Rents are on the move, but not in the same direction.
In San Francisco, the most expensive major rental market in the US, the median asking rent in January for one-bedroom apartments rose 2.7% year-over-year to $3,400, but is down 7.4% from the peak in October 2015. For two-bedroom apartments, rents fell 2.2% to $4,400 and are down 12% from the peak in October 2015.
These declines from head-spinner peaks, in a city where housing costs turned officially into a “housing crisis” years ago, are not much of a relief for renters and not yet a headache for landlords, but a sign that new supply from the construction boom – most of it higher end – is having an effect.
In New York City, the second most expensive major rental market, the median asking rent for one-bedroom apartments fell 1.4% from a year ago to $2,870 and is down 14.8% from the peak in March 2016. For two-bedrooms, it fell 1.2% to $3,280 and is down 17.6% from the peak in March 2016.
Those declines do not include incentives, such as “1 month free” or “2 months free,” which reduce the effective rent for the first year by 8% or 17%.
The data is based on asking rents in multifamily apartment buildings. Zumper gleans this data from active listings in cities across the country and aggregates it into its National Rent Report. The data does not include single-family houses and condos on the rental market. Unlike some other types of rent reports, this data includes asking rents from new construction.
Biggest trouble spots among the most expensive markets.
Honolulu, 11th most expensive rental market: 1-BR asking rents fell 4.6% year-over-year and plunged 22.5% from their peak in March 2015. 2-BR rents plunged 10.2% year-over-year and 25.4% from their peak in January 2015.
Chicago, 12th most expensive rental market: 1-BR rents plunged 14.4% year-over-year to $1,550; and 24.4% from the peak in October 2015. 2-BR rents plunged 13.8% year-over-year to $2,070; and 21.9% from their peak in September 2015.
Oakland, 7th most expensive rental market and once the destination for San Francisco’s rent refugees: 1-BR rents fell 0.5% year-over-year to 2,100 and are down 13.2% from the peak in April 2016. 2-BR rents are down 5.0% year-over-year and 16.0% from the peak in April 2016.
No metro among the 12 most expensive major rental markets set new highs in January. But double-digit year-over-year gains were booked in Washington DC, Los Angeles, and San Diego. In this table, the shaded area indicates peak rents and the movements since then. Note the number of double-digit declines from the peaks:
Despite Seattle’s strong economy…
The median asking rent for one-bedrooms in Seattle is now down 6.2% from the peak in August and the median two-bedroom is down 9.4% from the peak in April 2016. Why?
Seattle faces an onslaught of supply. Nearly 12,000 apartment units were completed in 2017 in the metro area, just counting buildings with over 50 units. There are nearly 25,000 units under construction and an additional 35,000 units in the development pipeline. Nearly all of it is higher end. This does not even include smaller buildings or condos that might show up on the rental market [Once Hot Seattle Apartment Market Hit by Onslaught of Supply].
Other major cities – including New York City and San Francisco – have experienced similar construction booms of mostly of higher-end apartments.
But rents soar in many mid-tier metros.
In “mid-tier” metros – “mid-tier” in terms of the rent – asking rents are decidedly a mixed bag, plunging in some cities such as New Orleans (1BR rents -5.3%, 2BR rents -15.6%) but soaring in others. Here are some markets with double-digit year-over-year increases (1 BR and 2 BR apartments):
- Denver, CO (+13.9% and +13.0%)
- Baltimore, MD (+15.6% and +13.1%)
- Sacramento, CA (+15.5% and +11.7%)
- Salt Lake City, UT (+15.9% and +15.0%)
- Louisville, KY (+15.2% and +14.3%)
- Reno, NV (+15.1% and +14.3%)
The peculiar divergence phenomenon
Starting in November, a phenomenon became strongly apparent in the data: a divergence between 1-BR rents and 2-BR rents, with 1-BR rents rising faster or at least declining more slowly than 2-BR rents.
This is the case year-over-year in 9 of the 12 most expensive metros in the table above. For example, in San Francisco, one-bedrooms rose 2.7% year-over-year while two-bedrooms fell 2.2% year-over-year. And it was the case in 68 of the 100 most expensive rental markets (table below).
In other words, starting in November, on average, the one-bedroom rental market has become hotter or at least “less cold,” depending on the city, than the two-bedroom market.
