Jun 14, 2011

Image: A "For Rent" sign on the front of a house
 
 
 
Via MSNBC:
 

Renters, long happy to sidestep the drama homeowners have suffered in the roller-coaster housing market, are now facing their downside of the real estate market's correction. With apartment and rental housing construction halved in recent years and a wave of former homeowners competing for apartment space with "echo boomers" and other renters, conditions have suddenly ripened for landlords to raise the rent.

Metelica persuaded his landlord to curb the increase, capping his new rent at $1,550. The roommates and landlord have a verbal agreement for that new rental rate, he says, with a new lease signing imminent. But his ability to talk his way out of a bigger rent increase makes him more of an exception than the rule this year, according to experts.

Last year the rental market quietly shifted from a tenants' market to what is now decidedly a landlord's market, said Chris Herbert, research director at Harvard's Joint Center for Housing Studies. The supply of properties is tightening and vacancy rates are dropping, so landlords have been emboldened to raise the rent.

Nationally, rents are expected to rise 5 percent this year and another 5 percent in 2012, according to Greg Willett, vice president of research and analysis at MPF Research in Carrollton, Texas. The trend is not expected to moderate until 2013, when new multifamily housing construction adds to supply and the housing market stabilizes enough to attract new buyers.

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