Rents Deflate in the Hottest US Cities, Soar in Cheaper Cities

Honolulu rents plunge 19%. Landlords scramble.

In the still ludicrously expensive rental market of San Francisco, the median asking rent for a one-bedroom apartment dropped 6.1% in May from a year ago to $3,370 and is down 8.2% from the peak in October 2015. For a two-bedroom, the median asking rent dropped 6.3% year-over-year to $4,500 and is down 10% from the peak in October 2015. Reality creeps into rental la-la land.

The last episode of year-over-year rent declines in San Francisco ended in April 2010. So this is a rare occurrence. Last time, the declines started well into the Financial Crisis. This time, there is no Financial Crisis, only a “Housing Crisis,” where the middle class can no longer afford to move into a modest apartment.

In New York City, the median asking rent for a one-bedroom plunged 10.8% year-over-year to $2,900 and is down 13.9% from the peak in March 2016. For the median two-bedroom, it dropped 7.9% year-over-year and is down 10% from the peak.

These are asking rents in multifamily apartment buildings, based on Zumper’s National Rent Report. Single-family houses for rent are not included.

Asking rents do not consider incentives, such as “1-month-free” or “2-months-free.” In San Francisco, incentives were rare. Now, as a result of a historic construction boom, new high-end apartments and condos are flooding the rental market just as job creation is sharply slowing. So landlords are scrambling to keep their units filled, and incentives have become common. The impact? With “2 months free,” the first-year median rent of a two-bedroom apartment would be down 25% from its peak, or $15,000 for that year!

Incentives allow landlords to lower the rent without showing the declines to the public, thus maintaining the perception of a rent level that no longer exists. They fear that common knowledge of lower rents would repress rents further. Plus, if tenants don’t move after the lease is up, the effective rent in the second year, without rent increase, jumps back to the former asking-rent level.

In the third most expensive large rental market in the US, San Jose, median asking rent for a one-bedroom rose 3.5% year-over-year to $2,370 but is down 2.5% from the peak in April 2016. For a two-bedroom, it fell 1.4% year-over-year to $2,870 and is down 6.8% year over year.

This table of the 12 most expensive large rental markets in the US shows median asking rents, their year-over-year changes, and in the shaded areas, the prior record and the change since then. Until last year, the table was covered in thick lush green:

Rents in the Bay Area cities of San Francisco, San Jose, and Oakland are all down from their respective peaks. Note the 15% plunge of two-bedroom asking rents in Oakland.

But the deepest plunge in one- and two-bedroom asking rents is happening in Honolulu, down 16.4% and 18.6% from the peak, not including incentives. This is starting to be serious.

Of the top performers in rental la-la land, rents in Seattle have been on the verge of flattening out recently. While one bedroom rents set a new record, two-bedroom rents are 7.5% off their peak last April.

But in some less expensive rental markets, asking rents are soaring in the double digits, and this gap between the weakness at the top and soaring rents in cheaper markets is averaged away in the national numbers. According to Zumper, on a national basis, the median asking rent for a one-bedroom apartment rose 2% year-over-year to $1,165 and for a two-bedroom 2.5% to $1,392.

So the big rent increases are migrating to mid-tier markets – mid-tier in terms of price not the size of the market – for example:

  • Nashville, TN (+15.1% and +15.0%);
  • Houston, TX (+15.2% and +14.6%)
  • Sacramento, CA (+15.2% and +15.3%)
  • Charlotte, NC (+15.5% and +9.2%)
  • Raleigh, NC (+11.0% and +12.6%)
  • Newark, NJ (+15.1% and 15.4%)
  • Durham, NC (+11.8% and +11.0%)

Which shows why the Consumer Price Index doesn’t reflect reality for a lot of people on the ground. With rents surging 15% in Nashville, for example, and rent absorbing perhaps half of the renter’s income, the increase in the costs of living for that consumer far outpaces the national CPI numbers. Few workers today receive those kind of pay increases, unless they get a major promotion, in which case they have to use the additional income from professional advancement just to keep up with rental inflation, rather than to move into nicer digs or to save for a down payment or to spend it on other things.

At the bottom of the article is Zumper’s complete list of the top 100 most expensive rental markets and price movements. Check out your city. Some of the movements are breath-taking (click on image to enlarge).

“It is really hard to spot bubbles with any confidence before they burst,” wrote Minneapolis Fed President Neel Kashkari, the latest Fed official to claim that the Fed cannot see bubbles, and that if it could see them, it shouldn’t do anything to stop them. So here are some visual aids I put together to help the Fed spot the housing bubble. Read… Dear Fed, It’s Not “Really Hard to Spot Bubbles”

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  75 comments for “Rents Deflate in the Hottest US Cities, Soar in Cheaper Cities

  1. BradK says:


    Your Zumper link is mangled. I think this is what you meant to post:

    • Wolf Richter says:


      The first link is correct (to Zumper’s National Rent Report). The second link (I think that’s what you meant) was mangled. It should go to Zumper’s home page. It does now. Thanks!

  2. Lee says:

    So what are housing prices like in those mid-tier cities? What is the cost of renting compared to buying?

    Just for fun here is a list of the ‘cheapest’ median priced suburbs around Melbourne, the median price, and how far they are away from the city.

