Our population growth doesn't meet that it is because of artificial unavailability of apartments. A 2 month gap between each apartment as people move around because they either wanted to live somewhere else or got a job that paid more. This constant moving causes too many issues like increased cost of living, over hiring (bad company performance) and under hiring (good company performance) each feeding into each other. As the market stabilizes and companies don't rush to make the next battle royale and force massive pay increases because of the above it will stabilize or even plummet back to normal costs. HOWEVER it will cause more vacancies in jobs and more vacanies in apartments because there isn't this queue or artificial unavailability of a role or place to stay which eventually will causes the above to happen again.
>Apartment vacancies are piling up. The biggest wave of new rental buildings in nearly four decades is expected to cut the pace of rent growth across the country.
> Now, many of those same places that shot up in price are seeing slides in demand and rents are going down. Between April and October of 2022, rents fell 3% in Las Vegas, 2% in Phoenix and 1% in Tampa, according to Apartment List. All three of those cities saw rents rise more than 30% during the preceding two years.
> nearly half a million new apartment units—the most of any year since 1986—are expected to complete construction by the end of 2023. That will come after more than 400,000 units were completed during 2022...The coming increase in new apartments is most likely to affect rents at higher-end buildings, because there might not be enough people who make enough money to rent them, according to CoStar.
> many housing economists don’t think job and wage growth will be strong enough to sustain much in the way of rent increases [in 2022]
tl;dr Prices are going down in many of the hottest markets in the country. Vacancies are starting to happen and are expected to increase, particularly in higher-end apartments going into 2023.
I've heard people blame rent increases on eviction moratoriums but that doesn't add up for me. The national eviction moratorium was only on federally funded properties for a very short period.
Some states passed their own laws but most did not last over a year, especially in southern states where renter protection tends to be weak.
Where would it take 16 months to evict a tenant for non-payment in the US?
Yikes. That is a an absolute nightmare for a landlord. Where I live, I can evict a tenant if they violate their rental agreement and they have 3 days to vacate.
How on earth do you see a judge and get a judgement within 3 days? where I live you get a 3 days notice to leave if you want to avoid the judicial process, but you can stay and get your day in court in which case you'll be there significantly longer.
California. But also probably they are counting from first missed payment to actual eviction. Usually you don’t start trying to evict the day after rent was due.
Found in HTML source code for the article contains this WSJ-provided summary in a description meta tag for Twitter, another possible source for this submission's headline:
> "Apartment vacancies are piling up as a wave of new rental buildings are built, cutting the pace of rent growth across the country"
That is a quote from the article - "Apartment vacancies are piling up." But no accompanying graphs or further discussion, other than that sentence itself.
Correct the amount of apartments remain the same. The number of people moving around to new apartments dropped so the 2 month gap from a tenant moving out and into a new place disappears. This was what increased unavailability a constant queue of demand. Suddenly apartment costs will drop and cost of living will follow suit. This is a boon. The tech industry is what stirred this originally where businesses were not stabilizing in the wages for tech. People were forced to move to take a better offer and so it created an artificial inflation purely on the demand gaps. Now people are settled back in post covid and things are just too expensive to move around availability including jobs will skyrocket and the pay will rise too reproducing this exact cycle we just went through. It is a cooling off phase for now.
Sounds like it's time for a market correction, and for the landlords to start doing more work:
> “In 2021 and into early 2022 you could raise rents significantly without doing a lot to the property itself,” said Karlin Conklin, principal of apartment landlord Investors Management Group, which owns buildings in the Sunbelt and on the West Coast. “We don’t see that happening going forward.”
Gotta spend money to make money. Time to lift themselves up by their bootstraps.
Back in my day, landlords weren't lazy. That sounds like a problem these days.
This is not a significant phenomenon driving rent increases. You make more money if you defect from this arrangement and real estate holdings remain diversified in America.
I may be misunderstanding the chart, but it says it misses cash offers on second home purchases. All-cash purchases are on the rise since 2008, so that seems like a pretty large segment that isn't represented.
If a landlord's vacancy rate is lower than the "don't defect" rent increase, then he makes more money by not defecting.
Also - setting rent in a given market is a game that the same landlords play with each other, annually. Strategy is different in multi-round games.
And - back in the 1990's, I knew a few residential landlords in a mid-sized college town. They clearly said that they got together annually, and decided how much to increase their rents.
I don't agree that rental markets can be modeled as an annual multi-round game/sequential auction and would love a cite and how that proves collusion in these markets.
Not if the group colluding collectively control the vast majority of the market. (>70% in some Seattle neighborhoods are colluding with this software.)
I just rented an apartment in Seattle and was surprised by the apparently high vacancies (many units in buildings we looked at were not rented but also not on the market).
