Here’s a piece of bad news for myself and all other renters out there. While I continue my search for an apartment to move into on July 1, the National Association of Realtors is forecasting a 5.3% increase in rents this year. Here are some details from CNN Money:
In addition to making home purchases less affordable, the recent housing boom led many investors to convert apartment buildings to condominiums to try to cash in on the rise in real estate prices. One out of three apartment buildings sold last year were converted into condos for sale, the paper reports, and that took 191,400 apartments off the market, according to the Realtors.
Well, the Realtors organization must be happy about this news. The report obviously comes from a biased source; Realtors would like people to buy rather than rent, and any study that shows a disadvantage to renting must make these folks excited at night.
Here is a further reason for the increase in rents:
Hurricane Katrina also is causing tightness in the rental market, the paper reports, as about half the 100,000 displaced families in the New Orleans area haven’t returned. Most of those families still living elsewhere are now renting.
If I were to stay in my current apartment, my rent would jump from $858 to $910, a 6% increase. My rent hasn’t changed in the last few years as I was able to negotiate with the apartment manager. Otherwise, my rent in 2005 would have been $890.