According to the Zumper National Rent Price Index, the median one-bedroom asking rent across the US soared 7.6% in November year-over-year, 9.9% in December, and 8.8% in January, while two-bedroom rents were rising about 2.5% over the same period. The blue line (1-BR year-over-year rent increase) shows this phenomenon:
Below is Zumper’s list of the top 100 most expensive rental markets and their median asking rents. You can look for a specific city by using the search function in your browser:
| City | 1 BR Rent | Y/Y % | 2 BR Rent | Y/Y % | |
| 1 | San Francisco, CA | $3,400 | 2.7% | $4,400 | -2.2% |
| 2 | New York, NY | $2,870 | -1.4% | $3,280 | -1.2% |
| 3 | San Jose, CA | $2,460 | 9.8% | $2,780 | 3.7% |
| 4 | Boston, MA | $2,300 | 0.9% | $2,700 | 3.4% |
| 5 | Washington, DC | $2,280 | 14.6% | $2,950 | 12.2% |
| 6 | Los Angeles, CA | $2,220 | 11.0% | $3,200 | 10.3% |
| 7 | Oakland, CA | $2,100 | -0.5% | $2,470 | -5.0% |
| 8 | Seattle, WA | $1,830 | 2.2% | $2,400 | -2.8% |
| 9 | Miami, FL | $1,770 | -1.7% | $2,450 | -2.0% |
| 10 | San Diego, CA | $1,710 | 6.9% | $2,250 | 2.3% |
| 11 | Honolulu, HI | $1,650 | -4.6% | $2,200 | -10.2% |
| 12 | Chicago, IL | $1,550 | -14.4% | $2,070 | -13.8% |
| 13 | Long Beach, CA | $1,500 | 11.1% | $1,930 | 4.3% |
| 14 | Fort Lauderdale, FL | $1,450 | -3.3% | $1,840 | -2.1% |
| 15 | Atlanta, GA | $1,430 | 6.7% | $1,850 | 9.5% |
| 16 | Philadelphia, PA | $1,400 | 2.2% | $1,500 | 0.0% |
| 16 | Providence, RI | $1,400 | -6.7% | $1,440 | -4.0% |
| 18 | Denver, CO | $1,390 | 13.9% | $1,820 | 13.0% |
| 19 | Scottsdale, AZ | $1,340 | 11.7% | $2,160 | -8.1% |
| 20 | Portland, OR | $1,330 | -5.0% | $1,600 | -0.6% |
| 21 | Minneapolis, MN | $1,320 | 0.8% | $1,760 | -3.3% |
| 22 | Dallas, TX | $1,300 | 0.8% | $1,710 | 0.0% |
| 23 | Nashville, TN | $1,290 | 5.7% | $1,400 | 6.1% |
| 24 | Baltimore, MD | $1,260 | 15.6% | $1,470 | 13.1% |
| 25 | New Orleans, LA | $1,240 | -13.3% | $1,410 | -15.6% |
| 26 | Charlotte, NC | $1,200 | 6.2% | $1,240 | 3.3% |
| 26 | Houston, TX | $1,200 | 0.8% | $1,480 | -0.7% |
| 26 | Madison, WI | $1,200 | 0.0% | $1,320 | -1.5% |
| 29 | Sacramento, CA | $1,190 | 15.5% | $1,340 | 11.7% |
| 30 | Irving, TX | $1,160 | 9.4% | $1,410 | 8.5% |
| 31 | Austin, TX | $1,150 | 1.8% | $1,450 | 1.4% |
| 31 | Plano, TX | $1,150 | 9.5% | $1,500 | 5.6% |
| 33 | Gilbert, AZ | $1,140 | 15.2% | $1,340 | 8.1% |
| 34 | Orlando, FL | $1,130 | 13.0% | $1,300 | 8.3% |
| 35 | Virginia Beach, VA | $1,110 | 13.3% | $1,200 | 4.3% |
| 36 | Tampa, FL | $1,100 | 10.0% | $1,290 | 7.5% |
| 37 | Henderson, NV | $1,090 | 11.2% | $1,190 | 8.2% |
| 38 | Chandler, AZ | $1,060 | 14.0% | $1,200 | 6.2% |
| 39 | Pittsburgh, PA | $1,050 | -8.7% | $1,250 | -2.3% |
| 40 | Newark, NJ | $1,040 | 8.3% | $1,200 | 0.0% |
| 41 | Aurora, CO | $1,030 | 3.0% | $1,320 | -0.8% |
| 42 | Richmond, VA | $1,020 | 8.5% | $1,160 | 14.9% |
| 43 | Durham, NC | $990 | 6.5% | $1,120 | 6.7% |
| 43 | Fort Worth, TX | $990 | 7.6% | $1,210 | 10.0% |
| 43 | Jacksonville, FL | $990 | 15.1% | $1,050 | 1.9% |
| 46 | St Petersburg, FL | $980 | 15.3% | $1,470 | 8.9% |
| 47 | Raleigh, NC | $970 | 2.1% | $1,150 | 4.5% |
| 48 | Salt Lake City, UT | $950 | 15.9% | $1,230 | 15.0% |
| 49 | Chesapeake, VA | $940 | 3.3% | $1,200 | 4.3% |