    The data is unreal and makes commute time ridiculous even compared to time in Japan!

    Prices are even in la-la land out in the sticks here:

    Top 14 most affordable suburbs for houses

    Suburb Distance to CBD Median House Price
    1 Millgrove 70km $295,000
    2 Melton South 44km $296,250
    3 Melton 41km $300,000
    4 Kurunjang 42km $330,000
    5 Melton West 44km $355,000
    6 Brookfield 46km $365,000
    7 East Warburton 77km $390,000
    8 Wallan 53km $392,500
    9 Junction Village 50km $393,000
    10 Dallas 19km $395,000
    11 Frankston North 41km $395,000
    12 Wyndham Vale 35km $395,850
    13 Warburton 71km $405,000
    14 Werribee 32km $412,000

    • Brian M says:

      The name “Junction Village” just shouts charm, no? :)

      • Lee says:

        Yeah – a wonderful place it must be – never even heard of it and it isn’t too far from where I live. Must be one of those leftover places caught in the middle of the other expanding suburbs.

        Population is a whole 1200 people…………….so not much for sale there in any event.

      • Mike G says:

        When I lived in Melbourne the only thing Werribee was known for was the sewage treatment plant.

        Is it still the “world’s most liveable city”?

        • Lee says:

          Yeah, Melbourne won that title again…………

          Only on paper though. Traffic is terrible, the train lines are congested and hardly ever run on time.

          (This past week they had a major melt down and it took over 2 1/2 to get to the city – over twice as long.)

          Prices for everything are sky high and the weather sucks.

          Other than that it is a great place to live!!!

    • DH says:

      Just for a data point, the 3 bed/2 bath house we’ve been renting for two years in Portland, OR is $2700 per month, and the same house would currently sell in the $650K-$700K range.

      • Realist says:

        Portland is in a huge bubble that is completely unsustainable. It is a Mecca for giving out government handouts, the homeless, SJWs, and far left extremists but not a Mecca for business and high paying jobs. And a very far left leaning government who never met a tax, regulation, or fee that they don’t like. A recipe for disaster. Not sure who is able to pay these rents. Other West Coast cities such as Seattle, SF, LA, San Diego at least have high paying businesses to support some of the madness in rents. Portland, not even close.

        • Jon says:

          San Diego does not have high paying jobs..
          In San Diego there is a big disconnect between income and housing prices..
          It’s quite frothy in socal as well like all of usa..
          This time the bubble is all over world fueled by CBs cheap monies

        • DH says:

          I agree that Portland is in a bubble (which is why we aren’t buying,) and there aren’t as many high paying jobs as in other West Coast cities, but the home prices/rents are still far below places like Seattle, SF and LA. I’d estimate that our cost of living dropped about 30% by moving from LA to Portland (I own a TV business in LA, so same pay.)

          Of course, I’m also talking about living “in close” in Portland, where most most current home buyers are professionals, tech people, or work for Nike. Go outside of town a bit and the prices drop considerably.

          FWIW, we can pretty much live in any city in America, and we chose Portland. We love it here and plan on buying when the prices drop.

        • DH says:

          edit: I meant we can live in just about any “mid-tier” city. Cities like NY are too expensive for us.

      • Nicko2 says:

        That’s about a 5% return, your land lord must be pleased.

        • DH says:

          Hardly. I think he’s gonna try to raise our rent this year…and he only bought the place for $500K 3 years ago. lol

    • A little different in the Greater Toronto Canada area. Out in the sticks is twice as far from the city. In fact home prices don’t really even start to fall at all until you’re at least 100 kilometers further away from Toronto.

    • Oh My says:

      I’m curious; this article is about rent in US cities; what does your posting of house prices in Australia has to do with rents in American cities? If you post rents in Australia from a trusted source for comparison, that’s would make sense. But what does house prices in Australia have to do with this article?

  3. Mark says:

    Seattle is in la-la land, and I definitely won’t be buying a home at this price point, but rents don’t seem unreasonable when accounting for incomes.

    Amazon drives the local economy. Last I heard it has something like 10,000 unfilled job positions. When you think about thousands of 22 or 23 year olds taking entry level positions in the $100-130k range every summer, some of the in-demand positions having signing bonuses in the $50k range, and the value of employee stock continuing to go up, up and away…

    When Amazon and tech sector valuations correct, the rental/RE market will correct. As much as I want to see it happen, I don’t think it will anytime soon.

    • nick kelly says:

      How many of those jobs are driving around a cart in a warehouse?

    • SFgoogler says:

      I’m in Seattle and can assure you there aren’t 10,000 unfilled $100k jobs in the entire state. The RE correction here is well underway as rents have been slipping since Q2 2016.

      • Mark says:

        Just in Amazon…I see 6,793 open job positions in “software development” alone. “Software Development Engineer I” average salary = $99,500. “Software Development Engineer II” average salary = $117,559.

        As for real estate…really? I am in the market for a house and I know firsthand it is insane. Anything nice that’s been built in the last 10 years in the $600k-$1M range in a nice neighborhood (Ballard, Queen Anne, Magnolia, Capitol Hill)…you’re in a bidding war with 10-15 other people in the first week. Winning bids are frequently $100-150k over asking, and you’ll probably still lose a number of times before submitting a winning offer. Everyone I know renting is seeing 10%+ YoY increases. Eventually it will slow, but as long as Amazon and the tech sector stay on fire, I highly doubt a correction’s coming anytime soon.

