Rents Fell Last Year, But In Many Cities Still 'Too Damn High'
Rents fell across the United States last year, but landlords got choosier.
Overall average rent in the U.S. dropped to $820 in the fourth quarter of 2011 from $831 in the same time period in 2010, according to new data released Thursday from credit reporting company TransUnion. However, the average security deposit increased $284 from $269.
Ongoing high unemployment--In January the jobless rate was 8.3 percent--kept monthly prices down, but the steady demand of tenants meant security deposits went up slightly, said Mike Mauseth, president of TransUnion's Rental Screening Solutions.
"Landlords can afford to be more selective in offering premium terms," said Mauseth.
For those wondering why their rent, in the words of former New York gubernatorial candidate Jimmy McMillan, is still "Too Damn High," data showed that major cities, including New York, San Francisco and Denver actually had substantial increases in the past year, underscoring how lopsided the economic recovery has been across the nation.
TransUnion collected the data from more than 200,000 rental applications from a diverse group of landlords--ranging from multifamily building landlords to ones that own buildings with less than 50 units--who use the company's rental screening services.
Other measures indicate that higher quality apartments in the most desirable locations had rent hikes of 5 to 10 percent, while lower-end properties did not raise prices, according to fourth quarter data from REIS, a company that collects national real estate data from properties in the top 79 markets. Its data, which represents only investment-grade properties with more amenities, showed an average rent increase of 2 percent last year across the United States to $1,064 per month.
In New York City the average cost of rent was almost $3,000 at the end of 2011--a 3 percent increase from the fourth quarter of 2010, according to REIS. San Francisco and San Jose -- two cities in northern California that are experiencing a tech boom, which can often lead to a boost in real estate prices -- both had rent increases of more than 4.5 percent in 2011. TransUnion reported that rent in Denver increased more than 10 percent from 2010 to 2011, with landlords charging $857 per month on average.
However, areas hit hard by the housing crisis and unemployment have experienced far less change in rental prices. In Las Vegas, the average rent was $809 at the end of 2011, only 0.6 percent higher than 2010. Orlando, Fla., where the average rent is $875, also had less than a 1 percent change in rental prices from 2010 to 2011, according to REIS.
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