Rents Hit Record Highs, Vacancies at 10-Year Lows
People avoiding buying keeps demand high for rental properties
By Mark Russell, Newser Staff
Posted Jul 5, 2012 6:08 AM CDT
Not all apartments cost the $88 million that one went for at 15 Central Park West last year. But low vacancy rates have rental prices soaring around the United States.   (AP Photo/Richard Drew)

(Newser) – With would-be homebuyers continuing to sit on the sidelines, rental vacancies dropped to a 10-year low last quarter, driving up rental prices to record levels around the United States, reports the Wall Street Journal. Rental prices have reached record highs in 74 of 82 markets measured by real estate tracking firm Reis. The biggest climb last quarter came from New York City, where average rents jumped 1.7% to a hefty $2,935 per month.

"The market is in a very tight position," Reis said in a research report. "There is a paucity of available units." Nationwide, rental vacancy rates are just 4.7%—only the third quarter in 30 years they have been below 5%—down significantly from 8% in 2009, around the worst part of the economic downturn. But with people worried about job security, tighter lending standards, and wariness over long-term housing prices, rental demand is expanded to stay strong, pushing rents ever higher. The one wildcard, however, is new apartment construction—builders are racing to begin 235,000 units this year, then 285,000 in 2013, and 320,000 in 2014. A flood of new units could drive rents back down.

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Showing 3 of 5 comments
plain_speaking
Jul 5, 2012 7:40 AM CDT
Not true in my neck of the woods.....as a rental property owner...I wish it were so here....
InferiorToYou
Jul 5, 2012 7:21 AM CDT
Why should a bank lend money to someone to buy a foreclosed property when they can rent it to them for more money?
Xisiuizado
Jul 5, 2012 6:56 AM CDT
Then, when renting becomes too expensive, people will take the risk of home ownership again. Get the banks off of the foreclosures and home prices would fall to their equilibrium price, thus reducing home ownership risk and reducing the pressure on rental prices.