        • Jon says:

          All these jobs are spread across many countries and continents

          The prices would fall… everything is frothy for no reason bit cheap money

        • Gershon says:

          So refuse to play the game. Anybody who buys in at the peak of a bubble is an idiot.

  4. MaxDakota says:

    SoCal just seems to keep going up (LA, San Diego) while Bay Area is the opposite (SF, Oakland). Interesting that San Jose is still rising.

    We have been going to open houses “for fun” in LA (we would ideally like to buy, but prices are just too crazy right now), and have noticed that below $1-1.5M, pretty much any crap shack will sell within a week for more than asking. Realtor told us he sees a lot of all cash offers even above the $2M range – who are all these people? Friends in the Bay Area are seeing prices coming down now, so it may be time to move north! Or leave CA.

    • John says:

      Sounds like L.A. would be a nice sight in the rear view mirror. Here in the flyover country small towns have a hard time getting $500 rents. And lots of houses for sale in the 60-200k range. But as someone above mentioned its all relative to how high the average wages are. No matter where you live, the highline wires are lined with vultures just waiting to pick your bones. What the rentiers, insurance companies, and medical professionals miss the tax man is right there to get.

    • Joseph says:

      “Realtor told us he sees a lot of all cash offers even above the $2M range – who are all these people? ”

      Money launderers and the Chinese. All cash means foreign money looking for a home.

      Real estate is the US economy and woe to the fool who shorts it. This is not a bubble, because it can never ever end without calamity. It may slow but we’re in for at least ten more years of cheap money inspired housing prices.

      Who is going to stop it? Trump the developer?

      All the recent job gains touted by the Fed are bogus. They’re just trying to get to 1.5-2.0% so they’ll have space to cut in the future. When the fictional job gains vanish you’ll know the FED is in the mood to cut.

      Still plenty of time to buy that 1 million crap shack in Lemon Grove.

    • Wolf Richter says:

      “Realtor told us he sees a lot of all cash offers even above the $2M range – who are all these people?”

      In addition to the usual suspects – money laundering, etc. – they’re often just institutional investors that borrow at the institutional level short term – credit line, etc. – to buy the unit and that might then use a mortgage or other means to fund it long term after the fact. They might for example issue bonds if they have a lot of properties to fund. This is the case with big PE firms and REITs.

  5. junior_kai says:

    As far as Honolulu, they had a build-it and they will come mentality and not many came! A decent amount of luxury homes were built on spec too, 3-5M and will probably go for half that at the next bottom.

    Ironically at the same time plenty of 60 year old rotting shacks are occupied. Heckuva job Yellen!

  6. Bee says:

    $4500/month for a 2-bedroom apartment. I’ll just leave that here.

    Rents are going up in all the cities where left-leaning escapees are moving to. Be warned, TN and NC.

    • doug says:

      NC ? Left Leaning? What? Have you noticed the legislative makeup over the last 6 or so years????
      Please show your work on that statement…

      • Bee says:

        I didn’t say NC was left-leaning.
        I said “left-leaning escapees are moving to TN and NC”. They escape the mess they created in their lands (CA, NY, etc.) and transport it with them. So, again—be warned, TN and NC.

        • Frederick says:

          Bee You are correct Nrth Carolina is full of Yankees like myself although I’m a conservative I have friends who retired there recently Lots in Florida too as you probably know

        • Bee says:

          Frederick—Yes, and I think some of the NY’ers who moved to FL are now also moving to NC.

        • Claire Stenvenson says:

          I have lived in North Carolina for twenty-six years, and I agree strongly with Bee. Not only are rents sky-high and rising in places that have attracted the politically correct crowd, but this same influx has turned what was once an interesting–“diverse”culture, one that was not uniformly politically correct!–into one that is increasingly two-dimensional and stifling.

      • Petunia says:

        Max Keiser, of RT TV fame, says he’s thinking to run for congress in NC. Apparently he now lives there. Look out.

  7. TheDreamer says:

    Things are very strange here in the Twin Cities to my eyes. As mentioned before, my building kept insisting that raising the rent 10% a year was “fair market value”. Even though the quality is rapidly deteriorating (roof caved in, constant plumbing issues, etc.), and new construction totally ruined the neighborhood with price increases and loss of charm, total overcrowding of cars and a street that seems to smell constantly like a dog urinal. So I gave notice and am currently looking for a new place. The market is downright schizophrenic when it comes to rentals right now.

    All these new REIT buildings – poorly made, poorly designed, slapped together and ugly new apartments they want crazy rents for (like $3k a month for a 900 sq. foot hole in the wall with no view and 0 privacy) but are willing to as you say throw in a month or two free.

    Meanwhile, the older (and I am coming to discover much nicer and more thoughtfully designed and maintained apartments) are coming in at $800-$1200 for a 1-2 bedroom and rapidly dropping. These buildings are often right next to each other – there is no “location” in this equation. They are being or have remodeled from the 80’s when they were built, with nice accents or adding things like a nicer granite countertops or an in-unit washer/dryer (pretty much a must these days, who wants to share a laundromat – gross, plus I don’t have time to go sit in a room like that and fight over machines). They haven’t gone crazy, but simply updated to be more livable, with a more classic aesthetic and their prices don’t need to be nuts because of their prudence and taste. The buildings themselves are time-tested.

