Rents continue to rise but at a slightly less accelerated pace, according to Carrolton, Texas-based RealPage, a software provider for rental communities. After rents for new leases rose 4.8 percent in 2011, rents rose 3 percent in 2012.
While lower than the previous yearâ€™s rate, the increase in 2012 remained above the average of 2.5 percent seen over the past 20 years.
â€œProperty owners and operators generally arenâ€™t pushing rents quite as hard as they were a year or so ago,â€ said Greg Willett, VP of research at MPF, which conducted the RealPage study.
Instead, apartment owners and landlords â€œhave focused on sustaining their very tight occupancy levels during a period when job growth and new household formation have been fairly sluggish.â€
Apartment rents did experience some decline during the recession, falling 4 percent, but they have now been on the rise for three years, according to RealPage.
As many housing markets begin to improve, a few renters are leaving their leases in pursuit of homeownership. However, â€œ[w]hile the number of apartment renters opting to buy is rising a little, it remains far below the levels apartment operators were accustomed to prior to the recession,â€ Willet said.
Of those renters transitioning into homeownership, many were renting single-family homes rather than apartments.
Apartment renters are often â€œyoung singles living alone or young-couple households,â€ according to Willet, who says, â€œSingle-family homes just arenâ€™t the right housing option for many of them, regardless of shifts in the pricing relationship.â€
Regardless of the small transition of renters hoping to take advantage of affordable home prices, apartment occupancy remains highâ€”94.9 percent as of the end of 2012. This is up slightly from the 94.7 percent observed at the end of 2011.
The top three markets for rental growth in 2012 are located in Californiaâ€”San Francisco, where lease prices rose 8 percent; San Jose, where lease prices rose 7.7 percent; and Oakland, where lease prices rose 7.1 percent over the year.
Las Vegas was an anomaly among large markets, which generally experienced rising rents. Lease prices in the metro fell 1.7 percent over the year.
Fred Yancy, Broker