Half of the large apartment complexes in my city are owned by the same corporation. They don't even have to collude to set rent, because they are all the same entity.
This is happening in my area. We have insane vacancies right now. It was nearly impossible to get an apartment in 2020 and 2021. But now my current complex is well under 50% full. I see 2-3 people moving OUT every weekend and I've seen only 3-4 people move in since Spring 2022. But the complex is still insisting on raising rents.
I've looked at homes that have been available for Rent for over 4-6 months and they are refusing to negotiate or lower rents. They could have already been halfway through a year long lease on places and they are refusing to rent in order to get an extra few hundred a month in rent and drive up the market.
People are packing up and going elsewhere. New buildings are being built like mad all around us, and I don't know where they expect these people to come from that will pay their high prices. The smaller property management companies are dropping prices like crazy to get vacancies filled, but the large ones are holding strong with high rents. They have probably been banking absurd rents for the past two years and can afford to sit on these homes long enough now if they can keep getting high rents. But jokes on them, inventory is getting too high.
My rent went up 30% in 2021, and went up another 10% last year. They are now asking for another 5% increase this year. I make good money, but I am effectively paying 50% more money for a home thats half the size of what I used to have. I can work anywhere in the country, so I'm not playing this game and I think many others are in the same boat.
Living in a half occupied building is IMO a luxury compared to a full building (fewer neighbors, less people for noise pollution, less congestion in hallways and public areas etc), so it makes sense it would command a premium in rent.
Haha, the same thing happened to me during the pandemic in the SF Bay area. Corporate policy was to raise rents and NEVER negotiate them at all. The building pretty much cleared out.
Meanwhile, I rented a much larger, nicer place for much cheaper from a local human being who values me as a customer.
I live in Tampa and rents are still going up. We're getting more people moving here monthly than any other city in Florida at the moment. (Doesn't help Forbes rated the city the best place to live this year, which I don't agree with, but the hype train is a thing) Well-priced housing is at a premium and moves extremely quickly. So-called Luxury housing is incredibly over-inflated, there's an abundance of it, and if you're desperate or just don't care about throwing money away, you can get in pretty easily because there are a lot of open units. We have an insane amount of new housing here that's gone up the last few years. Renting single-family homes continues to be bananas, with rent ~ $2 sq/ft in South Tampa. I'm paying $1.37 sq ft for a townhouse at the moment, and that was considered a steal when I started renting last year.
> Now, many of those same places that shot up in price are seeing slides in demand and rents are going down. Between April and October of 2022, rents fell 3% in Las Vegas, 2% in Phoenix and 1% in Tampa.
I sure haven't seen that 1% drop. If that's a true figure, I'd wager its the luxury unit companies slightly lowering.
I lived in Tampa for ~10 years (South Tampa for ~6) before moving to Seattle in '19, and the explosion in prices since I left is absolutely insane. It was already overpriced, and now it's just absolutely unhinged. It's not even materially more affordable than Seattle when it comes to renting.
I also can't imagine how people can rate it the best place to live, given the complete lack of public transit and awful road infrastructure.
Has something changed, or is Forbes taking bribes for that best-cities list? I mostly know Tampa as the Florida city that's useful in a joke when someone needs a widely-understood-to-be-terrible city in Florida.
That's interesting, I visited last year and it seemed OK. Everything was way cheaper than the SF Bay, it was clean and easy to drive around, plenty of variety for shopping and restaurants. Not as fancy as silicon valley, but being half the price made up for a lot
What this thread really makes me think is that I need to look into moving back to Seattle.. if Seattle is still half the price of the Bay and only a short flight away, maybe I can find a decent job without too much of a pay cut, haha.
I'm at a bit of a disadvantage since I only work on C/C++ OS/driver stuff, so there aren't as many openings around for me.. Maybe I should pivot to something a little higher up the stack
Have been here 10 years and never heard a joke where Tampa was the butt since being here nor in my 30+ years living in the north. Perhaps you just have a bias?
I've never even lived in Florida, it's just a pop-culture thing. Like how Ohio's a go-to state for "boring" in similar contexts.
[EDIT] I mean I guess the other possibility was that it was never true. I've been briefly a couple times and the city seemed pretty unremarkable, either way, but I wasn't there long and only saw a small part of it.
John Oliver uses it a lot in the way GP described. Tbh, Tampa is definitely the best of Florida's cities, so not sure why beyond wanting to avoid the usual targets.
You might have misread me -- I was responding to the GP's no doubt exaggerated comment about Tampa being oppressively hot every single day of the year, with the opinion that even people who may not enjoy warm weather would nonetheless find the winter months to be pleasant.