    The new REIT buildings are like 20% occupied – I ask before I go in. All are wood framed construction – the Minneapolis City Council, in a fit of mental dysfunction, that I am coming to associate with all forms of government and the elderly, decided they would allow wood frame buildings up to 4 stories – so everyone built-in wood vs. concrete or steel because some spreadsheet said it would be 10 cents cheaper. I feel like no one thought anything even once about the future or actual quality of life – which I am coming to associate heavily with all things the Boomers are behind. Haven’t these people ever heard the story of the Three Little Pigs???? Build nice things, with high quality meant to last! Quality is EVERYTHING.

    The walls are paper thin and you can hear all the noise everywhere in the world. They are REIT owned, so the staff has 0 interest in the success of the business. For everyone involved it’s “Just a Paycheck”. No one is actually invested emotionally or financially like they are in the older more modest buildings. They all have some college kid running the leasing office who insists that people are coming and they just can’t hold onto the units – this is total nonsense. One sentence before you just told me it’s empty and your building has been open almost 2 years now and I know for a fact every other building around has the same problem because I can talk to them, or see in all their huge windows.

    It’s clear the designs were done by a cracked out committee. It was like someone gave the same architecture firm a list of requirements (must have a dishwasher, a Rec Room, etc…), and they quickly cookie cutter all the same building just tweaking one or two things with the ugliest of decorating schemes I have ever seen. You can tell it was built via a checklist and a spreadsheet trying to maximize a $/sq ft calculation. Seriously, I thought Brutalism was the ugliest form of architecture. I have repented, Brutalist concrete buildings look like a veritable Venus De Milo – straight up beautiful – compared to this post-post-modern vomit. I have gone inside and the hallways are orange, the elevators are already falling apart right after construction – some stop working regularly, and everything reeks of low-quality and low-class accommodations masquerading. My particular favorite architectural monstrosity is the insistence on doing floor to ceiling windows in every single one of these abominations. This may come as a surprise – but a small windowsill does wonders for giving a unit more privacy to stop street view eyes from peering in. Every unit I see occupied the blinds are closed almost 24 hours a day because everyone and their mother can see right in and watch everything gone on (or see how totally empty they are), and window blinds are not meant to deal with that.

    Everything wrong with McMansions has just been repeated in the last few years, this time in apartment form. I for one hate McMansions – yuck. Seriously just gross.

    I suspect the REITs thought they were going to flip the rentals into Condos – Good luck with that one, what’s your stock again so I can short it??

    The Twin Cities, still, has a real “keeping up with the Jones'” problem – no one seemed to inform the powers that be that living within your means is what’s “cool” these days (it is – frugal girls are sexy as hell). Still, you get a fair amount of people trying to show they “made it” when you can just tell they are dead broke and one paycheck away from losing it all.

    I’m seeing bizarre diversion right now, where the family owned units are rapidly lowering rent or willing to make a deal, at a much lower price point, while the REIT new construction keeps insisting they are going to fill up to the max and get more than what they ask for. My calculations show about 100,000 empty 1-2 bedroom units in the Twin Cities. (3 years ago there was an estimated 10,000 “luxury” unit shortage in the twin cities according to an article I saw in the Star Tribune. They have built around 400+ new buildings with an average of 200 units in each – and more still being built. Plus we have a net outflow of people as young kids want to stretch their wings and try someplace new and Gen Xer types are FINALLY having their first kid at around 40 so they are moving to suburbia, but wayyyy outside the beltway because that’s all they can afford and, because the Boomers still seem to believe real estate only goes up and no one can afford even our relatively modest (compared to national) prices. Everyone was excited that the prices were back at 2008 levels. Hello – they were way too high then and things are worse economically now! Idiots – I have been forced to conclude people are just dumb.

    Every single building has a “For Leasing” or “For Rent” sign on it. I mean every single one. There are still quite a few new apartments coming online. Meanwhile, the ever frugal millennials, like myself, totally broke – still and apparently forever – from student loans, have decided it is like “so over” and are moving away rapidly into the much more affordable older, but somehow nicer, units, and in my case, with eyes on leaving the city, and possibly the country entirely because I just can’t afford all this nonsense – and frankly I ain’t having any fun and it seems like there is little hope of finding a nice girl who isn’t totally out of their mind and believes that men are there to serve them or that judging people on their skin color is OK. Total insanity – Trophy Wives these girls are not – I assure you. A couple is supposed to be a TEAM. It’s not meant to be a battle – world is hard enough as it is.

    I digress – In any case, Why would I want to spend 50%+ of my income on renting your poorly made cardboard box? Who do you think can even afford your apartment – Particularly when the family owned and maintained building down the way is willing to rent at 50% less than the RIET. If I could afford the REIT I would buy a modest house – which I can’t but I’m just Dreaming. Why play the game when you know it’s rigged? Ya know. That’s when the smart people just walk away. I tend to be ahead of the curve on a lot of things – but in this case, Supply is meeting Demand in a very real way – but the ultimate factor is INCOME – of which is very low relative to all the costs.

