Rents Are Rising in Washington D.C.—Unlike Anywhere Else
A Woodley Park Apartment building
Well, Houston’s the exception (incidentally the last major city I lived in).
But it’s true: That city and the District are the only two major urban centers nationwide where rents are increasing or staying stable, according to Forbes magazine.
I experienced this trend myself last fall when my Columbia Heights rent rose $40 from the previous year’s rent. And that was with some negotiating! First, we had to point out to the landlord that the hike she proposed didn’t entirely adhere to city policy.Her instincts were correct in asking for more though. Washington has the “second-best apartment rental market in the U.S., with rental income down less than 1percent,” according to Forbes.
Here’s more from that piece:
Dallas-based Axiometrics’ latest survey of 13,000 rental-property managers was unsettling: Rental “revenue per available key” fell 4.1% in the first quarter. Rents in the top 20 U.S. cities are now down 5.7% from a year ago. Phoenix, Atlanta, Las Vegas, New York City and Charlotte all experienced declines greater than 8% from a year ago.
Image by Mr. T in D.C., Flickr Creative Commons
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12:21 pm
The title to this post is quite misleading – I certainly wouldn’t describe a fall of less than 1% in ‘rental income per key’, as described in the Forbes article, an indication of rising rents.
Another important thing to consider when looking at a measure such as ‘rental income per key’ over time is that you have to examine very carefully how the data provider adjusts for changes in apartment quality over the time series. Particularly in cites like DC, where many older buildings converted to condos and many newer buildings reverted to luxury rentals, the quality of rental composition has been quite dynamic. Failure to adjust for the increase in the quality of rentals will understate the true fall in rental income.
Anecdotaly, we knocked 15% off the asking rent when we moved to a larger apartment last year, largely because there were so many vacant rentals the landlord was eager to make a deal. That’s certainly a different market than when I moved to DC seven years ago, when the vacancy rate hovered around 0.5% and I could barely get landlords to return a phone call.