New York State, New England See Modest Rise in M-F Asking Rents
- Dec 08, 2008
Despite the careening economy, average asking rental rates throughout New York State and New England notched moderate gains in the third quarter compared with the levels recorded in the first quarter, according to a recent report.The study, conducted by third-party property management specialist Sunrise Management & Consulting, assesses rental conditions in Connecticut, Maine, Massachusetts, New York (excluding New York City), New Hampshire, Rhode Island and Vermont. The fall survey, which was conducted from September to November, does not include actual rent rates. Much of the increase in average rental rates can be attributed to the supply-and-demand situation in New York and New England. “In most of these markets, unlike some of your larger, more modern cities, there is a not a tremendous excess capacity of apartment units,” said Richard Dolins, vice president & director of research for Sunrise. “Therefore, there’s a little more pressure on the market. That pressure is going to keep rents up.” And as the financial crisis continues to impact consumers’ ability to find and qualify for credit and as more homeowners are forced to relocate to apartments, demand for multi-family units has trended upward. Of the nine New York State regions examined in the report, seven experienced increases in average rates, led by the North Country Region (Clinton, Franklin, Jefferson County, St. Lawrence and Warren), up $18 from $647 in the first quarter to $665 in the third quarter. It’s important to note, however, that for smaller rental markets, such as those in the North Country, it doesn’t take many changes in structure to move rents. The remaining New York state markets that realized first-to-third quarter upsurges are: -Central Region (Cayuga, Cortland, Madison, Onondaga, Oswego and Tompkins) from $690 to $704 -East-Central Region (Fulton, Herkimer, Montgomery, Oneida, Otsego and Schoharie) from $644 to $646 -West-Central Region (Genessee, Livingston, Monroe, Ontario, Orleans, Seneca and Wayne) from $756 to $769 -Capital Region (Albany, Rensselaer, Saratoga and Schenectady) from $884 to $900 -Southern Tier Region (Broome, Chemung, Chenango, Delaware, Schuyler, Steuben, Tioga and Yates) from $677 to $694 -Western Region (Allegany, Cattaraugus, Chautauqua, Erie, Niagara and Wyoming) from $756 to $761 Just two New York State regions–the markets with the highest average rents–experienced slight decreases from the first to third quarter. The average rent level in the Southern Region–comprising Westchester, Rockland, Nassau and Suffolk–fell from $1,749 to $1,742. Meanwhile, the average rental rate for the Hudson Valley Region, including Columbia, Dutchess, Greene, Orange, Putnam, Sullivan and Ulster, fell from $1,068 in the first quarter to $1,064 in the third quarter. Each region in Connecticut, Maine, Massachusetts, New Hampshire and Vermont notched a modest rise in average rental rates. “In most cases, since we did this report in the more active period of time for rentals, generally you’re going to see greater increases during this (evaluation) period than you would during our spring report,” which is based on data collected during the winter, Dolins said. Interestingly enough, however, Rhode Island turned around a yearlong decline with a $21 rise in average rental rates to $1,155. “When other markets were growing, Rhode Island was flat for a while,” Dolins said. “What Rhode Island is doing is just doing a little bit of catch-up.” The for-rent markets in many communities are fairly insulated from some of the economic pressures that continue to impact other commercial property types. “If you can’t get a mortgage, you’ll rent. And people who normally wouldn’t rent are renting,” Dolins said.