Rents are Falling Almost Everywhere…Except DC

by Will Smith

Allegro on 14 St. is offering two months free rent

Vacancy rates for apartments have reached their highest level in 30 years, according to a report issued this morning by real estate research firm Reis, Inc. For the final quarter of 2009, the national vacancy rate stood at 8 percent. Compare that to 5.5 percent in the third quarter of 2006, when vacancy rates bottomed. That’s a 45 percent spike in just over three years.

While the record vacancy rate is bad for landlords and a dismal commentary on the state of the economy, the silver lining is the opportunity it spells for renters. Landlords are lowering rents and offering incentives to entice prospective tenants. See our article DC Apartments Roll Out the Move-in Incentives for examples of the deals currently being offered in the DC area.

Speaking of DC, it was actually one of only six markets that saw rents rise or stay flat in 2009. Still, the market is softer here than it has been for years, so local renters should feel emboldened to push for perks and deals.

It may seem counter-intuitive that the rental market is hurting at the same time the housing market is still so weak. After all, if fewer people are buying homes, wouldn’t that mean more people are renting? The culprit is joblessness; in an environment such as this, all people — buyers and renters — try to save on housing costs.

“Household formation rates slow down during recessions,” Reis’s economist Ryan Severino told CNN. “[Renters] may move in with their families or rent larger apartments and partner up with friends. They partner with others much more then they do during more prosperous times.”

See other articles related to: renting in dc, reis, editors choice, dc area market trends

This article originally published at http://dc.urbanturf.com/articles/blog/rents_are_falling_almost_everywhere...except_dc/1659

1 Comment

  1. CondoAuthority.com said at 11:28 am on Friday January 8, 2010:

    Lack of household formation is definitely a major culprit.  Maybe DC fares better in this area because people relocating are less likely to share an apartment because they might not know anyone here that they are willing to live with.  The for-sale market also picked in 2009 and so many condo buildings were added to the rental supply putting more pressure downward on rents.

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