However, premiums are still high in some markets.
As rent growth slows nationwide, some markets are becoming more favorable to renters based on long-term price trends, according to researchers at Florida Atlantic University and two others. . Such locations are trading at slightly discounted rents compared to historical trends, according to the Waller, Weeks and Johnson Rental Index, a subsection of the FAU’s Real Estate Initiative. This index measures the average rent in the 100 most populous neighborhoods. Metropolitan areas compared to areas where rents should be set based on historical rental price trends.
For example, in the rental markets of the western states, rents have fallen or returned to levels close to historical trends. A good example is Boise, Idaho, where the average rent is 0.04% he. Compared to historical trends, renters end up with slightly less bargains on typical units in the area. Discounts and premiums are similar in other nearby western markets. A renter in Sacramento, Calif. He probably gets a 0.2% discount. Las Vegas has a premium of 0.39%. In Spokane, Washington, a premium of 0.40%. 0.62% premium in San Francisco. 0.66% premium in Stockton, California. 0.99% premium in Phoenix. A 1.55% premium in Colorado Springs, Colorado, and an additional 1.98% premium in Seattle. In the Midwest, a similar trend occurs in Minneapolis, with a premium of 0.83%.
Based on long-term rental price trends, all of these markets are the most ideal for renters, according to Ken H. Johnson, a real estate economist at FAU Business College. “Rents in many of these areas are below or close to long-term historical trends, so renters in these markets are not overpaying,” he said.
However, the researchers cautioned that trends are localized and not every individual market is becoming more affordable for renter cohorts.
But this “indicates that rents have stabilized in many markets and are returning to levels that should be based on historical rents in certain markets,” said Shelton Weeks of Florida Gulf Coast University. . “Sacramento, for example, has historically faced and continues to have problems with housing prices. Rather, they are returning to levels that are in line with local standards.”
Some markets still require renters to be more patient with trends happening in their area. Examples are in Florida and the East Coast. Charleston, South Carolina has the highest premium in the nation at 10.72%, followed by Knoxville, Tennessee at 10.31% and New Haven at 9.02%. 8.86% in Akron, Ohio; 8.76% in Cape Coral, Florida; Madison scored 8.48%, El Paso scored 8.45% and Hartford scored 8.19%.
The two Florida cities remain among the most expensive rental markets in the nation, Johnson said, but the Live Local Act encourages multifamily development and raises premiums if supply increases. I think it should help by lowering the . live local law It aims to increase access to affordable housing by funding workers’ housing, according to the Florida Housing Finance Corporation website. statewide worker housing strategy.