    • Gershon says:

      Nice rant! My niece lives in an apartment just like you describe – soulless, charmless, shoddy construction, indifferent maintenance – looks like it was designed by Khrushchev-era Soviet architects and built by North Korean slave labor. I never cease to be amazed at how the sheeple who are being relentlessly screwed over by the financialization of all of our basic needs – housing, medical, food, etc. – bend over with such alacrity for the status quo election after election.

      • TheDreamer says:

        Thanks! I had to get it out there. I feel a bit better. I toured a number of apartments this weekend – shoddy was the operative word – that and WAYYYY overpriced. Anyone who has ever lived in an apartment knows that the key things are noise and maintenance are key. I did not see anyone else at this – calling around a number of more units are open, most leasing agents seemed surprised someone was looking.

        My assessment that the older – privately owned (vs. Corporate REIT) are likely to far this next down leg in Depression 2.0 a lot better. They are cutting rents to fill occupancy, and are willing to do things to fix it up and make a deal.

        I agree on politics – I was shocked that more people did not Vote Libertarian or Green – I was sure the Libertarians were going to become an official party – Right now I am thinking Bill Weld sucks though. I was very surprised by the number of people that just rolled over when Bernie got the Dem primary stolen from him. Not to mention the censorship and all these other scandals. I think the Dems are done – no one really cares what they seem to say, they do not have a Platform that I can tell – and I personally find their attempts to divide us by skin color or creed to be abhorrent. I grew up with the idea that America was a Melting Pot and that was what made us strong. We did not need the chains of Old World thinking. We can do Better. We Reach for the Stars (or we did once, and may again). I think Gary Johnson and Rand Paul make an excellent 2020 ticket – if we survive that long without World War 5 going. Even then, still a good ticket. Tulsi Gabbard can be Secretary of State. Key platform point is a Constitutional Amendment with Term Limits for Congress and an explicit statement that Congress may grant itself no special privileges without the express approval of the people. This is likely already in the Consitution, but it seems to have been forgotten.

        The Financialization of all things is really a big part of the core problem. Just look at Finance as a % of GDP. A healthy economy may be banking is 10% of economic activity – not 30-40%. There is only so much efficiency that can be gained.

        The other key thing is – economically – people have to realize that all the “truths” of the last 50 years assumed an expanding population. We are now entering a period of global population contraction – by its nature deflationary. The sooner that gets realized the quicker we can be to maybe salvage some of it. I wonder if we may just have to walk away from the system entirely. Lately, I’ve been thinking that what if the world is currently like a 1912 position – imagine describing to someone then what 1922 would look like. The vast majority would simply not be able to begin to comprehend the sheer vastness of the upheaval that seems to be on the horizon.

    • Mike G says:

      This reminds me of a conversation with a contractor friend in the Vancouver area. Investors came in and built cookie-cutter apartments re-using California architectural designs with a cheaper/lower standard of waterproofing. After 5-10 years in the soggy BC climate they had to half-demolish and rebuild many of them because water had gotten into the walls.

      • cynic says:

        Very interesting to read these comments from the US – just the same shoddy building in England.

        I live in perhaps the most expensive town in England, outside London, a major high and bio-tech ‘growth hub’, which is becoming unbearable.

        A customer of mine was very senior in planning , a chartered surveyor, now retired: when I met him at the train station, he pointed out a particularly awful low-rise of flats and said ‘That’s the temporary site accommodation I suppose?’

        His face when I told him it was the finished article was a picture indeed.

        Same thing with rotting buildings, falling apart before one’s eyes, mould-covered fascias. My Polish builder said he doesn’t think they are safe at all.

        And here’s the best joke; the developers said about one site that they wouldn’t be doing any tree planting, ‘as the buildings will be so good people will want to look at them.’ :)

      • Petunia says:

        Where I am the roads seem to have been designed by the insane. It turns out they were not designed by the insane after all, but by cronies. The highway department is a patronage system controlled by the governor. You don’t have to have any experience in road design or construction to work in the highway department, you just have to be a friend of the governor. It has been this way since the 1920’s and we get to deal with the chaos every day.

        • Meme Imfurst says:

          I had no idea. I always had heard that DOT just hates everyone.

          Their brilliance can be see in my town where they put an island cross walk one car length away from the entrance to the mall. One car at a time can turn, the rest sit in the thru lane. The kicker is the corner is 100 feet away with a signal crossing for pedestrians.

          DOT seem to enjoy making dangerous if not insane decisions. The complaints are from the police, the sheriff, all the citizens but the DOT says they need “DATA” to confirm if the crossways should be removed or moved. When asked what the DATA is, they responded…deaths.

          There was NO problem before they meddled up and down the Keys with the crosswalks ( and with NO discussion with any authority here).

      • TheDreamer says:

        Yes Exactly! I went in or by a number of them – everything is all the same. It’s not a reach for excellence. These buildings are all a lowest common denominator type thing. Older buildings seemed to be made by craftsmen. This time, there was no passion. I think likely because they are being “designed” by corporate committees that have never spent any time in the location.

        Historically apartments seemed to have been built as an investment by a family – it was literally their life and a business and retirement plan if not a legacy. These are all just impersonal “investments” funded by easy funny money that some jerks get access to at 0% while the rest of us suffer. There is a total lack of ownership – and it shows.

