Home sellers aren’t the only ones dropping their prices right now:
landlords are also slashing rents, even now during the peak summer
leasing season.
Second quarter figures from real-estate research firm Reis make
clear that it’s a renters’ market. Asking rents, which are used as a
starting point in rent negotiations, dropped by 0.6% in the second
quarter, after falling by 0.6% in the first quarter and 0.2% in the
fourth quarter of 2008. For a sign of how unusual that’s been: Over the
rest of the decade, there’s only been one other quarter when asking
rents declined.
In New York City, apartment owners slashed prices to keep apartments
occupied and were able to halt rising vacancies. The vacancy rate
actually fell by 0.5 percentage points to 2.9%, the tightest market in
the country. But to get there, landlords dropped effective rents, which
take into account concessions such as one-month free rent, by 1.7%.
Renters who don’t want to move can still take advantage of these lower rents, as our colleague Mary Pilon noted in her post earlier this year. A few tips:
- Offer to extend a lease in exchange for a rental
discount. Most landlords would rather keep a tenant in place and offer
a discount than to have to find a new tenant. - Do some homework. Find out what other units are renting for in the same building, or in nearby buildings.
The biggest second quarter rent drops came in the San Francisco Bay
Area, Seattle, New York and Southern California. Of course, there are
some markets where landlords have been able to boost rents. Rents went
up in 11 of the 79 U.S. markets tracked by Reis, including Birmingham,
Ala.; Chattanooga, Tenn.; Louisville, Ky.; and Washington, D.C.
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