YPs Remain Influential to Rental Market

PrintEmail

Noticed a number of “For Rent” signs on your block recently?
 
If so, you wouldn’t be alone. Apartment vacancies have been at record-high levels in the past year and many apartments are empty because young renters have sought alternatives to renting on their own during the recession.
 
According to Reis Inc., a New York-based real estate analytics firm, the national apartment vacancy rate remained at 8 percent for the first quarter in 2010. This is the highest vacancy rate Reis has recorded since it began tracking the figure in 1980, reports The Wall Street Journal. Reis tracks apartment vacancies and rents in the top 79 U.S. markets.

 
Multiple media reports point to young adults as the most common rental demographic, as well as among the hardest hit by recession job losses. Many potential renters chose to move in with family members or double up on roommates during an economic downturn, The Wall Street Journal reported. This is especially true for young renters, according to Time.
 
Of course, with high vacancies have come deep discounts and some savvy YPs have been able to take advantage of the specials and concessions offered by landlords.
 
Sara Singer, 27, recently found her ideal one-bedroom apartment in Hermosa Beach, Calif. at a significant markdown thanks to the rental market slump.
 
But it wasn't so long ago that Singer had a very different apartment-hunting experience. When she moved to the beachside community from Kansas City, Mo., in 2008, Singer was forced to move in with roommates, after it was “just near impossible” to find a nice one-bedroom in her price range. This time around, Singer found more vacancies in the area and at better prices.
 
“I was able to get every amenity I had hoped for—for a much more reasonable price,” Singer said of her current apartment. Not only does she have a view of the beach, a parking space and an apartment a block away from the ocean, but her rent is $200 less per month than what was advertised.
 
Singer said her apartment had been sitting empty for six months before she rented it and the landlord seemed “motivated” to offer a deal. When first looking at her place, Singer told the landlord that she had seen similar apartments for less. He immediately dropped the rent rate on the spot.
 
Two years ago,“people were not willing to negotiate on anything,” Singer said.
 
Singer has a friend in nearby Manhattan Beach who also got a sizable break on her rent when she mentioned to her landlord that she was going to move instead of renewing her lease.
 
But not everyone is so lucky. Singer said some of her friends have left the area after losing their jobs. With her recent apartment search, she also noticed many young people posting ads online looking for additional roommates.
 
Deals like the one Singer found might not be around for long, as the rental market has recently shown signs of a slight recovery.
 
According to Reis, apartment rents rose in 60 U.S. markets during the first quarter of 2010. The previous five quarters all recorded declines in apartment rent prices, the Journal reported.
 
Effective rents, which are rents that include concessions, rose 0.3 percent in the first quarter of 2010, compared with a 0.7 percent decline in the last quarter of 2009, the Journal reported.
 
Along with a slight increase in rent, it appears that more people were looking for apartments in the first few months of 2010, compared to previous years. Apartments.com, a national online apartment listings site, reported that its site had received 11 percent more visits in the first quarter of 2010 than the first quarter of 2009.
 
And young professionals may be among those looking to rent again.
 
Phil Wharton, vice president of development at AvalonBay Communities, Inc., said that young professionals are a target demographic for the company, specifically in the N.Y. metro region. Residents at the Avalon Fort Greene apartment community in Brooklyn, N.Y. have an average age of 33; the community began leasing last fall.
 
AvalonBay, headquartered in Arlington, Va., has apartment communities in 10 states and Washington, D.C.
 
In an email to YPNation, Wharton said job growth in usually linked to an improvement in rental and housing markets. “Key rental markets such as New York have already begun to see growth as the economy recovers,” Wharton said.  
 
“As YPs already constitute a substantial portion of our customer base, any increase in demand is likely to be driven, in a major part, by YP customers,” he said.
 
For YPs looking to rent—whether for the first time or returning to the rental market—Singer suggests that negotiating is always an option. She said it never hurts to ask, or to sell yourself as responsible and professional.
 
“[There’s] more room for negotiation if they realize you are going to be a good tenant,” Singer said.
 
(Photo credit: threecee; C.C. 2.0)
 
Read more from YPNation on how one young professional rebounded from unemployment.