What a difference a year makes. Just a year ago, rent prices were decreasing by approximately four percent nationwide. Renters were finally reaping the rewards of the old law of supply and demand: Too much supply plus no demand equals low rent.
Get ready for a shift on the economic curve. While geographic differences exist, 2011 will likely see the largest rent increases in recent history. In fact, rents in many cities are headed back to pre-bust levels.
Crain’s New York Business is reporting that last month’s Manhattan apartment rental rates increased by a whooping 8% over last year’s rents. Considering that the average rent for a studio apartment in a doorman building in Manhattan is $2472, this increase means nearly $200 out of a renter’s pocket each month. Ouch.
Lest you think that those well-heeled New Yorkers are alone, their counterparts on the left coast are feeling the pinch as well. In fact, an industry expert expects that 2011 San Francisco will reach 2008 levels. That could be increases as much as 15-20%.
So, what can you do about it? Your best bet is probably to stay put. Landlords are more likely not to increase rents for existing good tenants. And, if they do, not only is it probably a smaller increase than market, but you probably have some room to negotiate. After all, even if supply is down and rents are going up, most landlords would rather know that they have a unit rented than risk a very pricey vacancy.