| 49 | Syracuse, NY | $940 | 13.3% | $990 | 4.2% |
| 51 | Phoenix, AZ | $930 | 10.7% | $1,100 | 6.8% |
| 52 | Louisville, KY | $910 | 15.2% | $960 | 14.3% |
| 53 | Anchorage, AK | $900 | -3.2% | $1,100 | -4.3% |
| 53 | Buffalo, NY | $900 | -4.3% | $1,050 | -11.0% |
| 53 | Kansas City, MO | $900 | 3.4% | $980 | 6.5% |
| 56 | Fresno, CA | $890 | 4.7% | $1,000 | 2.0% |
| 56 | Las Vegas, NV | $890 | 14.1% | $1,000 | 6.4% |
| 58 | Boise, ID | $870 | 8.7% | $950 | 0.0% |
| 58 | Corpus Christi, TX | $870 | 6.1% | $1,080 | 10.2% |
| 58 | Mesa, AZ | $870 | 13.0% | $940 | 2.2% |
| 61 | Milwaukee, WI | $850 | 9.0% | $900 | 1.1% |
| 61 | San Antonio, TX | $850 | -5.6% | $1,080 | -6.1% |
| 63 | Colorado Springs, CO | $840 | 5.0% | $1,020 | 1.0% |
| 63 | Omaha, NE | $840 | 13.5% | $910 | 4.6% |
| 63 | Reno, NV | $840 | 15.1% | $1,200 | 14.3% |
| 66 | Baton Rouge, LA | $820 | -1.2% | $900 | -8.2% |
| 67 | Glendale, AZ | $770 | 11.6% | $860 | 0.0% |
| 67 | Rochester, NY | $770 | 11.6% | $930 | 9.4% |
| 69 | Bakersfield, CA | $760 | 8.6% | $870 | 7.4% |
| 69 | Chattanooga, TN | $760 | 11.8% | $800 | 8.1% |
| 69 | Laredo, TX | $760 | -6.2% | $900 | -6.3% |
| 72 | Cincinnati, OH | $750 | 5.6% | $970 | 5.4% |
| 72 | Knoxville, TN | $750 | 11.9% | $830 | 6.4% |
| 72 | Lexington, KY | $750 | -5.1% | $930 | 0.0% |
| 75 | Arlington, TX | $720 | 5.9% | $960 | 7.9% |
| 76 | Cleveland, OH | $710 | 10.9% | $750 | 4.2% |
| 76 | Des Moines, IA | $710 | -14.5% | $750 | -14.8% |
| 76 | Tucson, AZ | $710 | 12.7% | $840 | 7.7% |
| 76 | Winston Salem, NC | $710 | -2.7% | $760 | 1.3% |
| 80 | Norfolk, VA | $700 | 6.1% | $900 | 2.3% |
| 80 | Spokane, WA | $700 | 6.1% | $870 | 8.7% |
| 82 | Oklahoma City, OK | $690 | 13.1% | $750 | 0.0% |
| 83 | Augusta, GA | $680 | 3.0% | $790 | -1.3% |
| 83 | Greensboro, NC | $680 | 7.9% | $790 | 5.3% |
| 83 | St Louis, MO | $680 | -6.8% | $1,000 | 0.0% |
| 83 | Tallahassee, FL | $680 | 4.6% | $800 | 5.3% |
| 87 | Indianapolis, IN | $650 | 14.0% | $730 | 10.6% |
| 88 | Memphis, TN | $640 | 10.3% | $690 | 15.0% |
| 89 | El Paso, TX | $630 | 0.0% | $740 | -2.6% |
| 90 | Columbus, OH | $610 | -3.2% | $950 | 0.0% |
| 90 | Lincoln, NE | $610 | -15.3% | $810 | -5.8% |
| 92 | Albuquerque, NM | $600 | -3.2% | $800 | 1.3% |
| 92 | Tulsa, OK | $600 | 9.1% | $740 | 1.4% |
| 94 | Toledo, OH | $570 | 14.0% | $630 | 12.5% |
| 95 | Shreveport, LA | $560 | -3.4% | $640 | -8.6% |
| 96 | Lubbock, TX | $550 | 0.0% | $700 | 2.9% |
| 96 | Wichita, KS | $550 | 7.8% | $670 | 6.3% |
| 98 | Detroit, MI | $540 | -1.8% | $630 | -3.1% |
| 99 | Akron, OH | $530 | 0.0% | $660 | 1.5% |
| 100 | Fort Wayne, IN | $490 | 2.1% | $580 | 1.8% |
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It looks like flyover country is getting a taste of what the coasts have had to deal with since 2011..People generally don’t notice when rents are falling because most are locked into lease and the new-to-renting are still going to be shocked at the asking prices. But everyone is aware when rent prices go up dreading the day their lease expires and how much will their rent increase be because everyone knows, including the landlord, it will just be cheaper for the tenant to pay up rather than go through the considerable costs of moving.
