Many people will say that now is the time to buy, and they would be correct. Fewer people will say that now is the time rent, and they would be correct as well. We’ve written a little bit more about the home buying aspect as of late, so now we’ll try and go into how much rents have decreased, why they have declined, and what the recovery looks like.
In 2009 rental reductions averaged 5.8% nationwide. There are many markets that have not seen a decrease at all, while other have decreased well into the double digits percentage points.
2009 was not the best year for our economy. Many factors helped the rental market stay strong and not completely and totally die. In 2009 many borrowers foreclosed on their home, forcing them into a rental situation. Many people were forced into a roommate situation, or increased roommate situation. The largest rental age group, 20-34, increased and is expected to increase by about 5 million people over the next 10 years. Also there was not a gross over building problem in the rental market, or at least as much as there was on the sales side of real estate. Even with the economy taking a turn for the worse, these factors kept the average decline below the double digits.
As jobs are created and the economy strengthens, many things will change. Roommate situations will decrease, family members will move back into rental units, and the demand for rentals will begin to grow again. Currently vacancy rates are estimated at about 8.8%, and will drop to about 6% between 2011 and 2013.
What should you do about this? If you know you will be in Boston for more than the next year, you should find your next apartment or resign your lease as soon as possible, before the market begins to fix itself. 5 months from now (when most will make a move if they are going to move in 2010) the market can have a completely and totally different landscape. Rents may start to increase, and as apartments are taken off the market, demand for the remaining apartments will increase and drive cost up, or keep pricing stagnant.
In order to get the best deal and most effectively negotiate your rent you should first do some research, find out what similar apartments in same neighborhood are renting for. What is the vacancy rate in that area?. Decide what you need in an apartment and what you want. Are you able to sign more than a one year lease?
Although you want to find the apartment of your dreams, many times that does not match up with your financial situation. Finding an apartment at the right price may come along with a compromise. You may need to agree on a longer lease term, or pay several months up front. If you’re unable to secure a rent as low as you would like, many landlords are willing to partially renovate, reduce move in costs such as security deposit and last months rent, or make some other consolation to prevent their property from being vacant an additional month.
Do you have any tips for renters from your experience? What are some best practices for negotiating a deal on your next apartment?
As always you can contact us at info@ProperRealtyGroup.com with any questions or concerns. Having an experienced real estate professional on your side will enable you to secure the best apartment at the best price!
Tags: Apartments, Market Forecast, Rentals, Vacancy Rate