The great recession in 2010 shook off many people in the real estate market. Homeowners practically lost their property while renters bled out due to increased rent rates. In 2017, the apartment market is raving with huge demands from buyers and renters alike. But high rental prices have recently stabilized since the Great Recession in 2010.
The west coast rent growth rose to 150 basis points beyond the long-term average in 2010-2016 market recovery periods. Apartment renters saw a huge relief in reduced rates from late last year.2017 began with promising further declines in markets where rents were at an all time high.
Slow rent growth in 2017 shall benefit renters as opposed to landlords. During the last six years, in the west coast area, the standard annual rent hike averaged $516. It’s expected to decrease to about $345 in 2017, showing annual savings of about $172.
Ranking the Markets
Out of the 54 U.S. metro cities analyzed, those on the west coast showed yearly savings vary from $8 to $2,650, with average declines of $360 from the 2010-2016 average price. Prime markets like the San Francisco Bay Area, are expected to produce negative rent growth this year. Stable smaller markets are taking up the market rates drop, according to Axiometrics high-rise data.
Trends by Market
Oakland, San Jose, and San Francisco lead the coastal area for the majority savings in 2017. San Jose apartment renters may pay an estimated lower cost of $2,647 a year compared to the last five years average rent. These markets witnessed a massive rent increase in the past, producing absurd unsustainable rates over the long term.
The positive change in flexible values in 2017, against to the long-term past rates reveal renters not ready to pay high rates in these markets. The impact of new apartment units, combined with emerging homeowners and a growing job market will eventually soften the escalating rent rates throughout 2017.
In this case, fluctuating degrees of elasticity reveal how renters respond to trends in rent in the west coast region. Housing is unpredictable, which means price hikes or drops do not entirely affect the supply demand chain in the property market.
Rent increase or decrease depends on the outlook of residents in every market. Where renters are not mindful of escalating property rates, the increase poses a minor factor in their property shopping decisions.