Please wait as we prepare your PDF file ....

Mission Chronicle Blog

Search Blog

our goal is to help you stay informed by providing timely and interesting articles.

Rents are rising in the suburbs

05/26/2017

Download PDF

Home prices have been consistently rising with Q1 2017 home prices surging 6.9 percent quarter-over-quarter and 5.9 percent year-over-year.

Some aspiring buyers look to renting in the ‘burbs as a cheaper option, but Zillow’s latest rental study shows that rents in suburban and urban areas are facing affordability issues of their own.

The median monthly cost of a suburban rental is up 2.5 percent year-over-year, which is 0.2 percentage points above year-over-year urban rental cost growth — something that hasn’t happened in four years.

Zillow says the trend is more pronounced in booming housing markets such as Nashville, Tennessee; San Francisco; and Seattle; where residents are moving to the outskirts of the city to escape high urban rents.

For example, over the past decade, the share of income needed for the median rent payment in the San Francisco metro has increased from 34 percent to 44 percent. In the same time period, the share has increased from 26 percent to 32 percent in the Seattle metro.

The study revealed that the foreclosure crisis pushed homeowners to rent the same kind of single-family homes they once owned in suburban areas. From 2005 until now, the percentage of single-family rentals rose from 12.7 percent to 19.2 percent.

Rising affordability issues for would-be buyers impacts renters as well — decrease in homeownership and increase in rental demands results in higher monthly rent for two reasons:

Monthly rent is generally less expensive in suburban communities (even as rents there grow more quickly), which means suburbs are currently an increasingly attractive option for budget-conscious renters. Suburbs also have a higher concentration of single-family homes, which are increasingly popular for renters who are seeking additional space and other advantages, but are unable or unwilling to purchase a single-family home.

On the “bright” side, Zillow Chief Economist Dr. Svenja Gudell says suburban apartment complexes will experience a major upgrade to meet the needs of urban renters who are migrating to the outskirts of the city.

“Because walkable urban centers close to amenities are typically a big draw for renters, you’d expect rents to rise faster in the city than in the suburbs — which is exactly what we’ve been seeing until very recently,” said Gudell. “But a handful of factors are helping turn the tables and beginning to push suburban rents up at a higher clip.

“These include deteriorating rental affordability in expensive urban cores; new apartments, albeit high-end ones, opening downtown compared to relatively few in outlying areas; and preferences among some renters toward the space offered by single-family homes in the suburbs,” she added. “Rents themselves are still lower in the suburbs, but if demand keeps growing for suburban rentals and supply continues to lag, that will also start to change.

“As more formerly urban renters move to the suburbs in coming years, we’ll likely start seeing more apartment buildings and walkable amenities popping up in those communities.”

Email Marian McPherson.

Source: click here

Read More

INSPIRED, INTELLIGENT, INSIGHTFULL

STAY INFORMED WITH TIMELY AND INTERESTING ARTICLES FROM OUR BLOG, MISSION CHRONICLE. OUR ASPIRATION IS TO PROVIDE REALTORS AND OTHER REAL ESTATE INDUSTRY PROFESSIONALS WITH EXCEPTIONAL RESOURCES AND SHARE OUR KNOWLEDGE TO PROPEL YOU TO YOUR GOALS.

  • ClosingLock aims to lock down wire fraud

    Have suggestions for products that you’d like to see reviewed by our real estate technology ex...

  • The top 3 priorities buyers place alongside location

    The past year has brought unparalleled attention to luxury properties in suburban and vacation marke...

  • CoreLogic launches consumer search with OneHome

    Have suggestions for products that you’d like to see reviewed by our real estate technology ex...

  • What you need to know about 2020’s accelerated luxury market

    It’s safe to say that this year has not been the one we expected. In March, it was anybody’s gue...

  • Up your social media look with Feed Appeal

    Have suggestions for products that you’d like to see reviewed by our real estate technology ex...

  • From video to VR: why VR home tours are a must-have

    This has been a year of challenges and transformation for all industries, and the luxury real estate...

  • ReferMe IQ uses old business to earn you new business

    Have suggestions for products that you’d like to see reviewed by our real estate technology ex...

  • How urban buyers are creating space and redefining how they live

    We’ve all experienced the shift this year: luxury buyers opting for spacious homes in the suburbs ...

  • Realable puts a unique spin on virtual tours

    Have suggestions for products that you’d like to see reviewed by our real estate technology ex...

  • Navigating the long-term decentralizing of work (part 2 of 2)

    As interest in urban condos fluctuates and suburban mansions see multiple offers, the shift to decen...

November 2020
Mon Tue Wed Thu Fri Sat Sun
 1
2345678
9101112131415
16171819202122
23242526272829
30  

  • Polls

    What information you are looking for?

    View Results

    Loading ... Loading ...
  • Last month Results

    How Is My Site?

    • Good (100%, 3 Votes)
    • Excellent (0%, 0 Votes)
    • Bad (0%, 0 Votes)
    • Can Be Improved (0%, 0 Votes)
    • No Comments (0%, 0 Votes)

    Total Voters: 3

    Vote

    Loading ... Loading ...