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February 16, 2017

5 Rental Predictions for 2017

by AvenueWest Managed Corporate Housing

In a recent Zillow article by Amie Fisher “5 Rental Market Predictions: What to Expect in 2017 (and Beyond),” Zillow’s Senior Economist, Dr. Skylar Olsen, predicts 5 rental trends for 2017:

  1. Overall Rental rate appreciation will stabilize this year. While the overall United States rental rate appreciation is staying around 1.5%, many West Coast metropolitan cities (Seattle, Portland, San Francisco and surrounding Bay Area, San Diego and Denver) won’t see their rental rate appreciation yet below 5%. Overall, there is more rental inventory available which is a large contributing factor to rental rates slowing down.

According to Apartment List, Inc. and their February 2017 rent report, rents increased slightly this month nationwide after four months of rental rate decreases. In 2016, the rental rate was significantly lower and did level off from the dramatic increases in 2014 and 2015.

us-rent-growth-2014-2016

2. Homeownership Rate will increase slowly as Millennial’s get older.  Many people have shifted to renting instead of buying since 2006. But, as Millennial’s get older and make more money, they feel that buying a home is an integral part of their personal freedom. Don’t worry, this shift is going to be gradual and over time so rental vacancies should not be affected yet.

3. Many renters are now being pushed to the suburbs. The Baby Boomers are looking to downsize from their larger homes, perhaps in the suburbs, and move to smaller homes in more walk-able neighborhoods. As a result, there is less inventory available in the urban areas and higher rental rates since there is not enough supply to meet the demand. More people are now looking to surrounding cities and suburbs to find lower rents and more options. Because of this shift, some of the fastest growing rental rates in the nation are in smaller cities and suburbs outside of the Nation’s most expensive metropolises.

rental-rates-increasing-in-secondary-cities

4. New home costs will increase due to rising construction costs. Most new home builders are moving their focus on high-end homes since the cost of construction and land is on the rise. This means that more people will still be forced to rent since the average person will not be able to afford the new home prices currently being offered.

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Source: The Zillow Group Report

5. Interests rates will increase. Over the past couple of months, interests rates have already begun to increase due to the change in administration. If they continue to rise over the course of this year, individuals and families who might have been considering buying will instead remain in rentals until the rates go back down.

Overall, the cost of rent has started to mellow out a bit but there are still some major factors that are playing into the current rental market nationwide and why we most likely won’t be seeing any major decreases anytime soon.

Luckily, the majority of all AvenueWest Managed Corporate Housing‘s rental properties aren’t affected by the major rental rate hikes impacting apartment communities since our properties are privately owned.  Rent like a local in one of our beautifully furnished or unfurnished properties. Call us today 1-800-928-1592.

Here are the nation’s 100 largest markets and their median rental rates and percent changes from Apartment Source, Inc.:

City Median 1BD Median 2BD M/M Price Change Y/Y Price Change
San Francisco, CA $3,420 $4,610 0.6% -1.5%
New York, NY $3,220 $4,110 -0.1% 1.0%
Boston, MA $2,790 $3,200 0.7% 0.4%
Washington, DC $2,140 $3,040 -0.3% 0.1%
Jersey City, NJ $2,540 $2,900 1.2% 2.1%
Los Angeles, CA $1,870 $2,600 -0.1% 0.5%
San Jose, CA $2,110 $2,600 0.3% -1.4%
Stamford, CT $1,920 $2,400 0.3% -0.6%
Miami, FL $1,850 $2,330 -0.9% -2.8%
Seattle, WA $1,650 $2,200 1.1% 5.3%
San Diego, CA $1,530 $2,000 0.1% 1.9%
Long Beach, CA $1,390 $2,000 0.8% 6.1%
Santa Ana, CA $1,550 $1,870 0.8% -1.5%
Denver, CO $1,350 $1,740 0.5% 1.1%
Anaheim, CA $1,400 $1,740 -0.6% 1.4%
Fort Lauderdale, FL $1,300 $1,700 -0.3% 2.2%
Atlanta, GA $1,370 $1,650 0.2% 2.6%
Dallas, TX $1,240 $1,650 -0.2% 2.3%
Minneapolis, MN $1,360 $1,600 -0.5% 1.9%
New Orleans, LA $1,400 $1,600 0.0% 1.0%
Chicago, IL $1,480 $1,600 -0.1% 1.1%
Portland, OR $1,380 $1,560 0.4% 0.3%
Philadelphia, PA $1,300 $1,550 0.2% -1.5%
Austin, TX $1,150 $1,450 0.1% 0.4%
Baltimore, MD $1,330 $1,400 -0.1% 1.0%
Houston, TX $1,100 $1,400 -0.1% -3.3%
Riverside, CA $1,000 $1,370 0.4% 2.2%
Aurora, CO $1,030 $1,350 0.3% 1.9%
Nashville, TN $1,340 $1,340 -0.1% 3.0%
Pittsburgh, PA $1,100 $1,340 -0.1% 2.6%
St. Petersburg, FL $890 $1,300 0.7% 2.4%
Manchester, NH $1,110 $1,290 1.1% 4.1%
Madison, WI $890 $1,220 0.1% -0.5%
St. Paul, MN $950 $1,200 0.6% 3.0%
Sacramento, CA $990 $1,200 0.0% 2.4%
Tampa, FL $1,000 $1,200 0.4% 2.2%
Charlotte, NC $1,060 $1,200 -0.5% 2.5%
Orlando, FL $1,040 $1,200 -0.2% 2.4%
Tacoma, WA $1,000 $1,200 0.1% 7.7%
Anchorage, AK $930 $1,180 0.6% -5.1%
Fort Worth, TX $950 $1,170 0.3% 2.8%
Virginia Beach, VA $900 $1,150 0.1% 3.2%
Vancouver, WA $960 $1,130 0.5% 4.9%
Richmond, VA $950 $1,100 -0.5% 1.1%
Durham, NC $910 $1,060 0.1% 1.5%
Milwaukee, WI $1,120 $1,050 -0.3% 1.8%
Corpus Christi, TX $830 $1,020 -0.2% -0.3%
San Antonio, TX $850 $1,010 -0.2% 0.3%
Raleigh, NC $930 $1,010 -0.3% 1.7%
Stockton, CA $780 $1,010 -0.4% 5.7%
St. Louis, MO $830 $1,000 0.8% 0.5%
Phoenix, AZ $840 $1,000 0.3% 5.2%
Colorado Springs, CO $810 $1,000 -0.3% 4.9%
Baton Rouge, LA $990 $1,000 0.4% 2.6%
Salt Lake City, UT $790 $990 -0.2% 1.5%
Arlington, TX $770 $990 0.2% 7.0%
Rochester, NY $830 $990 -0.3% -0.8%
Las Vegas, NV $830 $980 0.1% 4.7%
Jacksonville, FL $820 $980 0.1% 2.0%
San Bernardino, CA $750 $950 0.1% 0.5%
Reno, NV $700 $950 -1.0% 6.3%
Birmingham, AL $890 $950 -0.4% 4.1%
Grand Rapids, MI $810 $940 -0.1% 1.5%
Omaha, NE $750 $910 0.0% 0.2%
Providence, RI $840 $900 -1.1% 2.9%
Mesa, AZ $720 $900 0.0% 3.7%
Columbus, OH $750 $900 0.4% 3.0%
Boise, ID $750 $880 0.5% 4.5%
Norfolk, VA $730 $880 0.1% 2.2%
Lincoln, NE $680 $870 -0.2% 2.5%
Fresno, CA $750 $850 0.2% 2.6%
Kansas City, MO $780 $850 -0.6% -0.9%
Des Moines, IA $880 $840 0.1% -2.5%
Bakersfield, CA $700 $830 -0.2% -1.3%
Cincinnati, OH $700 $800 0.7% 4.4%
Albuquerque, NM $630 $800 0.4% 2.4%
Louisville, KY $680 $800 0.8% 6.3%
El Paso, TX $620 $800 0.1% 0.6%
Little Rock, AR $690 $800 0.6% 3.8%
Indianapolis, IN $710 $800 0.1% 1.0%
Lexington, KY $640 $800 -0.8% 2.2%
Spokane, WA $630 $800 -1.4% 4.8%
Knoxville, TN $760 $780 -0.3% 3.8%
Cleveland, OH $650 $780 0.0% 1.3%
Oklahoma City, OK $650 $780 -0.2% 2.2%
Greensboro, NC $640 $780 -0.3% 0.5%
Tallahassee, FL $660 $750 0.7% 0.9%
Tucson, AZ $550 $750 0.2% 1.3%
Tulsa, OK $570 $750 -0.2% -1.1%
Winston-Salem, NC $710 $740 -0.7% 3.8%
Mobile, AL $660 $730 -0.3% 4.3%
Memphis, TN $730 $730 0.3% 2.5%
Fayetteville, NC $580 $700 0.0% 0.9%
Toledo, OH $500 $700 0.1% 7.5%
Montgomery, AL $640 $700 0.1% 1.6%
Detroit, MI $600 $680 0.2% 2.8%
Columbus, GA $620 $680 0.1% -0.1%
Wichita, KS $510 $630 0.2% 1.9%
Fort Wayne, IN $490 $600 -0.9% 0.7%
Huntsville, AL $480 $550 -0.3% -0.2%
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