I haven’t heard anything yet from friends if they’ve noticed a softening in the market in Seattle but have heard from those with businesses with office and craft spaces that they’re giving up their apts. to live in their shops..
This is getting to a point where a very large percentage of renters in the US is spending perhaps more than 50% of their disposable income on their rent.
I’d be interested to see for many Americans:
Wages – Taxes – Health insurance – Rent – Transportation – Food = What’s left?
For many, that’s probably in the red.
What is causing LA and the Washington DC area to boom? They seem to be seeing sustains in growth here.
I know why Chicago and New Orleans are declining, crime. I look at the NOLA news regularly and it’s like the wild west. We cancelled a vacation there last summer because there were more than a handful of shootings, in the tourist areas, the week before we were going.
Petunia,
I think Chicago is declining because Illinois is bankrupt and intent on hitting residents to pay (unpayable) pension obligations.
Residents are moving out of the state.
Those pension obligations became “unpayable” because they were underfunded for years, as politicians dipped into them for general operating funds, since they were so busy privatizing public services and providing corporate welfare under the guise of “economic development.”
Also unmentioned is the fact that pensions legally represent “deferred compensation.” In other words, those public employees agreed to work for less than they might otherwise have received in the private sector, with the pensions intended to compensate for that.
Instead, the Overclass has its sights set on looting the pensions of current and prospective recipients, and denying them entirely to newcomers.
Petunia – Suffice it to say the erroneous claims regarding Chicago’s crime rates are greatly exaggerated by certain individuals for political gain only .. not the dissemination of the truth ….
…and anyone who lives there would agree with the above completely
Which is to say … andy has the correct answer . The entire state of Illinois is on the verge of financial implosion .. with Chicago despite its many resources being on the verge of becoming our next Detroit as the rot of the Rust Belt weaves its slimy tentacles thru out a Mid West steeped within its ” Culture of Complaint ” and blatant victimhood regardless of the multiple opportunities available for those willing to change and grow with the times
Andy,
I lived through the bankruptcy of NYC, no one moved because the city got more expensive. I left when the drive by shootings hit 2K+ in one year. As a woman with a young child, I didn’t feel safe anymore doing normal things.
CPI Rental Index shows annual increases from 2.8 to 3.6% over the last 5 years (https://fred.stlouisfed.org/series/CUUR0000SEHA)
I was looking at moving into “affordable housing” since I’m disabled. Just to move? $3,000…… No garage and it was the size of about a Two-car garage. Rental for storage was $150.00… I could go on. In the end, either way, I’m screwed as I don’t work, our government is broke and I’m going to pay a few thousand to move in order to keep a roof over my head for 8 months longer? With no storage? And giving away furniture since most of it won’t fit anyway…?
The prices can’t drop soon enough, and they won’t. It’s inhuman to make a commodity, versus a home, out of shelter. I have no respect for those who invest in Apartments, banking on an increase in property values versus wages, which have been in decline for decades, to suck the life out of their tenants while finger wagging about how it’s irresponsible to mortgage a home one can’t really afford.
