To save money, more and more renters are teaming up with a roommate or two in a larger unit rather than living alone in a studio or one bedroom apartment, according to a new survey of search data of one of the nation’s largest online apartment listing sites.
Based on a sample of nearly 10 million searches for 1-, 2-, and 3-bedroom apartments that took place on MyNewPlace.com between January 2008 and June 2009, the percentage of searches for 3-bedroom apartments consistently increased each quarter while searches for 1-bedroom apartments decreased. The share of searches for 2-bedroom apartments meanwhile stayed steady, suggesting that instead just of ‘doubling up,’ renters are tripling up for even greater rent savings. Two or three bedroom rentals can cost 20 to 30 percent less per person than single-bedroom units.
Top ten cities where renters have been choosing multi-bedroom units over singles over the past 18 months are: Washington, DC; Philadelphia, Atlanta; Chicago; San Jose; Denver; Los Angeles; Seattle, Las Vegas and Boston.
The trend to double or triple up has been contribting to rising vacancy rattes. The U.S. apartment vacancy rate rose to 7.8 percent in the third quarter, its highest since 1986, according to the report released on Tuesday. Vacancies have been rising since the third quarter of 2007, according to a recent report from Reis. The U.S. apartment market has been reeling for more than a year as its main demand driver, job growth, disappeared in the U.S. recession.
.Reis expects the U.S. apartment vacancy rate to pass the 8 percent mark by perhaps next quarter but certainly by next year, making it the highest vacancy rate since Reis began tracking the market in 1980.
In the third quarter, the U.S. apartment asking rental rate fell 0.5 percent to $1,035 per month, the fourth consecutive declining quarter. Factoring in months of free rent and other perks landlords have been using to lure or keep tenants, effective rent fell 0.3 percent to $972, also the fourth consecutive quarter of declining rent.