A recent article by Jennifer Gonzalez with Idaho Business Review (April 11, 2014) reflects on the increased rental housing demand in the Treasure Valley that has shifted rent prices higher across the board during the past several months. Vacancy rates are low -- historically low for some property managers including First Rate Property Management as we reported earlier this week.
Adding to the ranks of those seeking rental housing are the folks being displaced by owners who are now able to sell property that was mortgaged underwater just a couple of years ago. In addition to the much-anticipated higher rents, owners are also welcoming relief from the move-in and other incentives they have needed to offer in recent years in order to keep vacancy rates down. Bottom line: owners will be making more money, with less expense, and will have deeper pools of qualified tenant applicants.
Things are looking up!
Looking for a rental in the Treasure Valley? Expect to pay more, find less inventory
By: Jennifer Gonzalez
April 11, 2014 -- Idaho Business Review
A spike in demand for apartments or homes to rent has pushed vacancy down, and rental rates up.
"I've never seen demand for rentals as high as it's been in the last four or five months," Park Place Property Management President Andrew Propst said.
"In some cases, we will have just one day to prepare an apartment from the time one tenant moves out, and another needs to move in," said Steve Fender, President of Verity Property Management.
According to data from Mountain States Appraisal and Consulting Services, of 13,933 units surveyed in January 2014, there was an overall vacancy of 2.3 percent. By bedroom count, vacancy for a one bedroom unit was 1.6 percent; a two-bedroom: 2.9 percent; and three bedroom: 2.6 percent. In comparison, in January 2009, 13,288 units were surveyed with an overall vacancy of 9.5 percent. Vacancy for one-bedroom was 7.9 percent; two-bedroom: 10.3 percent and three-bedroom; 11.7 percent.
Park Place Property Management manages 2,200 rentals in the Treasure Valley, including apartments and other multi-family units and single-family houses. In the last year, Propst said larger families who have been renting single-family homes have been displaced at a higher rate than before, because homeowners who purchased those properties prior to the economic downturn are now selling them, forcing their tenants to seek other housing options.
"It's an interesting phenomenon especially apparent among buyers who got in in 2005, 2006 and 2007 and were underwater, but are now in a position to sell," Propst said.
Most in-demand properties are one-bedroom, one-bathroom units or three-bedroom multi-family townhouse-style units, Propst said. Location is also a big factor, with more demand for multi-family properties closer to Boise.
"Anything close to downtown is staying full," Fender said. "Young, educated people don't always want the anchor of real estate and are looking for an urban lifestyle."
Verity Property Management manages 1,900 units in Ada, Canyon and Twin Falls Counties. In the last year, Fender said rental rates have gone up 1.5 to 4.5 percent, dependent on the building and its location. In the C.W. Moore Apartments in downtown Boise, managed by Verity, every one-bedroom unit is occupied. Fender said, an 98 percent occupancy rate is preferable, but in the last year, that number has neared 100 percent in many of his properties. Concessions and other incentives to lure tenants have also gone away.
"The apartment market has become flooded in the last year and rents that were $600 someplace, are now easily $650 or higher," he said.
"In my 15 years in this business, I haven't seen anything like this," Propst said.
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