Horridly, I’m guessing that the Edgar G Robinson, Soylent Green moment is coming soon, as many increasingly cannot afford apartments, let alone houses; No matter how hard they work/worked in life. I’d also guess that California will be the first ugly state to legalize voluntary suicide due to poverty alone. I would bet that some have joked about it behind closed doors in Sacramento for quite some time now given the last blockade of Rent Control.
Horrifying and sickening.
Edward G. Robinson So we all look forward to the correction/collapse to realign rents to a more reasonable level. But cannot imagine the inner city reality where mindless corporate cubicle clowns, released from their employment by the prevailing economic conditions, mill around aimlessly with the traditionally disadvantaged, in a dis-topic carousel of criminal behavior; an entitlement driven menagerie of drug use, prostitution, assault and hate.
What is your solution to an ever-increasing population on a finite planet? I think about this periodically – we could all drive tractors, live on acreage, and pollute all we want without ill effect, were the population sufficiently small.
As you say, we could improve the quality of life for all at present, but I still think the elephant in the room is population size and energy consumption (transportation, food production, etc). In other words, whatever efficiency/fairness improvements you might want will only buy us time, but do not address the fundamental problem of population growth which will always result in low quality of life.
Great post.
Furniture Girls
Well, I wasn’t making the analogy as regards overpopulation, I was making the analogy to focus on unaffordable housing and forced poverty. And there are many things that could be done, particularly by a government which claims such a high moral ground. Number one is that housing (education and medical care) should not, should never have been, treated as a commodity versus an absolute necessity.
Some other suggestions which should be penalized by shunning at the least, if not legally, when not followed: hire one’s own community members and local college (and not just from the Ivy Leaguers) graduates first (and what has happened to on the job training, and job manuals); dump the racism and acknowledge age old inequities which have crippled people financially; stop treating those under retirement age like they’re over the hill, and have lost their highly functioning minds and wisdom gained through experience, yet vote in Federal and State politicians whose average age is over 70; provide equitable wages which should afford housing (e.g.); stop replacing humans with dysfunctional algorithms; treat elderly people and the disabled like one would want their own elder, or disabled relatives they love treated. And then – taking Silicon Valley as a perfect example of chilling inhumanity – politician’s housing and cost of living should not be subsidized by the public for them to live in an area that same politician has made housing and cost of living unaffordable in (This woman is a particularly notorious example of this).
Lastly, there are loads of “Non-Profits” (and I’ve ceased wanting to know the pedigrees of and how much their VIPs ‘earn,’ after seeing too many ugly surprises) claiming to aid the impoverished, yet utterly refusing to address – LOUDLY AND CLEARLY – why the problem persists and is exploding, instead of lectoring their impoverished, captive ‘clients’ about how to budget the cash which they’ve been sucked dry of throughout the years.
Very sorry, I left out an end link code. There were two links above, which should have read and linked as follows:
Nonprofits generally lack the clout and capacity to deal with fundamental causes — if you’re blaming them for high rent, there’s something off in your analytical approach.
Nick,
I never blamed the Non-Profits for creating the high rent, what I noted:
All one need do is take a look behind the scenes (and out of a building curiosity I have, over the last decade where rents have tripled in my neck of the woods) at the salaries, backgrounds and pedigrees of the VIPs in many Non Profits, to realize they seem to have a business interest in not revealing the injustice causing the ever exploding poverty. Just for one example, a certain huge defense company (whose political pull, power, database, and attorneys I’m afraid of, so I won’t mention its name), is never called out, but I’d love a thousand dollars for every early retired certain huge defense company engineer, or in one case, I’m personally familiar with an Woman Payroll Manager employee who was early retired, and replaced with a far lesser paid employee. I’ve never met, nor heard from others, about anyone who previously worked there who said they were a fair company to work for. One early retired Silicon Valley engineer ended up barely able to make ends meet and recently died of cancer. I’ve never seen one even slightly critical comment about that certain huge defense company from the surrounding large Non Profits, and certainly none about the hideous demographics and PUBLIC SUBSIDIZING of the Campus Crew of Apple, Facebook, Google and Amazon.
You know something is wrong with the world Neo, but you don’t know what it is.
Your posts adress specific people and matters that you’ve encountered in your daily life rather than the real source of your housing woes – and it’s not about social justice or the way your politicians ‘think’ (it’s much more boring).
Since the 1980s most of the third and second worlds (i.e BRICS-Brazi, India, China, Russia) began running increasingly larger trade surpluses with the USA. That is the USA was not producing domestically, hence it was buying foreign goods and handing US dollars over to buy them.
