples of this happening right here in Richmond)
Across the nation, multifamily properties are leading in occupancy and rent growth when compared to commercial developments, like office space and retail properties.
In a recent housing study by commercial property brokerage firm Cassidy Turley, chief economist Kevin Thorpe said:
“I’m optimistic about the multifamily sector, certainly for the next two years…We’ve entered a period of sustained rent growth.”
This recent boom in multiple tenants occupying apartment units is due to the fact that the average renter a year ago could afford the rent for a single family home when now the cost is too high.
Richmond seems to be following that rising rent trend, too. In 2007, the cost of a single bedroom apartment averaged $754/mo. and now the average cost is approximately $814/mo.
Have you seen this happening when your lease has come up for renewal? What do you think the renting forecast will look like in RVA for the rest of 2012?
