The Rent Cafe 2018 Year End Rent Report shows rents hold strong at year end.
What most caught my eye, however, was an interactive graphic that lets you hover over a phrase to see how often perspective renters included that word or phrase in a search.
Search Results
- Cheap apartments: 25.14%
- Studios: 23.88%
- One-, two- and three-bedroom apartments follow in that order, with 10.48%, 9.46% and 7.5% of all rental-related searches, respectively.
- Luxury apartments also saw significant interest among renters this year, accounting for 7% of searches.
- Those wanting a pool or gym turned up in 0.33% and 0.06% respectively
Cheap Is On My Mind
Studio is another sign that cheap is on renter’s minds.
Admittedly there is some overlap between cheap and studios while there isn’t between One-, two- and three-bedroom apartments. However, there is likely some overlap between studio and one-bedroom.
GPS Searches
The infographic only listed amenities but here’s another interesting factoid: Online activity has migrated to GPS-enabled mobile devices. One third of the keywords people searched for in 2018 included the words ‘near me.’
Cheap – Near Me
This is what people want: Cheap, near them.
Everything else other than number of bedrooms doesn’t factor in until final comparisons.
National Average Rent
Other Take-Aways
- The national average apartment rent ends the year with a strong 3.1% y-o-y increase, having reached $1,419, $42 above what renters were paying this time last year, according to Yardi Matrix.
- As of the end of the year and throughout 2018, rents have seen the most fluctuation in small cities, with double-digit percentage increases in Odessa, TX, Midland, TX, and Reno, NV.
- Queens, NY has been the only large market with stagnating rents, and only two small cities, Baton Rouge, LA and College Station, TX have seen significant decreases.
Cheap is In
In case you haven’t figured it out, cheap is in.
Don’t count on those looking for “cheap” to be looking to buy homes until this economic bubble collapses.
Mike “Mish” Shedlock
So how much of that is supply-demand and how much is due to rising interest rates and tightened credit for landlords post-2008? If they have to pay more for a mortgage on the rental property maybe they just pass that increase along?
My guess is a little from column A and a little from column B. Denver, Austin and other western cities are booming with apartment and condo construction right now. But with rising interest rates and (slightly) tougher borrowing standards I have to think rents are going to be higher than back in the bubble days before 2008. Housing takes a while to adjust to the new normal and really from what I see in my own home’s perceived value it is only now up to the value it was prior to the crash after 10 years.
Average apartment sizes over that same period have been shrinking too.
(Again, can’t stand a price chart over time that doesn’t start at zero on the vertical axis and isn’t indexed to either wages or inflation. I made half of much income in 2007 than I do now, but my apartment rent only went up 30%. Seems like a great deal! {sarcasm}>
Tell me exactly how this is NOT symptomatic of perniciously falling living standards, ultimately courtesy of central banking.
I’d love to hear how living standards are falling.
Look at energy consumption for the median worker since 1971. Likely the best balance between universal relevance and difficulty-to-game-by-the powers-that-be left, now that debasement driven redistribution and statistical mirages are all that’s left of official “economic” statistics.
This comment is indicative of the modern trend, to blame everything on central banks, based on some tenuous or imagined connection. You could type the same sentence with whatever boogyman is your favorite. “…falling living standards, ultimately courtesy of creeping socialism”, or “…courtesy of Trump”, or “courtesy of the sad state of public education”.
My only expense as a small time landlord that is increasing a lot is property taxes — in Chicago. Ive had to help look for apartments for low-income friends that cant live with mom anymore. And yeah, “studio” and “cheap” comes to mind a lot.
This generation doesn’t believe the size of where they live matters. They are more about experiences. I have nieces and nephews that use uber rather than learn how to drive or want a car. Their reality is through their smartphone. They believe experiences matter more than working to acquire stuff. This is the biggest trend that will take hold once the next downturn begins. The next generation is even avoiding having kids because it crimps their lifestyle and they saw what it did to their parents.
You’ll know it’s serious when heated and no leaking roof begin to appear.
And no rats or cockroaches.
Has cheap ever been “out”? Who would look for an expensive rental?
Look at transaction prices for car, and especially truck and SUV, leases…….. Or mobile phones. Or vacation destinations…. Or coffee… Cheap ain’t the prime motivator, unless supply is artificially, at gunpoint, restricted to the point were working ones rear off simply to avoid outright homelessness, is the only alternative.