Rents continue to push upwards, as landlords take advantage of the hot rental market.
Average effective rents climbed 3.6 percent during the second quarter compared to a year earlier, according to REIS Inc., a real estate research data firm. Rent growth has bloomed at a fast pace since 2012, hovering around a 4 percent annual growth since then.
Strong technology markets like San Jose, Calif.; San Francisco; and Denver are seeing some of the largest increases in rental costs. In San Jose, rents rose 7.2 percent from the second quarter of 2014 to $1,951 a month. In San Francisco, rents rose 6.8 percent to $2,316. In the country’s most expensive rental market, New York City, rents rose 1.7 percent over the prior quarter, reaching $3,294 a month.
REIS projects that 230,000 units will be completed this year — that’s nearly double above normal levels. In the second quarter, the apartment vacancy rate was just 4.2 percent.
Source: “Rents Continue Their Steep Climb,” The Wall Street Journal (July 1, 2015)