Apartment Rents Drop
According to this study. The article points out:
“You’ve got a high vacancy rate of single family homes. If the owner still owns it and it hasn’t been foreclosed, they’re renting it out,” says Victor Calanog, director of research for Reis. “You’ve got competitive property types like condos in South Florida. It’s the shadow inventory story. You’ve got an overall weakness in demand, plus the fact that there’s shadow inventory fighting with standard multifamily property now that’s really putting a lot of pressure on landlords. . .
Based on information gathered on the ground, Calanog says that brokers prescribe one of two ways for landlords to lower rents. First, landlords are offering tenants a long-term lease of say, two years. That provides security and income for two years, especially appealing if rents continue to fall. Second, landlords also have become more amenable to short-term leases of three to six months, he says, “because a short income for three to six months is better than nothing.””
This is no doubt true in the Northwest Arkansas market. Renting your home can be rough on it, but trying to service your primary mortgage and the mortgage on the house you were going to build and flip for a quick profit two years ago can be rough on your whole life.
I was on a plane yesterday and sat next to a woman who had a rental house and a condo in Rogers. She personified the study’s findings as she had taken $200 off the house rent for just a 6 month lease. If you’re a renter and you have a choice of a house and an apartment and the rents are equal, the house is a no-brainer, even with the increased utility costs.