Residential Rents Strengthening Overall, But Sun Belt Sees Dip

Residential rents are strengthening in much of the country, according to a new report by Investment Instruments Corp. that tracked changes in median apartment rents in 12 major metro areas between the first quarter of 2007 and the first quarter of 2008. But the changes have been quite uneven, and substantial losses have been seen in the Sun Belt, where (except for Los Angeles) rents have stagnated or softened over the past 12 months. Investment Instruments CEO & co-founder Allison Atisknoudas told CPN that the report is based on asking rents, not actual rents, and that one of its strengths is that “We focus on people who have small portfolios.” Currently, she said, the rental market is being buoyed by the widespread perception that the housing market has further to fall, which is keeping many potential homebuyers, especially first-timers, on the sidelines for now. The metro areas showing the greatest growth in residential rents are unsurprising: San Francisco (up 14.6 percent, to a median of $1,850 for a two-bedroom apartment), Seattle (up 10.3 percent, to $1,250), New York (up 9.0 percent, to $1,800), Washington (up 4.9 percent, to $1,900), and Los Angeles (up 3.8 percent, to $1.795). Boston just hit the 12-city average, at a 3.3 percent increase; Chicago lagged a bit at 2.0 percent; and Las Vegas more or less broke even (not adjusting for inflation) at minus-0.2 percent. Residential rent fluctuations were the most negative over the past 12 months in Phoenix (down 9.3 percent, to a median of $900 for a two-bedroom apartment), Austin (down 3.0 percent, to $875), Miami (also down 3.0 percent, to $1,440), and Atlanta (down 2.1 percent, to $954). Investment Instruments Corp. is the provider of the Rentomatic and Rentometer property management tools. The full report is available at IIC’s Web site