        I add up all these apartments, I’m pretty sure we could have built a Moon Colony for cheaper. Don’t even get me started on the bailouts – we could have gotten high-speed trains, the Civilian Conservation Corps, 20 offshore wind farms, no more student debt, and still have Trillions of it left over. Total scam – and worst, total waste of Time, the most precious thing.

    • John Taylor says:

      I’m one of those near-40 gen-x’ers, except I gave up on raising a family and I rent a cottage behind a McMansion in LA because it’s only $900/mo and way nicer than the crappy $1300/mo studio apartments in Van Nuys – even though it is used as a plumbing office during the day.
      Don’t lose hope Dreamer, things will change sooner or later. I’m not gonna lie – we’ll always be left behind- but we can still have some freedom if we stay single and do it smart.
      Hell, I’m a project engineer with a Tile company finally making as much as I did in HVAC job I had before I got my MBA -except with more hours and none of the benefits. Mechanical engineer undergrad from UCSD, Navy nuclear power school, MBA from USC in finance and entrepreneurship … skills simply not in demand, tried starting my own business with credit cards and went BK, and recently landed this job from a personal connection.
      My life’s about travel now and visiting friends on the weekends. Im going to Norway and Ireland this year, I can drink most every night, but I do work 10 hour days, I can’t plan for the future much beyond saving for my next bout of unemployment, and I hate the place I live. Some of my friends are married with kids, but only a couple have houses, and most either rent tiny over-priced apartments or live with their parents (those people have the best hangout spots).
      Anyway, you’re not alone. Good that people like Wolf are telling it how it is, it gives us hope.

      • alex in san jose says:

        John Taylor – So, you found out an HVAC certificate is better than an advanced degree. Wow.

        I’m in the SF Bay Area and there’s a large enough Irish population here that there’s a local Irish newspaper, there are lots of ads in there and articles, to put it bluntly, Ireland is crying for people and if you can find any “link” to Ireland, you could move there and probably do a lot better than here in the states.

        Hell, even “Ferfal” the survivalist guy went there.

        So, maybe this is some food for thought.

        • bandini says:

          Where are the Irish hiding? I’ve never seen this paper before either.

          The grass is always greener somewhere else, most of the time its an illusion. Watched my step father chase the illusion for 20 years in Southern California, moving to cheaper and cheaper locations.

          I have a friend who is trying to run a construction company out of Vallejo and wonders why he never gets ahead. The simple tip that he just doesn’t get…, go where the money is made and spent the most.

        • alex in san jose says:

          Bandini –

          “Irish” are just not a thing in SoCal. But up here, there are Irish bars, Irish music things with weird Gaelic names, etc. There’s an Irish shop in downtown Campbell, where they were absolutely thrilled to learn that marmalade is OK at best, but really shines in a sandwich with some peanut butter. Yep, spreading information and bettering the world, that’s me.

          (Hint: They were about as un-thrilled as could be.)

      • TheDreamer says:

        Thanks for sharing John – I feel your pain, and it’s nice to know we can support each other out there. Your skills are amazingly impressive! It sounds like you’d be right up there building things from the ground up. One thing I’ve been thinking of is heading South – the developing world seems to need good hearted people that can lead things to a quality project end. If you like to travel, you may want to try out Latin America – I’ve been exploring it for years. Asia might be cool too – but I do not know yet from experience. Your dollar goes a whole lot farther than in Euro make-believe land. I have heard that there might be opportunity in Ireland though.

        I think it’s so sad how hard it is to have a family and kids these days. No wonder the household formation rate and birth rate are at Record, Record lows. The biggest problem is that we’re going to need more kids. Social Security is already totally insolvent. If we were wise we’d say OK in 2 years we’re cutting benefits 40%. I know that’s not pleasant, but the reality is if we don’t it will all be gone in 5, so at least this way you get something.

        I look at Japan and worry is that what’s coming? The government is trying to get people to have kids, even welfare, but because they refuse to let the Financial System just Collapse – and then recover to a point of sanity – younger people just know it’s impossible and cannot do it. No wonder they place such an emphasis on robotics. As I said above – everything in modern Neoclassical economics lays on the assumption of ever expanding population. We are now experiencing population decline – therefore a wise person throws all those models out and says – OK where do we go from here?

    • Frederick says:

      Meanwhile I have a beautiful prewar apartment on the best street in Warsaw Poland 500 yards from the presidential palace 950 sq ft and have a hard time getting a thousand dollars a month from a young lawyer The rental situation in the US is totally insane and in my opinion unsustainable just like the prescription drug and healthcare debacles I live on the coast of SW Turkey near Rhodes Greece and pay 175 dollars a month for a one bedroom which includes TV internet Solar hot water and cooking propane so I can’t complain too much My SS check and the 2 percent I get on my bank deposits gives me a pretty good income for living well over here I’m in the process of building two houses on a acre lot I bought and will operate a bob as well as looking for a nice boat to go out and enjoy the sea No mortgage property taxes or homeowners insurance as well as growing my own food and using solar energy is the way to go for me Sorry for the “rant” folks

    • Frederick says:

      Dreamer Don’t knock those laudromats Some of the cutest girls I’ve ever met were from hanging out waiting for my wash to finish drying back in the early 80s in NYC Get a cute little dog ,even better

      • R2D2 says:

        Wow, getting a dog to hope for meeting a girl; taking on all that responsibility just to meet a girl? If a girl told me, I have to walk a mile to meet her, I’d probably never meet her :).