It's pretty oppressive at least 9 months of the year, though I'll grant you that 'every single day' is hyperbole.
That said, I'm not super heat-tolerant, and definitely prefer the cold! I also like walking a lot more than driving, so spent a lot more time walking around than the average Tampan, I guess? (Though maybe not anymore now that downtown's been revived!)
The lack of public transportation doesn't bother me in the slightest, and compared to northern states, the roads here are vastly superior. All in all neither are issues for me and my quality of living is exponentially higher here than it was up north. Glad you found a spot that works for you, got to love the ability to do so.
Same thing is happening in East Orlando. Lots of big developers are buying up land in popular urban areas and building mixed use commercial real estate properties. Only thing is the roads can’t handle it and there is no public transit.
I'm in one of the suburbs slightly north of orlando. Rent last year went up $400, and I'm guessing it'll probably be similar with this next year.
I've been wanting to move out of this state for years now, but it feels like everywhere else that's comparable in the US is just as expensive if not more.
Are your jobs portable, either remotely or by virtue of being in demand in most places? If so, you could easily take a leap into a lower-tier (in size and/or stature) city. You're right that anything comparable in quality is in fact likely comparable in price as well.
I personally moved from a tier-1 major metropolitan area to a tier-3 small city, because I found that I stopped caring for the "big city amenities" that made living in the former worth it despite all the pains in the ass. I'm quite happy with my choice.
I work remotely, but unfortunately my SO is in-office with the commercial real-estate industry.
We looked at a small town in AZ (~40,000 people, iirc) that was beautiful and affordable, but unfortunately it didn't seem like she'd have many job opportunities in that area unless she's able to get a remote role or she wanted to drive to Phoenix or Flagstaff every day.
Here in the central MD/PA area I have been watching Zillow daily and favoriting average looking to nice homes with in-ground pools since July 2022.
Prior to June these houses would sell in a day .. starting in October I started seeing these type of home sellers not have the same opportunity those who sold earlier in the year and they started to drop their prices after two to four weeks on the market. Once they drop their prices the house sold in a few days or more.
The nice homes (newer then 2005) with in-ground pools in this area if priced at 350k to 450k (in maryland i prefer PA though taxes are higher) will still go pretty fast.
Overall the market in this area has changed where it's not a sellers market as much as it was prior to June. But overall there really isnt much inventory of said homes (homes that you can buy that are nice enough to flip in a few years or so for a profit) and I think that's indicative of the entire housing market.
Could prices in Tampa have anything to do with baby boomers retiring en masse right now? Also, with the Toronto retirees coming back after the pandemic?
So what? Let normal people suffer, rich people already have the land, and the rights, and the property. Who cares? What are they going to do, sleep in the streets? Some might, but most won't. Nobody cares.
Pretty much wrong in every respect. The property the "rich" rent to the "poor" is usually subject to a loan and loan covenants that require a certain spread (cap rate) so the loan can be serviced and the property maintained. That spread tightens when interest rates, labor and materials expenses increase. Think, inflation.
2 billion or so people were lifted from poverty the past 15 years, increasing consumption and driving global inflation. 15 years ago you were competing with less than 1/2 the number of people for, say, natural gas; and that was before Russia's gas exports were decimated by sanctions.
Many tried to warn of inflation when USGOV stimulus rained down on US citizens & small businesses. With the election looming, nobody listened.
Bottom-line... your elected leaders want to get reelected. They enact laws & policies that are inflationary because the body politic doesn't think long term, follow-on effects & is largely economically illiterate.
You get the economy you deserve, not the one you want.
Did the article headline change, or is it editorialized? Paywall, so can't read beyond the first paragraph, but it appears to be more about rents than vacancies (albeit the two are related).
I'm inclined to distrust all WSJ reporting in this area considering how biased and agenda-driven their articles on remote work, employee productivity, "quiet quitting" etc. have been over the last couple years.
Like jobs, queues/lines and other various things I have a philosophy that this is because vacancies get smaller and push the market costs up as people actively move or switch. If people decide not to switch their job or leave their apartment suddenly there are more demand and vacancies. Basically the constant shuffling of where people live or work significantly create artificial unavailability.
For example it takes months for an apartment to be re-occuppied. One month to clean and move. One month to find a new tenant. Jobs are no different. This is why businesses sometimes over hire and then do mass layoffs. If both adequately were fulfilled we wouldn't see any issues and apartments could opperate at a tenable rate which benefit both complex and tenant. However because the demand in the jobs would increase since no artificial un/availability will be made the pay will grow in the more in-demand roles not fulfilled.
When the jobs demand rises and the pay rises this cycle will start again. It is why businesses should try to retain talent so this process doesn't repeat and cause an economic collapse due to the rising cost of rent and living. Being tenable is important.
