As lending standards have tightened and household incomes have shrunk, many Americans have been increasingly turning to the rental market for at least a temporary fix. Landlords are recognizing the increasing demand with higher rents.
The New York Times reported last week that the average Manhattan rent in September was US$3,331, up 6% from $3,131 a year ago and an 11% increase from 2009 when it as $3,013. The vacancy rate in Manhattan is close to 1%.
“Across New York, rents have not only rebounded from the depths of two years ago, but are also surpassing the record high of 2007 during the real estate boom,” said the New York Times report.
For some perspective, the latest average rent for a two bedroom unit in Canada was $839 in April, according to the Canada Mortgage and Housing Corporation, up 2.2% from a year earlier.
The New York Times used data from CitiHabitats, which also revealed some larger trends in the rental market. In the last quarter, just 5% of leases reviewed included concessions such as free rent or payment of broker fees, compared to 23% of leases a year earlier.
New York is not the only city to see such increases, however. Chicago saw rent hikes of 7% in 2010, and this year rents are expected to rise a similar amount, according to a forecast by Appraisal Research Counselors. Rental rates rose in every one of the 82 U.S. markets tracked by Reis Inc. this year, other than Las Vegas, while the national vacancy rate sunk below 2006 levels for the first time to reach 5.6%.
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