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August 15, 2009

Rental vacancies here and elsewhere

About one in every eight rental units in the Baltimore metro area was empty this spring -- a vacancy rate that puts us on the higher end of the scale nationwide.

Baltimore's 13 percent rate topped 54 of the 75 largest metro areas, according to the Census Bureau's estimates.

The good news? Vacancies shrunk during the spring, dropping 21 percent vs. the winter. That's one of the larger improvements among large metro areas.

The Census Bureau says the vacancy rate is highest in Memphis -- a whopping 26 percent of units are empty there -- and lowest in Bakersfield, Calif. (2.5 percent empty).

Of course, we have to take all of this with the grain of salt required when dealing with estimates. Does this match up with your sense of things, if you're a renter or landlord?

These numbers, in case you're wondering, include both apartment complexes and single-family homes. And foreclosures could be in the mix: "If the unit is classified as 'vacant for sale only', it will be included in the 'vacant for sale' category," the Census Bureau notes. "If the unit is for rent or 'for sale OR rent,' it will be included in the 'vacant for rent' category."

Posted by Jamie Smith Hopkins at 10:29 AM | | Comments (6)
Categories: Landlording, Renting
        

Comments

It still feels to me (a renter) that landlords get to set the prices and renters just have to find something they're comfortable with. A month free or parking incentives aside, landlords don't seem to be doing much to lower prices overall.

Of course, that could be my experience alone -- I admit to having a certain standard when it comes to apartments. I prefer rodent-free with air conditioning.

This area (despite all the moaning we do here) is relatively strong and a LOT more stable than the rest of the country. But there is still a lot of belt tightening going on.

Responsible landlords are more strict than most loan officers have been; insisting on 3:1 income ratio's and employment stability and minimal other debt obligation (especially CC's) and having enough actual CASH to cover the deposit and first month rent.

The pertinent data point not in your questions is about room mates. How many of those rented units are being shared now vs the past and shared for reasons of need rather than for convenience or social reasons.

ie having a house mate to save for an annual vacation trip vs having a housemate to help pay the rent and utilities.

Justine, the LL has certain "fixed" costs like the mortgage and taxes and insurance and common area electric and heat and yard work and painting and vacancy periods too (there are others)...

if all those things add up to $800/month what do you suggest the LL charge in rent per month?

MrRational -- all I was suggesting is that, in my limited experience in the Baltimore rental market, it seems that landlords aren't lowering rents (even though the vacancy rate is higher here, which could make competition for tenants higher and thus encourage landlords to lower rents).

I don't expect owners to charge renters less than the costs of maintaining the property, but in a competitive market, some might be expected to cut their profit margins to appeal to a wider variety of renters.

Duh? Landlords can only charge what the market will bear. That has nothing to do with what the LLs costs are. Certainly there are slumps when rent cannot cover costs, as well as markets when they can. That said, rent in Baltimore is highly dependent on neighborhood and how well the house is or in not maintained. Realizing the rental market could get tough, I installed central air and landscaped the yard to enhance the appeal of my property and I'm glad I did. My place recently re-rented in 3-4 days at a rent I needed to cover costs.

As a landlord, I can tell you that we can only charge what the market will bear. I have some properties that rent does not cover my cost and others that make me some profit.

You should not forget that LL's are the one's taking the risk. Poor tenants, tax hikes, housing market price drops all can ruin an investor.

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About Jamie Smith Hopkins
Jamie Smith Hopkins, a Baltimore Sun reporter since 1999, writes about the regional economy. Her reporting on the housing market has won national and local awards. Hopkins is a Columbia native and has lived in Maryland all her life, save for 10 months spent covering schools in Ames, Iowa.
She trained to become a wonk by spending large chunks of time as a geek and an insufferable know-it-all.
Baltimore Sun articles by Jamie
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