"Apartment rents fell in every major metropolitan area in the U.S. over the past six months through January, a trend that is poised to continue as the biggest delivery of new apartments in nearly four decades is slated for this year.Renters with new leases in January paid a median rent that was 3.5% lower than they would have paid last August, according to estimates from listing website Apartment List. It was the first time in five years that rent fell every month over a six-month period, according to the same estimates.""The softening rental market follows an unprecedented run for the apartment and home-rental industry put into motion by the pandemic. Pent-up demand for housing exploded in the months after the introduction of Covid-19 vaccines in late 2020 and a surge in people searching for apartments lifted rents 25% over two years.Now, recent declines are a sign that many tenants have maxed out on how much of their income they can devote to rent, while the specter of layoffs has created new concerns for some. Other would-be renters, living with family or friends, remain sidelined by prices that are still far too high for their budgets.While some seasonal stalling in rents is normal, the market faces a significant headwind in the biggest delivery of new supply since 1986, according to projections from CoStar Group. Nearly half a million new apartments are coming on line this year as developers seek to cash in on the high rents that tenants have been paying.""In the months since August, new-lease rents have fallen most sharply in some of the nation’s biggest metro areas. Seattle rents have tumbled 8%, while rents in Boston and Las Vegas have fallen 6%"
"Apartment vacancies have risen since last fall, several reports show, due to weaker demand from potential renters. Fewer people are flocking to Zoomtowns—communities that experienced a surge in population from an influx of remote workers—such as Boise, Idaho, or Phoenix compared with earlier in the pandemic"
This is exactly what we would expect: A short-run rise in prices causes higher profits which leads producers to increase output in the long run. That shift in supply to the right lowers prices.
Related posts on supply and demand:
Egg Prices Surge to Records as Bird Flu Hits Poultry Flocks (2022)Is There A Booze Shortage? (2022)
Car makers face ‘chipageddon’ (2021)
Does the U.S. have a firefighter shortage (2021)
There is no truck driver shortage in the US (2021)
Is there a shortage of homes? (2020)
Why honey prices have climbed about 25% since 2013 (2019-This post is featured in Introduction to Microeconomics by Luís Cabral. He is chair of the economics department at New York University.)
Is there really a shortage of construction workers (2019)
Was there really a shortage of meatless burgers? (2019)
Is There A Christmas Tree Shortage? (2017)
Is There Really A Honey Bee Shortage? (2013)
Will There Be A Pumpkin Shortage This Year? (2011)
Introduction to Microeconomics by Luís Cabral
No comments:
Post a Comment