Just to put some context on this...there is a natural vacancy rate, which is defined as the vacancy rate at which owners and renters have roughly equal bargaining power, leading to roughly inflation-pegged rent growth. There are small variations from market to market, and different methodologies for measuring this rate, but economists have consistently estimated this natural vacancy rate to be around 8-10%.
The vacancy rate for the full US is about 6%. Things are going in the right direction at least. But for some US cities, like Seattle, Portland, and Minneapolis, we're still a long ways away from reasonable.
>there is a natural vacancy rate, which is defined as the vacancy rate at which owners and renters have roughly equal bargaining power, leading to roughly inflation-pegged rent growth.
That's not natural. That's just holding landlord profits constant.
It is natural, the profits being held are just an (eventual) consequence of it. It reflects a minimum of total rent (econ definition, not financial definition) for both parties, which is an ideal state that is sought for efficiency.
This is why tent cities are springing up. Eventually, housing prices exceed the ability of people to pay, and demand drops. When demand drops, the only option is to either attempt to sell at a loss or lower the rent and accept the loss. Either way, the folks who bought at the top lose.
For home buyers who are not looking to flip, this isn't as much of an issue. You have to live somewhere. For renters, they'll likely need to move to see the lower rate, since if you're already paying a large amount successfully the landlord isn't likely to lower _your_ rent.
If you talk to people that work with the homeless, rent doesn't seem to be a driving factor. Rent of any amount would be too much for folks in tents because they are dealing with larger issues -- often substance abuse and mental illness.
That said, there are certainly people who live with family or take on roommates that otherwise would prefer to live independently due to high rents. So it is an issue. But rents declining a bit, or even a lot, wouldn't put a dent in homelessness.
My understanding from following a few economists on this topic is that rent is a major factor. Here's a Vox article talking about the correlation between rent and homelessness
I read the article and skimmed through the underlying paper; the authors of the latter are careful to note that they cannot establish a causal relationship.
Interviews of homeless people, at least in some West Coast cities, indicate that drug addiction is perhaps the single biggest contributor to homelessness.
If you're not convinced, I can also point you to a more recent piece by Matthew Yglesias that I found compelling that drew out the relationship between housing/rent prices and homelessness.
Believe me, I'm in favor of building much, much more housing than we are now, and of a more diverse kind. But by focusing on the price of housing (whether for rent or purchase), I think the conversation gets wrongly shifted to how to directly address the problem of some people not having enough money to pay their rent or afford a down payment; and we inevitably descend into ineffective policies like rent control or affordable housing mandates on new construction.
The supply of housing needs to drastically increase in housing-constrained places that suffer from homelessness. That means fewer zoning regulations, fewer environmental regulations, stronger rights of property owners to develop and sell or rent their property for what the market will bear, allowing "poorer" housing (like the boarding houses that Yglesias's article discusses), and so on and so forth. But you also need to convince the public that the people they see strung up on the street can be good neighbors; otherwise none of that policy change would happen. So we must also address drug addiction.
I don't know for the US, but i was a homeless student in Paris for a year, lived at my school and crashing at a new friend appartment every night or so. I know homeless student who owned cars and slept in them (the school provided showers, so that was nice). Only 1/4th of the parisian homeless are living in tents or under bridges. And for the 3/4th, rent is definitely the main factor (i mean, if the cost of a 9m² was 250€ instead of 350€ over the 3.5 years i was there, i wouldn't have been homeless at all).
IMO the bigger problem in Paris is the requirements (such as someone with sufficient revenues to guarantee you'll pay your rent/pay it for you). With regards to price, there are options - it might be crap sharing an appartement in a crappy suburb, but it exists and there are tradeoffs that can be made (nicer but farther away, crappier but closer, shared to bring costs down, etc.). Also there is student housing which is quite affordable but the system is ridiculously bad. However on both points there are improvements - there's a state guarantee program for students, and the system for requesting student housing is improving, even if there still isn't enough in Paris itself.
People shooting up drugs in tents on the sidewalk aren't in that situation because the rent is 10% higher than what they can afford. That is a whole different problem.
I agree with you but the political/legal hurdles to doing this legally are substantial (it's basically impossible, or at least relatively uncontrollable). How might you do this without a legal breakthrough?
I honestly think this is no longer correct. Construction costs exceed the future value of the rental income stream for multifamily developments in most markets. Apparently the only projects that pencil out now are massive developments, which are hard to build in places where people work as they are already somewhat dense and don't have many empty fields. The cost of materials are going back to normal (with some exceptions) but the labor costs are increasing due to a shortage of workers. Construction costs could be slightly lowered by reducing the required quality of construction, but not by much.
