Apartment vacancies in Hampton Roads rose to their highest point in more than a decade during the past six months and rents continued to fall, according to a report released Monday.
The vacancy rate was 7.3 percent for the six-month period that ended in April, according to Real Data, a Charlotte, N.C.-based apartment research firm.
Meanwhile, "same-store rents " in Hampton Roads, or the average rental price for apartments in buildings that have been around for a year or longer, fell 0.2 percent, to $869, for the same six-month period, Real Data reported.
It's only the second time the research firm has recorded a drop in Hampton Roads' rents since it began tracking the data in 1997. The research firm recorded the first local drop in rents for the six months ended last October.
"There are two issues in the rental market," said Vinod B. Agarwal, an economist at Old Dominion University. "Supply of apartment complexes continues to increase, while demand has softened."
Across Hampton Roads, developers are constructing nearly 1,500 apartment units. An additional 3,800 units are planned.
In the coming months, several hundred apartment units will be completed and ready for tenants, which likely will push vacancy rates up more, according to the Real Data report. The research firm expects the vacancy rate to reach 8 percent in the next six months.
At the same time, the firm predicts rents will remain relatively flat.
"Landlords are always reluctant to lower prices," Agarwal said. "It's just like when you sell your home, you're reluctant to lower the price."
Dan W. Johnson, a senior vice president at real estate firm CB Richard Ellis and a specialist in the local apartment market, predicted increased pressure on landlords in the coming months.
"They're going to respond in one way or another," he said. "They're either going to lower the published rent or offer concessions, which effectively lowers the rent."
To date, landlords have not turned much to concessions, such as one month of free rent, Johnson said.
Vacancy rates during the past six months were highest in Hampton and Newport News. Rates were the lowest in Norfolk at 6 percent and Chesapeake at 5.5 percent.
Josh Brown, (757) 446-2318, josh.brown@pilotonline.com
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My comments are...
about the economy in general, not just that part of it that applies to housing or residential renting.
It's hard to take anything seriously...
about the economy as far as what's reported by the media nowdays. I thought we had recent news that 'housing starts' were up, as were home sales. With the Dems in power, and the media (like 'our' Pilot) firmly in their corner, it's logical to conclude that we are dealing with, for all intents and purposes, a state run media. So hoping for, much less expecting, honest, accurate reporting and assessments about any aspect of the economy requires a huge leap of faith.
That's so not fair. When the
That's so not fair. When the Republicans were in office, the media was the same. The Realtors (their trade association is called the NAR, or National Association of Realtors) have a very very powerful lobby. They invested over $40 million in an advertising campaign after the bubble popped to try to convince people to return to buying overpriced homes. In addition, their leader David Lehreah was always quoted by every media outlet in the USA when Bush was in power. He has now admitted he was just a shill and it was his job to pump things up. Oddly, that part didn't make the news like all of his quotes about how real estate would only go up and never go down. Homes are considered success and people get all emotional over it, even though many people "bought" with 0% down and have zero skin in the game. They are somehow called homeowners (which I think should be reserved for those that hold the deed). Honestly, there is no way to save housing values, the only real correction to our problems is to let the markets correct, the values plummet. Some will loose, they need to. They made bad decisions.
Wow
Talk about paranoia. It is always so funny to see somebody whine about the 'liberal media', but 'state-run media', that takes the cake. It seems that a lie is as good as the truth if you get somebody to believe it. Or, if you repeat a lie enough, you think that it is the truth.
AM..
you can whine all you want about 'paranoia', the facts bear my point out. Media organizations that abandoned holding all in power accountable and shilling for one side only have to be viewed by how they conduct themselves. The Pilot (locally) and most national media are merely extensions of the Dem party talking points. You wish to ignore that, you are free to do so. Kool-Aid is still inexpensive, isn't it?
Your post makes some sense, in that lies repeated often enough will be accepted as truth. That is proven every day with said media. Thanks for pointing that out.
Drink up now!
Rental Warning !!!
Something to add: home rentals have an effect on apt. rentals and there have been many more homes for rent too. Renters need to watch themselves in renting a home. The house may be on the rental market because the owner is ready to go into foreclosure. The renter would have no way to know this. If it were I, I would ask the landlord to show me his payment book to see the price spread between the payment and the rent. If it is too great, the landlord is in trouble with his payments. If foreclosure occurs, the renter has lost everything including a place to live !!!!
Clueless landlord needs to read this article!
I have had my rent INCREASED this year by almost $200 per month. The buildings are in disrepair and code enforcement is at the complex monthly. To add to the "enjoyment" the landlord has an adversarial relationship with his tenants. (Hard to believe, I know.) Due to circumstances beyond my control, I was not able to move at lease signing time so I am stuck for now. I cannot wait to move since there are plenty of empty apartments, houses and even rent-to-own homes out there. This clueless landlord can keep his empty, dillapidated buildings, weeds and sewage as I wave good-bye in the rear-view mirror!
Can you un-moderate me please?
Par for the course in Hampton Roads. If it's not management companies out looking to take advantage of military folks (before the internet, they could get away with being dishonest and there was always a turnover of people so there were new clients). The flip side are the Military folks that buy places even though they are only going to be here 2 years. Then when they leave they decide to rent their investments out. Except they aren't around to take care of any of the problems, and often don't have any money to fund repairs. The HGTV house hunter special didn't mention that landlording is actually work.
While salaries have remained
While salaries have remained stagnant, I believe the Navy's housing allowance has increased which is what the slumlords are after.
Also, it's been harder to qualify to rent a place than it has been to buy one in recent years. The mortgage folks were willing to do anything to get someone into a mortgage (as long as they get their commission and sell the mortgage before it gets behind). Meanwhile credit checks and real income are needed to rent.
With 1500+ apartments coming online in Norfolk with rents of ~$1700 for a 2 bedroom, who's going to rent them? Let's face it, the jobs in Hampton Roads are pretty bad. Even if you get a good paying one, the likelihood of it being challenging is low. Good people move away.
@Jennie M
I can certainly see we were on the same page. Totally agree !
Cost Of Living vs/ Wages
In Hampton Roads, I believe the pay has not caught up with the cost of living in the area. Imagine if you are making a list 30k a year and staying in an apartment paying at at least 900 a month. Majority of your income is going to pay for the rent. The same apartments with continous name changes and overexaggerated renovations. Note to Hampton Roads employees; pay the employers what they are worth and they wont consider moving to other metropolitan areas after they graduate. We have some of the best colleges in the area but cannot retain the graduates to stay because of the low pay when they can go up to the DC Metro area and make 4x the amount they would get here which is less than 3 hours away.
Low wages vs high cost of living
Let's face it, the cost of living in the Hampton roads area is high. The wealthy can afford it and the poor can get assistance but the middle class folk are being pushed out. We've been renting here for 10 years and the rent rates have increased at a much faster rate than our salaries. We love it here, but like many others are leaving because it is too expensive.
And yet the cities are still building more?
How many "joint development projects" are being done with our tax dollars? Isn't it time for local politicians to get a clue and stop all the huge waste of our tax dollars to support what should be a private project done with private funds? Most of us could not afford to live in these up-scale projects, yet our tax money is being used to pay for them. Maybe the real question is, WHEN are WE going to get a clue and VOTE OUT all these local politicians? Instead we continue to re-elect them time and time again. It's time for us to vote out all incumbents of every elected seat and to insist that TERM LIMITS are invoked on all elected and appointed seats of public trust.