Are you in the market for a new apartment? Prepare yourself for sticker shock. Rent is going up across the country and it’s a trend that, at least for now, is here to stay.
Why? Much of the reason comes down to supply and demand. Populations in large cities are growing at a rapid pace and the housing market can’t keep up. This shortage is, or course, causing housing prices to go up as well. High real estate costs make it harder for people to save for a down payment, causing them to stay in their apartment longer, which perpetuates the shortage.
As you can see in the graphic, renting is the norm in many metropolitan cities. This was always the case in cities like New York and Los Angeles because of high real estate costs. But now a dozen cities are joining the club and it’s pricing people out of these cities.
The median rent costs for a one bedroom in San Francisco is $3,400! Just under that is New York at $2,870, San Jose at $2,460 and Boston at $2,300. According to Zillow, you would need to have a net income of $6,000 per month (that’s post taxes). While that make be a cakewalk for the wealthy, many teachers, government works and service industry people make no where near that.
Not all cities are seeing a decline in rent. Places like Anchorage, Baton Rough, and Oklahoma City are seeing a steep decline in rents. If you are open to moving to a new city, there are plenty of opportunities to find affordable housing. Heck, you probably can even afford to buy a home. Finding a “city on the rise” will not only allow you to live bigger, your real estate investment could yield big returns in years to come.
Want more information on real estate investment? Visit Ali Safavi Real Estate