Data from real estate analysis firm Reis shows that rental managers have been able to offer fewer concessions this year, with increased competition allowing them to forego concessions and perks such as a free month’s rent. Due to this change and other improvements, asking and effective rents each increased during the quarter, with effective rents posting their largest increase since early 2008.
One researcher from the firm reports that 150,000 to 200,000 new units of apartment housing are expected to see completion next year, which may cause a slowdown in rent growth. With more investors and residents interested in single-family rentals, it is unclear how much impact that might have beyond the multifamily sector. Metro areas such as Austin and Salt Lake City, where development is moving more rapidly, may be more heavily impacted.
Despite these changes, the firm’s projections suggest rental managers and owners will still see a profitable year in 2013, with job growth and other economic fundamentals contributing to a strong rental housing market.