Rental Market Forecast for the remainder of 2009
Our short term forecast for 2009 (2nd and 3rd quarter) is for a continued renter’s market.
During the apartment to condominium conversion craze we saw a tightening of the rental property supply. Investors had created an artificial demand for these and other properties. As the craze cooled, investors placed these properties on the rental market while waiting for the market to recover. This increase in the rental supply put downward pressure on rental rates.
Another benefit from the increased supply of rental properties and the competition between private owners and apartment communities for renters is move in specials. Apartment complexes are continuing to offer move in special incentives to attract potential renters. Move in specials can consist of free rent (up to 3 months at some apartments) up front or prorated over the term of the lease, reduced rent and/or low to no security deposits. Many apartment complexes have also eased their screening requirements making it easier for renters with credit issues to qualify.
Our long term rental market forecast is for a landlord’s market. The increased supply of rental properties created by investors will continue to decrease as these properties are absorbed by the natural demand through foreclosures, short sales and correctly priced properties. We have already noticed reduced availability and increased rental rates in certain high demand communities.
Fortunately for renters, much of the new demand for real estate is from a second wave of investors who will keep most of these rental units on the market. Depicted as “vultures” by many local newspapers, these, what we call smart investors, are more suited to be landlords because of their initial investment costs.
Submitted by Rent 1 Sale 1 Realty – West Palm Beach (Corporate)
“Remember, opinions are like hats. Everyone has one.”
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Comments
We'll be posting shortly. The market was very defined in 2009. However, we're starting to see signs of changes in some areas and a continuation of the same in others. We're also seeing changes in areas with regards to property types such as condos, townhomes and homes.
What's your forecast for 2010. I'm thinking about buying an investment property.
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