That’s trillions of US dollars that left this country, closing factories and ending productive lives.
So you want to know why the rent is so damn high? Well those US dollars in foreign hands are now coming home and buying up homes and apartment complexes. On top of that, we have cheap money from the Federal reserve which spurred a buying spree of existing homes and apartment complexes after the financial crisis that continues today. The financial world needs the ‘safety’ of housing investments because bond yields have been very low since 2009 . All very boring.
What can you do? Basically nothing, except move abroad, It’s only going to get worse here. Just look at the housing crisis in Vancouver!.
I hear Thailand is cheap.
So very true about extracting from workers for basic shelter.
It’s not just areas of the US.
Some of the landlords have become giant squid.
This level of wealth extraction by the land owning class will lead to A backlash. Only a matter of time.
It already happened. Trump was elected. Not a terribly effective backlash. But no one said the backlash would be effective.
Yep, I hope I live to see it. I’m heartsick that near everyone I know and love is in a perpetual state of despair at the perpetual and increasing worldwide wars, while safety nets and infrastructure in the US are in utter shambles; chilling and thoroughly violating technocracy which has been created; and economic fear, as financial predators run rampant with no punishment whatsoever.
Ben Bernanke did this, he destroyed the currency and now your dollar doesn’t buy much. The lie is repeated over and over “inflation is too low” – meanwhile people can’t afford to rent apartments. Oh well, somehow prices are skyrocketing but at least we don’t have any inflation to worry about (according to crusty old Ben).
I’ve come accept the cost of housing is out of reach in my country so I live in a van. When the cost of food shoots out of reach I will simply steal food until I’m arrested – after that the government will be buying my meals. Gotta have a plan for the future.
Very, very sorry to read you’re living out of a van, our government is shameless in what the Banks were allowed to destroy.
Would you really want to live in an apartment building owned by the government and populated mostly by welfare families or recipients of Section 8 housing vouchers? The New Public housing Act passed by Coingress in 1937 during the Great Depression with the best of intentions. But for decades, public housing neighborhoods have been beset by criminal behavior. Conditions became so bad in some projects that they were torn down. When I lived in Chicago many years ago, the Robert Taylor Homes (built in 1962 and since torn down) was known by the locals as the Congo Hilton.
Such would never have happened given all had equal footing in society, and to this day, they not only don’t but it’s gotten far worse.
Sorry but I’m not even going to debate that one any further, other than to say I’ve witnessed, up close and personal how unfair things are for so many for decades; in my profession (which will go unmentioned), I witnessed (and was economically punished for it) helplessly, as utterly sanctified thieves not only got away with their thievery, but moved up the totem pole for it.
In first-world nations housing is considered a human right.
Think about it: Life expectancy for homeless people is in the mid-50s. That homeless guy or gal who looks like they’re 70, might be barely 50.
Could it be that 1-BR rent is increasing faster because roomies are doubling up in one room?
Or maybe the opposite; roomies in two bedroom apartments are moving out each into their own one bedroom apartment, which might explain the increasing demand for one bedroom and decreasing demand for two.
From what I see in my own 16 unit complex in Tampa there are 2 types of renters:
1) professionals like me who still aspire to home ownership one day and live in a median-priced apt so that we can stack enough chips eventually to make that happen.
2) 2 dudes/gals who can’t afford a 1 bedroom on their own, so one pays a bit more and gets the bedroom, the other a bit less for the futon or fold-out couch in the living room.
A guy in LA offered to rent out a bunk bed (lower or upper) for 400 a month, but had to share the room with 3 other people. The room did look nice though.
Daughter just rented an apartment in downtown Denver. One month free rent plus a $500 visa gift card. New building that she estimates about 40% leased.
Good for her but what will her monthly rent be once the perks end? Mine lived in Chicago but ditched it all for a small city of 100,000. Same pay and 1/3 the cost.. That might be one reason why rents increased in flyover country and Wolf did list Denver rent increases of 13%+.. Of course with statistics it’s almost always in the rearview mirror. My perspective is Seattle and the suburbs with the craziest building boom one could imagine with nearly everyone, except for the developers, wondering where all of the people were going to come from to fill all of the spaces.. I don’t see a soft landing for anyone.
