The Housing Vacancy Survey has called this decade (2010’s) to be the strongest decade for renter growth in history!
So for tenants, this means one thing – strong competition when finding the perfect rental unit.
Unless you want to pay an outrageous monthly rent just to live in a broom closet, it is more important than ever to use the right resources to help speed up your search.
But first, let’s look at how the market is evolving and what it means for potential renters.
STATE OF THE NATION’S HOUSING
This annual address, given by the Joint Center For Housing Studies (JCHS) of Harvard University, clearly outlines the market shift away from homeownership. The increase in demand for rentals began in the mid-2000s and it is expected to rise as the huge Millennial population enters the housing market.
Between 2015 and 2025, JCHS projects that individuals under the age of thirty will create 20 million new households – the majority of them being renters.
But do not be fooled. Young souls are not the only ones wanting to escape the nightmares of owning a home [The Benefits of Renting]. Households aged 55 and over, making up just 25% of renters in 2014, comprised 42% of renter household growth over the past 10 years. And the baby-boom generation, those 65 and over, will continue to pass this threshold over the coming decade.
So what is the market response?
To match the climbing rental housing demand, the construction of multifamily units ramped up to 360,000 in 2014 from a historic low of 110,000 in 2009. This is the highest level seen since 1987.
Yet, it still isn’t enough. After an even growth in the number of tenants and new apartments in 2012 and 2013, growth in tenants finally passed the rate of new available units in 2014. New apartment additions reached 232,000 units while net growth in tenants peaked at 252,000.
So what does this mean for you as a renter?
As the market continues to tighten, monthly rent prices increase and the availability of affordable units decrease. According to JCHS tabulations of Housing Vacancy Survey data, the number of vacant units with rents under $800 per month dropped 12% between 2013 and 2014.
Also, the addition of new multifamily units is geared toward the high end of the market. The median asking rent for newly constructed units in 2013 was $1,290. This cost is equal to half the household income of the median renter.
At that rent level, over two-thirds of today’s renter households cannot afford these new units. And so renters are spending more time and energy in searching for a property they can both afford and enjoy.
So what can you do besides buy several scratch-offs?
The name of the game when you think a place may be for you, is speed; speed to tour it and speed to close. To be ahead of the game, you need to approach the search/touring process differently. And that is what we at ReaLync are here to help you do. ReaLync challenges that status quo for touring properties and has created new, innovative ways to help you keep one foot ahead in the race.
Staying ahead of the pack using ReaLync means that you no longer have to:
- rush home from work
- cancel showings
- take time out of your weekend
- make rash decisions
ReaLync allows you to see what you want to see in a property from anywhere at anytime. Worried it won’t do it justice? Not only can you interact via live audio and video, but you can ask questions, take photos, take notes, and have everything saved to the cloud to view at a later time.
With the pressures mounting for the rental market, consumers are being forced to become more savvy, innovative, and efficient. Good deals will only be increasingly harder to find moving forward, so make sure you arm yourself for battle and start training now to enter that foot race. Your dream property is waiting for you, but it may also be waiting Mark, George, or Sally too.
Until next time…Keep it Real!