Wednesday, May 1, 2013

Is your rent dropping? Bloomberg says yes

Apparently one news source thinks your rent is going to drop -- but I'm not buying it. Bloomberg, the business news website and TV station, has an article out about rent in different US cities and claims rent will drop in DC by 2% this year.

Of course I'd like this to be true, but I can't imagine it. It's nice enough if landlords don't increase rent, let alone drop it. Plus if anybody has tried to find a place to live lately, it's crazy out there: huge open houses with tons of people, long questionnaires for potential housemates, and snap decisions due to places being filled really quickly.

There are some problems to Bloomberg's analysis though: they include the entire metro area, meaning the numbers are skewed by the burbs. They also say there's too much supply, but this doesn't seem to be the case in our area, where apartments are going for more than $2000 in new buildings. I know some buildings have been converted from condos to apartments, but as far as I can tell, those are being snapped up.

In Real Estate Business Intelligence's latest housing report for the 20010 zip code, there are fewer houses on the market now than 1 year ago, but prices are up 17%, which to me means there's still demand.

So if your rent has really dropped, I'd be shocked -- and good for you!


AJ said...

While their timing may be off, I think this is a trend a long time in the making. Just like QE, we will have multiple instances of Sequester: right now we're on Sequester 1. As Sequester 2, 3, etc. pop up, expect federal government layoffs, which of course will hit DC particularly hard (a delayed hit). This will drive people out of the more expensive downtown areas, into the 'burbs, and eventually (possibly) out of the region altogether.

All in all, expect higher rents on the outer fringes of the metro lines - and lower rents on the inner.

- AJ

Andrew W said...

I dunno, I think it would be the opposite -- people are living more and more in the inner areas of the DC and I don't think many of them area affected by the sequester.

You could argue that maybe too many new buildings are going up, like on Mass Ave and 14th and V ish, but those seem to be getting residential tenants anyway.

Doug said...

I moved from a studio at 4th and Mass to a brand new building in Columbia Heights (Highland Park West)in which I am the first tenant and I am saving $170 per month in addition to 1 month free rent upfront...I'm happy:) I've watched rents in all the new buildings up and down 14th and have seen fluctuations here and there, mostly going downward, albeit ever so slightly.