Denver has a massive oversupply of new luxury apartments – to the point where the city is thinking about bailing out the developers/landlords with a special subsidy program instead of allowing rents to crash…
https://www.wsj.com/articles/denver-has-a-plan-for-its-many-luxury-apartments-housing-subsidies-1515412800
They’ll do anything to prevent housing prices (buy or rent) to come down enough to where they’re affordable.
I don’t get the local official’s obsession with high housing costs in the cities. I always assumed it was motivated by the protection of property tax revenues but I’ve started to wonder if it isn’t really just a selfish instinct to protect their own home values. They may not even realize they are doing it.
This is what I’ve been expecting but it still comes a shock. Capitalism is dying, is the mantra on the left but it’s the capitalists who are killing it. The notion of profit and loss, winners and losers, supply and demand, were just words to gull the naïve.. Denver is debating bailing those who were responsible for people fleeing the city because rents and housing were beyond their ability to pay it.. If this proposal becomes policy that means they have chosen wealthy over regular folks and unaffordable prices will be official policy. Sort of like rent control for the rich.
The realpolitik is they have us by the throat same as 2008.. A genuine bust in real-estate in a few big markets could bring down the whole and if that happens then everything that boomed because of cheap money and few customers will collapse. Cassandras always think it’s just around the corner and we are almost always wrong but this feels like it’s 2005. Then, Sad Sacks were the toast of all of the economic talk shows as the delusional clowns until 2008 when none of the hosts saw it coming and very few high profile economists saw it coming either..
David Calder – that’s been the Socialist stance from Marx on. Capitalism is inherently flawed, that profit-seeking ends up in self-destructive activities like cheaping out on housing, public health, education, roads and water supplies etc. So yeah, we say “Capitalism is dying” all right and as you’ve observed, it’s not done “to” capitalism, it does it to itself.
Once again, the middle class gets nothing.
When I lived in Palm Beach County, the commissioners were always talking about workforce housing for low wage workers. It never happened while I was there. Had they only waived the property tax on any existing house for 5 years they could have achieved the goal. It was all BS, even the developers would have supported building this way. Cutting the budgets would mean their buddies wouldn’t make as much on contracts and jobs.
@David Calder
“Capitalism is dying, is the mantra on the left but it’s the capitalists who are killing it.”
As Alex pointed out, that is exactly what Marx theorized. Capitalism would result in such an unequal distribution of wealth [mainly due to human nature] that societal discord is the end result. It’s pretty straightforward: most people will naturally do everything in their power to better their own situation. Unfortunately that includes things that aren’t in the interest of the general population– like trying to monopolize an industry, or trying to gain undue influence in politics.
There’s really only a handful of pieces necessary for sustainable capitalism. Restraint on the influence of money in politics, regulation in the economy particularly with regards to monopolies and competition, and a robust social safety net.
We obviously don’t have any of that, thanks largely in part to right-wing economic ideology and class warfare against the poor and middle class. The closest thing to regulated, functioning capitalism is probably the Nordic countries… which practice “Nordic capitalism” also known as “Nordic social democracy.” Most uneducated deplorables mistakenly believe this is equal to Venezuela-style socialism.
LessonIsNeverTry
One heck of an article in Jacobin exposing the corruption in NYC property taxes.. By this report, liberals are “wary” about calling out rich donors while reduced to begging for crumbs for the poor. I’ve noticed that Resisters, who are planning on a run in 2018, are also planning on primarying liberals who are in the pockets of the deadbeat rich.
https://www.jacobinmag.com/2018/01/new-york-property-tax-andrew-cuomo
More proof that Muricans have more money than previously believed.
Rents up, consumption up. And once the infrastructure bill and tax cut are fully factored in, those will go up even more.
I was wondering where this idiot had ended up.
You keep on saying
The trend line on number of months supply of new homes (5.7 months currently which seems high to me ) . Maybe a leading indicator .
https://fred.stlouisfed.org/series/MSACSR
IN San Diego CA, inventory is too low hence price still going up..
Dont worry, as usual our elected leaders will come with a simple solution that will backfire. Here comes rent control for California:
http://www.sacbee.com/news/politics-government/capitol-alert/article197489354.html
Crawlspace ‘apartment’ rental in San Francisco, whatever happened to that? Did somebody finally rent it, and did others convert their own building crawlspaces to add to that underserved market? Do they provide any extra cardboard to use as, ahem, flooring? ;p
It makes sense that 2BR rents fall faster than 1BR.
When many people double up with strangers to drop the rent, the 1BR are the premium units.