Land is the elephant in the room. I would be very surprised if building MDUs costs more than the equivalent number of single family detached houses. But in the majority of urban lots it is illegal to building anything but a single family detached house.
Yeah. No zoning or building codes or very weak enforcement.
I walked through Asuncion, Paraguay. People just build shacks and steal power from the lines. It's not the safest or most sanitary but it does the trick.
Almost everywhere this discussion takes place, for years now, seem to agree zoning is the cause and solution. But I've yet to see a single city or county do anything about it. Just repeating this line will not do anything, and clearly voting wasn't able to solve it. So what will happen?
This is how it works in rural areas of the U.S. Rural areas have far fewer options for government subsidized housing than in or around cities, but lax or absent habitability enforcement means there's a broader spectrum of options available before you're forced to sleep rough. You'll also see people building make-shift electrical and plumbing hookups, albeit buried so less visible than the iconic aerials in, for example, Latin American barrios. This is part of the reason sleeping rough is relatively uncommon in rural areas. OTOH, this is also how you get the sad but true stereotype of rural people living in roach and rat infested trailers, sometimes barely standing or already caving in. (Hollywood depictions of rural poverty tend to be more charitable if condescending--what they depict as squalor is usually just old, not unsafe or unhealthy, which I guess is similar to most depictions of barrios, now that I think about it.) But those situations aren't the majority.
Many locales don't require building permits for mobile structures (like cars and trailers).
I've wondered if someone could buy some parking lots and just park nice mobile homes on them and rent them out. It'd be sneaky way of creating housing.
I was curious about this before, assuming that it must be a far cheaper way to live. Turned out that after lot rental fees and the fact that mobile homes depreciate in value rather than appreciate, the economics just don't seem to work out unless your largest requirement is to be in a physically separate building than your neighbors vs being in an apartment.
Apartment and home owners also collude to exclude renters with bad credit and criminal histories, artificially creating a captive market for those people to rent on the constrained supply of trailer lots. Without such pressures I doubt their rents could be so high.
Seattle was into organizing a parking lot for derelict RVs to park in. With services, the costs came to about $8k per spot...per month. Not cheap, competitive with a tiny house in a tiny house village.
Taking that a step further, I've been interested recently in the feasibility of moving entire structures/homes to new locations. There's plenty of houses in rural America that are withering away. If there was a way to economically move homes to land in urban areas, it could help to solve the problem. I'm assuming the unit economics and feasibility simply don't work out, or else my million dollar idea would've been taken already.
Older houses in urban areas are typically seen as a negative rather than a positive. If you could sell the land without a house at all, you could save on demolition costs when the buyers of that high value property knock down the old house and build the house they really want.
Houses really do depreciate with age, even if it is less noticeable in the USA than it is in say Japan.
Good luck building a new home to replace many older urban homes in US cities with the same quality of building materials and workmanship. Also, it is typically much cheaper, easier, and quicker to utilize existing structures by expanding or modifying the layout, especially given the high costs and lack of availability of building materials.
A lot of houses get refurbished by going down to the bones and then just redoing the insulation, exterior, interior. That works fine, but you are basically just saving on the foundation and new build permit.
New homes definitely have problems, but they are not going to have the same problems as older homes (e.g. burst pipes because they were never insulated properly).
If you've ever seen El Camino near Stanford, there are people one step ahead of you. It's technically illegal since they're supposed to move their RV's every 72 hours on the street, but as far as I can tell a bunch of them don't.
Tax overconsumption of housing: if you're alone or a couple in a 6 bedroom house, you pay. Doubly so in areas with shortages. Doubly so for people in areas where there are jobs and the people are not employed.
Right now, people overconsume because they own the underlying property. If they had to pay cash rent for the same property, they would move. And if they didn't then various taxes would be due on that income. Instead they freeride and externalise the cost of the consumption.
Another alternative is a mass, semi local infrastructure program. One of the reason prices and rents are so high in some places is because there are a very limited number of places you can live and access the city centre within 1h. So we should build a tonne of light rail lines around these cities linking empty areas to them. This is how cities are meant to grow, but it requires government involvement beyond the US political model (investments that take more than 1 election cycle to pay off, reductions in property prices, municipal and rural (and state and federal) governments working together. The same is true here in the UK with London.
> Are there any moonshot ideas that could dramatically (say 50%+) decrease the cost of rent?
Sure. The government could build and subsidize housing.
When you talk about a "moonshot" idea, the Moon landing itself was subsidized with a massive amount of government funding. But it appears that we'd rather put a man on the Moon than take a man off the streets. It's just a matter of priorities.
We already have a good number of government subsidized housing in this country and I’ve never met someone that would move there willingly. How would more help?
