The Rental Boom
The Rental Boom
While easily overstated, there has been something of a rental boom in 2011. Vacancy rates dropped sharply to 5.6% in the third quarter of 2011, the lowest level since 2006. Meanwhile, rents rose to a nationwide average of $1,004 in the third quarter, a rise of 2.4% year over year, and Reis Inc (the source of the above data) estimates that the total rise in rents for 2011 will be 3.6%. Developers (who tend to do plenty of market research before committing to construction projects) are acting on this information as well: rental unit construction starts are up 33.3% in the third quarter since the same period last year, to 48 million units according to the U.S. Census Bureau. A look at the November figures (the most recent monthly figures) show even more drastic differences: the rate of housing starts for apartment buildings with 5 or more units rose to 230,000, an increase of 25.7% since October, and 219.4% since November of 2010.
Brian Davis is a rental industry expert and the Vice President of ezLandlordForms. He is a frequent guest on radio programs ranging from Fox Business to the Wall Street Business Network to CBS Radio and more. He is also a landlord himself, who owns and manages over a dozen rental units.
