Apartment Price Change Varies Widely
The housing crisis has caused a lot of volatility in the apartment rental market as well as the mortgage market. The interesting thing is that, depending on where you are looking to rent, prices may be much higher or much lower than a year ago.
Data released by Investment Instruments Corporation shows that market prices increased by as much as 14.6% and fell by as much as 9.3% in some metro areas. The average change for the 12 metro areas surveyed was a gain of 3.3%.
The overall data was reported as follows:
Metro Area Q107 Q208 %Change Atlanta $1,007 $986 -2.1% Austin $936 $907 -3.0% Boston $1,593 $1,645 +3.3% Chicago $1,328 $1,355 +2.0% Las Vegas $1,053 $1,056 +0.2% Los Angeles $1,638 $1,699 +3.8% Miami $1,411 $1,368 -3.0% New York $1,606 $1,751 +9.0% Phoenix $1,035 $939 -9.3% San Francisco $1,579 $1,810 +14.6% Seattle $1,098 $1,211 +10.3% Washington, D.C. $1,608 $1,687 +4.9%
The rise in San Francisco is attributed to population growth causing increased competition for available apartments. High home prices there also create a larger percentage of people in the rental market. The drop in Phoenix is likely caused by an abundance of unsold single-family homes. That situation has caused housing prices to drop, making homes more affordable to would-be renters. Less demand for rentals has driven their prices down.
This latest data is another example of the importance of physical location on personal finances. When we reach the limits of what we can do to maximize income and reduce expenses, looking at larger influences such as location is the next step. Borrowing money at a high interest rate to support a reasonable lifestyle in an expensive location may not be sustainable. Comparing potential income and expenses in other places may help to highlight another city that would offer you better financial opportunities.
Wednesday, June 11th, 2008 at 6:50 am