For those of you not benefiting from rent control, expect to see your rents go up, if you haven't already. As the housing market begins a general cooling off, more people who find themselves unable to buy are now renting, driving up demand, lowering vacancy and causing landlords around the country to do a gleeful jig as they raise rents. Los Angeles isn't alone in this department, as rents on both coasts and in-between are going up. The Wall Street Journal reports that the cooling housing market, a loss of apartment units due to condo conversions, and job growth have factored in to the current rise.
Generally, rents in East and West Coast cities are expected to rise the fastest. Archstone-Smith, which owns apartment buildings in 41 cities, says it is increasing rents 8% to 10% in New York City and Southern California.The good news? Well, there really isn't any. Although a report commissioned by the Journal found that in Los Angeles, the cost of renting is half what it would cost to actually own a home, based on the median home price and a 15 percent downpayment and 30 year mortgage.
It's partly a supply-and-demand issue. Years of soaring house prices (and recent increases in mortgage rates) have simply priced many people out of the home-buying market. Indeed, the portion of U.S. households owning their own home slipped to 68.5% in the first quarter from 69.1% a year earlier, according to the Census Bureau.
· A Cooling Housing Market Adds To Rental Demand in Many Cities [WSJ.com]