If there is one thing that is booming in today's industry, it's the rental market. According to the Green Street Advisors over 1.5 million rental households are expected to crop up in 2011. Those are record breaking numbers for the industry.
At the end of the 3rd quarter approximately 5.6% of apartments were vacant. These are the lowest vancany levels since 2006. Rent has increased to $1,004 per month in the 3rd quarter. Over last year, that is a 2.3% gain.
Now these numbers are not just in Colorado, but also occuring in the hardest hit cities like Orlando, Detroit and Pheonix. Out of the 82 major markets analyzed, the only market that saw rent decline in comparison to last year was Las Vegas.
What is causing rent to rise? The lack of space for rental households to go. Lower vacancy rates mean owners can charge more for their space. To meet demand, builders added 8,200 new apartments in the 3rd quarter, which is actually the lowest amount of units added since Reis Inc. began tracking data in 1999.
Meanwhile, investors are seeing soaring profits from apartment buildings they may have purchased just a few years ago. In fact, due to rising rents and demand, some real estate companies are expected to post their highest gains since 2006 in property net income for this year and next.
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