Posted on 08/06/2022 10:54:30 PM PDT by SeekAndFind
The housing and renting market continues to teeter on the brink, and the newest incoming data doesn't offer up any clear signs of stabilization. In fact, new data continues to suggest the opposite: that volatility in housing could only be beginning...and that we're going to have plenty of fodder on deflation, which we have talked about frequently, invoking the effects of a "reverse bullwhip" on the economy.
A new report from Apartments.com examining multifamily rent growth trends for July 2022 shows that the Sunbelt markets are set up for what is being called a "a significant collapse of demand" heading into the back half of 2022.
Sunbelt cities, which had previously "dominated the top 10 rent growth markets in July with eight out of 10 located within the region" are now setting up for the fastest pullback.
Palm Beach is singled out as an example. The city has seen year over year asking rents falling from growth of 30.6% to now just 12.7% at the end of July 2022. Tampa and Las Vegas have also seen double digit pullbacks in rent.
Jay Lybik, National Director of Multifamily Analytics, CoStar Group, who owns Apartments.com, stated: “Throughout the month of July, while multifamily yearly rents continued to perform well above historical averages, the deceleration of rent growth quickened at a time when markets typically post their best results."
He continued: "The deteriorating rent situation highlights a significant collapse of demand in the sector when new unit deliveries are projected to hit 230,000 in the second half of 2022.”
Over in the utopia brewing on the West Coast, places like San Francisco are bucking that trend. Rents in San Fran are just $18 below their all time peak of $3,116 that they set in Q2 2019, the report says. Rents were actually up by 40 bps over the last 30 days to grow 5%.
We'll see how long that lasts...
Overall, however, the rental picture is "deteriorating", according to the release:
Analysts have found that, looking sequentially, 12 markets saw absolute asking rents decline over the past month, the first occurrence since 2020. Miami led the charge with average asking rents down $11 during July, in addition to five markets that reported no change in rents over the last 30 days.
The stark reversal for Sunbelt markets can be seen vividly in the month over month chart. Markets that saw negative or flat rent growth in July are dominated by Sunbelt locations, including Fort Lauderdale, Austin, Orlando, Charlotte and Tampa, amongst others.
So, if there is no demand for rentals, where are people planning to live? I don't believe people are buying.
How to Live in Your Car
In times of uncertainty, people tend to.hunker down.
People are less optimistic under Biden and less willing to take a chance on a move away from their safety net.
New housing starts are slowing, as well.
This is actually a good thing for the “little” people.
It means Rents should be collapsing as well. Lower Rents are good for the Renters.
Also, more young people are living in with mom and dad to save money instead of launching.
This is about the rate of growth of rents. They’re still expected to increase at over 12%, which is higher than inflation.
Being alive is just plain expensive!
I see a lot of places in that list where no sane person would ever want to live.
So a collapse means that rent is only increasing at 12.7% every year.
In my entire life there has never been a year where my salary increased by 12.7%.
I would prefer to keep my reliable renter in place...especially with the loss of the SALT deductions on my federal taxes.
Just at Fry’s tonight. Family size box of Corn Flakes was $5.99 when it was always $4.99. That’s a 20% increase. Dry dog food is 50% higher. Most of the grocery items I regularly buy are 15-20% more than a year ago, unless they’re on sale. To hear the “experts” say inflation is around 9% just blows my mind.
Note that the cereal box is twice as thin with less volume as well.
Housing starts are down because of Higher interest rates and the BIDEN RECESSION!!
I am not sure that “rent growth collapsing” necessarily means a collapsing of demand. It may justs be that people can’t afford the rent at existing levels. So they may be moving in with parents, friends or seeking out roommates. But if rent because more affordable, they would strike out on their own.
If rents consistently outpace wage increases, something has to give.
Yup. Our plumber has increased his house call fee by 33% in the last year. Our garbage collection is over 50% as well, likely due to diesel costs.
th wordage is very irritating
.........
‘growth’ really means...
monthly rent increase
or something else?
please be specific
Not necessarily the young people’s faults - many have simply been priced out of the market.
I’m renting because I’m not sure whether I’ll be able to continue to work remotely or not. If so, I can buy a house anywhere. If not, I need to be within commuting distance. Also, house prices here in Charlotte have exploded in the last two years. They’re up about 50% in that time. Rent has also gone up about 20-25% in the last year. I notice a lot of people are moving further away in response because they just can’t afford the increased rent. There are a lot of vacancies in the nicer/trendier rental properties you did not see a year or two ago.
I think we’ve reached the end of the rent hikes. The market is signaling it simply will not bear any more. Less rent than they wanted still beats units being vacant long term. The same thing is happening with house prices here. The increases have stopped. I think at some point the bubble has to burst and real estate will have to give back some of the insane price increases of the last couple years. Inflation is crushing people’s income.
You can always live in your van and meet hawt wimen
https://www.youtube.com/watch?v=t4QQTfIvzv4
Then again, every nomad need roots and a piece of land
https://www.youtube.com/watch?v=JpZm8Jf7t5A
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