      • alex in san jose says:

        Frederick – Up where I am, laundromats are a great place to hook up with a middle-aged abuela with 3 kids and another one in the oven, and a very jealous boyfriend with a balanced mix of tattoos and knife fight scars.

        I’d not be surprised if Eastern Europe becomes a favored place to retire for US’ians. Tons of us have family background from there, and the COL is such that we could live OK on a social security check.

      • TheDreamer says:

        Thanks Frederick – the International Perspective is really helpful. I think if one thing is clear – is this time the regular people around the world are all in it together. What’s interesting is this time we’re all very aware of our collective misfortune and suffering at the hand of over-financialization.

        Still – I think it sounds like you’re doing a smart thing relocating to a place your money goes far! It seems more and more like the only way to win these days is to not play the game and try something else. Previously we talked about Permacutlure and houseboats.

        I think I have to agree with Alex though – I think Laundrymats are not what they once were it sounds like. I’d like a dog, but it’s hard to take care of one on your own. Still, you made my day with a laugh so that’s good! There is definitely things to be positive about – just hard when I think all of us are so in tune with the economic nonsense going on. My big thing is just finding a nice girl, who isn’t insane (I know I’m asking for a lot) with a good head on her shoulders, and is moderately physically fit and I’ll say yes Cute. I’d also like someone with at least some sense of domesticity and femininity. How is it I know how to cook more things than 80% of the girls I’ve met lately??

        To take it back to the topic of rents – I’m just shocked by the number of people that “live on their own” but are essentially at the mercy of a takeout food lifestyle. In high school I complained we didn’t have Home Ec and auto shop – I now see that was a very, very bad thing for America indeed. All the more reason to bring back the Civilian Conservation Corps – remedial lessons in life are greatly needed! Also, a good way to get young people retrained and pay off their student loans with community service and learn a trade and build self-esteem at the same time!

    • Dan Romig says:

      The StarTribune cover story on the Business page Thursday, 1 June:

      My next door neighbor is a Minneapolis City Council Member (and a good friend who has taken the job to help make our city a better place), so I will ask about the zoning variances of four story wood framed buildings???

      Over the last couple of years, there have been quite a few apartment/condo developments near the light rail lines, and while I have not been inside one, watching them being constructed makes me share TheDreamer’s opinions on them. Most of these buildings do look like “ugly forms of architecture” at least on the exterior.

      Good luck to you in your quest to find a place to live Dreamer.

      • TheDreamer says:

        Dan – thanks for the Article – I am blown away at just how many more units they are planning on building. Someone is going to take a huge loss on these, or not going to get even close to what they thought they were. It’s easy to disparage “government” but yes – it is people – most of whom have good intentions. I recommend going inside them – they are very poorly made and designed.

        My biggest complaints on them are:

        1) none of these new buildings have a carriageway for Pick-up and Drop-off. The traffic has gotten really bad as the streets are now full of double-parked Ride-Shares and food delivery. I cannot think of a way to fix this without eliminating street parking. Ideally, they would have built it in. Something like this would have made the whole thing way more pleasant from a public point of view –

        2) Most buildings are residential only – other cities tend to have at least some commercial space at the bottom. Mixed Use buildings tend to weather economic cycles better in my experience

        3) The windows – floor to ceiling gives you negative privacy – they all have this opening thing at the bottom like this – – I am terrified a small child is going to crawl out of one. I still remember being a kid and my mother telling me about the song “Tears in Heaven” and that’s why there are no windows that can open in Hotels. I would never, ever feel comfortable having a family in any of these units. Why did they put this part of the window on the Bottom??? It just baffles me. They all have it.

        4) The WoodFrame construction makes the soundproofing non-existant. No one bothered to make up for it with insulation. I suspect the utilities are also very high.

        5) Uptown now has almost no public space left, there is no community park area. That one lot left could be turned into a park, it might save the whole area. Otherwise, it feels like it’s strangling itself.

        6) Dedicated parking – it seems like no one built adequate parking. Some buildings have a ton, others none. This gets made worse due to item #1

        A year or two back I’d hoped to buy one of the older homes in Minneapolis, but I got priced out. All the fixer-uppers they wanted almost $200k and they would need at least another $50k in renovations. Even if I did everything I could, that’s still likely 2-3X too high that I can afford even on my software salary. After looking at places this weekend I am likely moving out of Minneapolis to a suburb. They have lowered rents dramatically, even compared to when I moved here 3 years ago. Who knows, if prices come back down maybe I’ll come in and buy – I do still think this city has a lot to offer, but unfortunately, at this point, I’ve been priced out of the city, particularly when I factor in commuting times and quality of life. If I can save $500 bucks by being a bit further out – and I can’t afford to go eat out anymore, I’d rather save the money and do things like travel.

    • Dave says:

      I enjoyed your rant. The ptice and quality of things are perverted right now. There will be a day of reckoning though. I don’t know when.

  8. PrototypeGirl1 says:

    At my Apts in Tulsa they have lowered the cost of doing a load of laundry by 97 cents, they’ve never done that before. They have also re-blacktopped all the roads and parking spots. I would not be surprised if they lowered the rents which have remained the same for about 5 yrs.