> At first, the housing was integrated and many residents held jobs. This changed in the years after World War II, when the nearby factories that provided the neighborhood's economic base closed and thousands were laid off. At the same time, the cash-strapped city began withdrawing crucial services like police patrols, transit services, and routine building maintenance.
> Lawns were paved over to save on maintenance, failed lights were left for months, and apartments damaged by fire were simply boarded up instead of rehabilitated and reoccupied. Later phases of public housing development (such as the Green Homes, the newest of the Cabrini–Green buildings) were built on extremely tight budgets and suffered from maintenance problems due to the low quality of construction.
> The idea of sequestering people in government housing projects far away from jobs and food has not turned out such a good idea.
Good thing I wasn't suggesting that.
There's a kind of self-defeating argument I see in some of the comments: since the minimal amount we've invested in public housing has resulted in some crappy housing, it's not worth investing more money in public housing.
That's an all too convenient way to avoid attempting any improvements. Can anyone sincerely and convincingly argue, "We've already tried our best, already made the maximum investment"?
If you want to block a nearby condo from being built, you have to go to the equivalent of Washington DC and beg your congressman for help. As you might imagine, they don't give a shit, so nothing gets blocked. End result is that you can work downtown as a janitor part time and afford to live in a nice apartment in the suburb 20 minutes away by train.
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[ 3.1 ms ] story [ 197 ms ] threadApartment Rent Growth Set to Keep Slowing This Year
Not decrease—growth expected to slow.
Not quite the same vibe as "Apartment vacancies are piling up".
> The biggest wave of new rental buildings in nearly four decades is expected to cut the pace of rent growth across the country.
>Apartment vacancies are piling up. The biggest wave of new rental buildings in nearly four decades is expected to cut the pace of rent growth across the country.
> Now, many of those same places that shot up in price are seeing slides in demand and rents are going down. Between April and October of 2022, rents fell 3% in Las Vegas, 2% in Phoenix and 1% in Tampa, according to Apartment List. All three of those cities saw rents rise more than 30% during the preceding two years.
> nearly half a million new apartment units—the most of any year since 1986—are expected to complete construction by the end of 2023. That will come after more than 400,000 units were completed during 2022...The coming increase in new apartments is most likely to affect rents at higher-end buildings, because there might not be enough people who make enough money to rent them, according to CoStar.
> many housing economists don’t think job and wage growth will be strong enough to sustain much in the way of rent increases [in 2022]
tl;dr Prices are going down in many of the hottest markets in the country. Vacancies are starting to happen and are expected to increase, particularly in higher-end apartments going into 2023.
Now I also know a number of people that got burned very badly by Covid tenants that stopped paying and it took 16 months to evict them.
Some states passed their own laws but most did not last over a year, especially in southern states where renter protection tends to be weak.
Where would it take 16 months to evict a tenant for non-payment in the US?
http://hrcsf.org/rights-relief-during-covid19/
http://ebclc.org/wp-content/uploads/2020/07/2020.07.02-Berke...
That's two reasons why people are having trouble paying rent, and it sounds like those folks you know are responsible for one of them.
> "Apartment vacancies are piling up as a wave of new rental buildings are built, cutting the pace of rent growth across the country"
(I agree that some improvement is desirable.)
I think this would have had a harder time making the front page with the title the site guidelines suggest should have been used.
> “In 2021 and into early 2022 you could raise rents significantly without doing a lot to the property itself,” said Karlin Conklin, principal of apartment landlord Investors Management Group, which owns buildings in the Sunbelt and on the West Coast. “We don’t see that happening going forward.”
Gotta spend money to make money. Time to lift themselves up by their bootstraps.
Back in my day, landlords weren't lazy. That sounds like a problem these days.
scumbags
https://www.propublica.org/article/yieldstar-rent-increase-r...
https://twitter.com/PEWilliams_/status/1610126249938092033
Also - setting rent in a given market is a game that the same landlords play with each other, annually. Strategy is different in multi-round games.
And - back in the 1990's, I knew a few residential landlords in a mid-sized college town. They clearly said that they got together annually, and decided how much to increase their rents.
Not good, certainly, but absolutely in no way driving the current rental crisis.
Would love to learn more about this software.
I've looked at homes that have been available for Rent for over 4-6 months and they are refusing to negotiate or lower rents. They could have already been halfway through a year long lease on places and they are refusing to rent in order to get an extra few hundred a month in rent and drive up the market.
People are packing up and going elsewhere. New buildings are being built like mad all around us, and I don't know where they expect these people to come from that will pay their high prices. The smaller property management companies are dropping prices like crazy to get vacancies filled, but the large ones are holding strong with high rents. They have probably been banking absurd rents for the past two years and can afford to sit on these homes long enough now if they can keep getting high rents. But jokes on them, inventory is getting too high.
