Not so long ago desperate landlords had to offer incentives to get tenants and tenants could find a variety of amenities and extras within their budget. How life has changed!
Two new surveys by national rental sites paint a very different picture of rental living as new construction has failed to keep up demand in the hottest markets and soaring rents leave tenants with few choices.
A survey of renters by San Francisco-based Lovely found that of the top 30 most expensive cities in America: Palo Alto has the highest citywide median rent ($3,645) in the U.S., followed by San Francisco ($3,488). California hosts 21 of the top cities on the list, which also includes cities from New York, New Jersey, Massachusetts and Florida.
San Francisco Bay Area: Renters are flocking to San Francisco Bay Area, and the rental market can’t keep up — in the last quarter alone, rent prices in the city have increased by more than six percent prompting renters to seek rentals in the surrounding areas such as Oakland, which experienced a 20 percent increase in median rent in the past year.
New York City: For the first time in 2014, New York’s citywide median rent fell below $3,000. Although Tribeca tops the charts as the most expensive neighborhood with a median rent of $5,000, Battery Park City is close on its heels, nearing $4,900 after seeing a 28 percent rent increase compared to last year.
Los Angeles: Despite a more than 10 percent rise in median rent since the third quarter of 2013, Los Angeles renters could still secure a two-bedroom apartment for $2,100 — which was equal to the median rental rate of a San Francisco studio during the third quarter of 2014.
Washington D.C.: Renters in D.C. can save 29 percent by living with one roommate in a two bedroom unit, compared to a one-bedroom alone, or 18 percent by living with one roommate in a two-bedroom unit compared to living alone in a studio apartment.
Chicago: Rent prices in Chicago have been on the rise for the past three years. The city saw a tremendous increase of over 12 percent compared to the previous year. Neighborhoods with the largest year-over-year rent increases
Apartments.com reports that its latest survey found that concessions and incentives are nonexistent in some hot rental markets. Half of renters need to rent for various financial reasons, while more than one-third of renters choose to rent because they enjoy maintenance-free living. Only 13 percent of renters surveyed said the main reason they rent is because they need to be mobile.
While financial necessity is the main reason 50 percent of survey respondents said they are currently renting, 56 percent of renters who plan to move within the next year said it is for a change of scenery, and 13 percent said they need to relocate for a new job. These reasons for moving could indicate an improving U.S. economy. Also, 42 percent of current renters said they don’t plan to buy a house or condo in the future. Of that 42 percent, nearly half gave reasons unrelated to finances as their main motivation: 31 percent said there’s too much maintenance involved in owning a house (e.g. repairs, lawn, snow shoveling, etc.), while 18 percent enjoy the simplicity of renting.
The top five responses for choosing an apartment or rental home:
- Affordability/low monthly rent: 36 percent
- Living in a safe area with a low crime rate: 23 percent
- Living near their job or school: 12 percent
- Must allow pets: 8 percent
- Amenities (e.g. Air conditioning or a washer/dryer in unit): 8 percent