  9. Joe says:

    I live in Seattle (Eastside area)..Here house price are crazy ..I don’t think 10,000 jobs opened , but normal hiring is there ..rents are going to south

    but homes are selling 50K above listed price..too crazy

    • Seattle Rattler says:

      In Seatttle and rents are falling for sure. Lots of selection too.

  10. meme Imfurst says:

    Humm…this might have the list beat for expense and charm too.

    Key West:
    the square footage of a garage is a two bedroom apartment and in ‘Old Town” that is about 3,500 plus utilities. The bonus is the garbage truck early in the AM since your apartment has no sound or thermal insulation, not to mention the barking dogs and the tour train blaring out fake history of the city each hour. Parking your car, if you have one, is a daily miracle. Once out of ‘Old Town’ you might save 500 a month. The city has decided to be a landlord and now has “AFFORDABLE HOUSING” starting at 2,900 a month and requires an income of 94,000 minimum. How’s that for numbers?

    Yep Paradise where you only need three jobs to survive…may be.

    • Petunia says:

      Who makes 94K working in Key West? Cops and drug dealers?

      • Meme Imfurst says:

        Petunia…perhaps that is a question for the Key West City Commission who ignored all the recommendation not to get into this.

        The Navy sold the property to Balfore Batty a UK company ( with out telling the city or even offering it) for 11 million dollars, and paid no taxes either, I may add. The heat was so bad about this that Balfoe Batty offered it to the city for 33 million dollar two years later. Politians don’t mind dollar amounts since the tax payers are footing the bills.

        This company now owns Navy property all over Florida, check into it.

        • Petunia says:

          Florida is long overdue for rent control. Why not start a push for it there in Key West? There are numerous jobs available there and no place for workers to live. The idea that the voters are pushing for rent control will scare the **** out of politicians on both sides of the aisle.

  11. RD Blakeslee says:

    It’s hard to find a way to comment on the misery suffered by renters in high density population areas (i.e. any city) without getting a backlash for it.

    Suffice it to say, there is a way out “out of town”, for every person who has the fortitude to find it.

    Admittedly, it will be tougher the older you are when you make the break.

    • Frederick says:

      Agreed I’m almost 63 and very young for my age but now that I’m getting used to it I’m not sure how I lasted all those years in the Hamptons Having a local woman as my wife certainly doesn’t hurt as I’m a legal resident and eligible for healthcare benefits Her cousin is a cardiologist in Istanbul which is nice to know at my age lol By the way the numbers just came out from the BLS and 608 thousand more people dropped out of the labor force last month Not great news for housing I would think

  12. Boo Randy says:

    The number of people “not in the work force” (but not counted as unemployed) soared to 94.983 million in May, up from 94.375 million in April. How are these people, or more accurately the taxpayers or relatives supporting these jobless-but-not-drawing-unemployment people, going to afford these exorbitant rents?

    • JOn says:

      This would eventually blow up. Labor participation rate is low but the employment report masks the real condition

  13. R2D2 says:

    One thing that I have noted about Bay Area is that the number of rentals posted on Craigslist has dropped from its peak, but now you can rent a one bedroom apartment for the same price that you could rent a studio. So, the rents definitely have dropped significantly since last year, same time, but I don’t get it why the number of postings has decreased. Did the landlords get tired of posting rentals and not get any responses?

    I know that the building that I am in has a huge problem getting renters since the building manager is a friend and tells me what is going on, but they have no postings on Craigslist to get tenants.

    • Wolf Richter says:

      Craigslist appears to have a maximum of 2,500 listings for the number that it shows at the top as in: “1-120 / 2500.” So if you look for apartments in the Bay Area you get a maximum of 2,500. If you then narrow the search to San Francisco, you still get the same maximum of 2,500. But if you go to a smaller market in the Bay Area, such as Santa Cruz, you get “1-120 / 321.”

      In other words, we don’t know by looking at Craigslist just how many units are for rent in the Bay Area or in San Francisco. We just know the listings exceed 2,500.

      • R2D2 says:

        Thanks Wolf; Just so that you know, in the map mode, you can view the total numbers; just go to the map mode of the postings, and then zoom out.

  14. Jon says:

    This is what the future of America would be..
    ONe of the richest place on the earth has to offer this: Mobile shower for homeless…

  15. Todd says:

    Rents are NOT up in Houston, despite the chart. As you stated in the article, these are asking prices. Got a 20% rate decrease last year. Looking for a new apartment and ALL are offering at least two months free. The statistics are also skewed by all the new “luxury” apartments being built. Prices for these are high, But they also offer two months free with one complex offering three. And, about 2,000 more are coming online in the next 18 months. FYI…they now build 6 story apartment buildings with wood frames!

    • Wolf Richter says:

      Thanks. I was wondering about that. I’ve seen a lot of “mixed” data on Houston. So I wasn’t sure where the surge in asking rents came from. But it could be, as you suggested, the new high-end developments coming on the market that are skewing the stats.

    • Frederick says:

      What’s with the free month nonsense That seems like a scam or a trap to me Sort of like the Zero interest for 12 months crap Don’t people understand it’s the final cost that counts? Wow

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