My rent went up 30% in 2021, and went up another 10% last year. They are now asking for another 5% increase this year. I make good money, but I am effectively paying 50% more money for a home thats half the size of what I used to have. I can work anywhere in the country, so I'm not playing this game and I think many others are in the same boat.
Meanwhile, I rented a much larger, nicer place for much cheaper from a local human being who values me as a customer.
> Now, many of those same places that shot up in price are seeing slides in demand and rents are going down. Between April and October of 2022, rents fell 3% in Las Vegas, 2% in Phoenix and 1% in Tampa.
I sure haven't seen that 1% drop. If that's a true figure, I'd wager its the luxury unit companies slightly lowering.
I also can't imagine how people can rate it the best place to live, given the complete lack of public transit and awful road infrastructure.
What this thread really makes me think is that I need to look into moving back to Seattle.. if Seattle is still half the price of the Bay and only a short flight away, maybe I can find a decent job without too much of a pay cut, haha.
It's not.
> maybe I can find a decent job without too much of a pay cut
You can. I have two friends who started at new jobs in Seattle in the first half of 2022. Both are making over $500k.
I'm at a bit of a disadvantage since I only work on C/C++ OS/driver stuff, so there aren't as many openings around for me.. Maybe I should pivot to something a little higher up the stack
If you have any interest in securities trading, you can definitely make top dollar with those skills.
[EDIT] I mean I guess the other possibility was that it was never true. I've been briefly a couple times and the city seemed pretty unremarkable, either way, but I wasn't there long and only saw a small part of it.
Finally, Jacksonville's time to shine.
Of course thanks to the "Florida man" law the whole state gets a fair amount of negative attention.
The lack of cold weather, and no state income tax goes a long way.
If that's your position, I wouldn't call it reasonable. Central Florida is paradise. As they say, if you can't take the heat...
That said, I'm not super heat-tolerant, and definitely prefer the cold! I also like walking a lot more than driving, so spent a lot more time walking around than the average Tampan, I guess? (Though maybe not anymore now that downtown's been revived!)
I've been wanting to move out of this state for years now, but it feels like everywhere else that's comparable in the US is just as expensive if not more.
It's a huge pain for my SO and I
I personally moved from a tier-1 major metropolitan area to a tier-3 small city, because I found that I stopped caring for the "big city amenities" that made living in the former worth it despite all the pains in the ass. I'm quite happy with my choice.
We looked at a small town in AZ (~40,000 people, iirc) that was beautiful and affordable, but unfortunately it didn't seem like she'd have many job opportunities in that area unless she's able to get a remote role or she wanted to drive to Phoenix or Flagstaff every day.
Prior to June these houses would sell in a day .. starting in October I started seeing these type of home sellers not have the same opportunity those who sold earlier in the year and they started to drop their prices after two to four weeks on the market. Once they drop their prices the house sold in a few days or more.
The nice homes (newer then 2005) with in-ground pools in this area if priced at 350k to 450k (in maryland i prefer PA though taxes are higher) will still go pretty fast.
Overall the market in this area has changed where it's not a sellers market as much as it was prior to June. But overall there really isnt much inventory of said homes (homes that you can buy that are nice enough to flip in a few years or so for a profit) and I think that's indicative of the entire housing market.
2 billion or so people were lifted from poverty the past 15 years, increasing consumption and driving global inflation. 15 years ago you were competing with less than 1/2 the number of people for, say, natural gas; and that was before Russia's gas exports were decimated by sanctions.
Many tried to warn of inflation when USGOV stimulus rained down on US citizens & small businesses. With the election looming, nobody listened.
Bottom-line... your elected leaders want to get reelected. They enact laws & policies that are inflationary because the body politic doesn't think long term, follow-on effects & is largely economically illiterate.
You get the economy you deserve, not the one you want.
Let the downvotes begin.
(Honest question).
Remote work will hurt your career (https://www.wsj.com/articles/think-working-from-home-wont-hu...)
"Productivity theater" and employees cheating (https://www.wsj.com/articles/your-boss-still-thinks-youre-fa...)
Remote work means American jobs will be outsourced to cheaper countries (https://www.wsj.com/podcasts/tech-news-briefing/tech-industr...)
It's hard to make a point with a handful of links, but if you read it regularly then the bias is pretty clear.
For example it takes months for an apartment to be re-occuppied. One month to clean and move. One month to find a new tenant. Jobs are no different. This is why businesses sometimes over hire and then do mass layoffs. If both adequately were fulfilled we wouldn't see any issues and apartments could opperate at a tenable rate which benefit both complex and tenant. However because the demand in the jobs would increase since no artificial un/availability will be made the pay will grow in the more in-demand roles not fulfilled.
When the jobs demand rises and the pay rises this cycle will start again. It is why businesses should try to retain talent so this process doesn't repeat and cause an economic collapse due to the rising cost of rent and living. Being tenable is important.
Apartments are always showing, and people have to give notice so the managers know what's coming availabile.
The vacancy rate for the full US is about 6%. Things are going in the right direction at least. But for some US cities, like Seattle, Portland, and Minneapolis, we're still a long ways away from reasonable.
That's not natural. That's just holding landlord profits constant.
For home buyers who are not looking to flip, this isn't as much of an issue. You have to live somewhere. For renters, they'll likely need to move to see the lower rate, since if you're already paying a large amount successfully the landlord isn't likely to lower _your_ rent.
That said, there are certainly people who live with family or take on roommates that otherwise would prefer to live independently due to high rents. So it is an issue. But rents declining a bit, or even a lot, wouldn't put a dent in homelessness.
https://www.vox.com/the-goods/2018/12/14/18131047/homelessne...
Interviews of homeless people, at least in some West Coast cities, indicate that drug addiction is perhaps the single biggest contributor to homelessness.
https://www.slowboring.com/p/homelessness-housing
The supply of housing needs to drastically increase in housing-constrained places that suffer from homelessness. That means fewer zoning regulations, fewer environmental regulations, stronger rights of property owners to develop and sell or rent their property for what the market will bear, allowing "poorer" housing (like the boarding houses that Yglesias's article discusses), and so on and so forth. But you also need to convince the public that the people they see strung up on the street can be good neighbors; otherwise none of that policy change would happen. So we must also address drug addiction.
https://www.youtube.com/watch?v=Bhy3zI3wvAo
Including ideas that are probably-illegal but could see mass consumer adoption before they could be stopped (like Uber)?
You mean near where people want to live or want to work? We have plenty of housing, just not in the boom towns that are growing rapidly.
I walked through Asuncion, Paraguay. People just build shacks and steal power from the lines. It's not the safest or most sanitary but it does the trick.
Many locales don't require building permits for mobile structures (like cars and trailers).
I've wondered if someone could buy some parking lots and just park nice mobile homes on them and rent them out. It'd be sneaky way of creating housing.
Houses really do depreciate with age, even if it is less noticeable in the USA than it is in say Japan.
New homes definitely have problems, but they are not going to have the same problems as older homes (e.g. burst pipes because they were never insulated properly).
I've never linked to Google Street View, but I'll try... https://goo.gl/maps/d6DvdC9gmhumQRB17
Of if you look up "860 Betty Meltzer Memorial Hwy, Palo Alto, CA" you'll see what I mean.
Right now, people overconsume because they own the underlying property. If they had to pay cash rent for the same property, they would move. And if they didn't then various taxes would be due on that income. Instead they freeride and externalise the cost of the consumption.
Another alternative is a mass, semi local infrastructure program. One of the reason prices and rents are so high in some places is because there are a very limited number of places you can live and access the city centre within 1h. So we should build a tonne of light rail lines around these cities linking empty areas to them. This is how cities are meant to grow, but it requires government involvement beyond the US political model (investments that take more than 1 election cycle to pay off, reductions in property prices, municipal and rural (and state and federal) governments working together. The same is true here in the UK with London.
Sure. The government could build and subsidize housing.
When you talk about a "moonshot" idea, the Moon landing itself was subsidized with a massive amount of government funding. But it appears that we'd rather put a man on the Moon than take a man off the streets. It's just a matter of priorities.
What is this supposed to mean? Are the buildings empty? Or is it just a comment about the company you keep?
> Lawns were paved over to save on maintenance, failed lights were left for months, and apartments damaged by fire were simply boarded up instead of rehabilitated and reoccupied. Later phases of public housing development (such as the Green Homes, the newest of the Cabrini–Green buildings) were built on extremely tight budgets and suffered from maintenance problems due to the low quality of construction.
Housing the homeless is a much tougher problem than putting some people on the moon for a few days
Good thing I wasn't suggesting that.
There's a kind of self-defeating argument I see in some of the comments: since the minimal amount we've invested in public housing has resulted in some crappy housing, it's not worth investing more money in public housing.
That's an all too convenient way to avoid attempting any improvements. Can anyone sincerely and convincingly argue, "We've already tried our best, already made the maximum investment"?
If you want to block a nearby condo from being built, you have to go to the equivalent of Washington DC and beg your congressman for help. As you might imagine, they don't give a shit, so nothing gets blocked. End result is that you can work downtown as a janitor part time and afford to live in a nice apartment in the suburb 20 minutes away by train.