Rents are way up, and sellers aren’t lowering their asking prices at all. Time will tell.
This follows something I mentioned earlier, but some people thought I was full of it. Many of the apartment owners are also builders. CBRichard Ellis(BRE), KBhomes just to start. With vacancy rates under 5%, it is possible for the apartment complexes to push rates up. The whole idea is to alternately push house and then apartment rates up (one side then the other side of the bubble). In many cases you can rent a house for what an apartment would rent for. If a 300 unit apartment complex raises rent by 10%, and gets a 10% increase in vacancy (about 30 apartments vacant as a result).. they basically break even.. but they can now rent those 30 apartments to vacationers..
The apartment owners (who are builders) are trying to push people into buying the houses (pushing the rent-buy equation). One thing to watch is the fee for break-lease. The higher the fee, the more the apartment complex feels that better deals with renting may be around the corner or available within the lease period. If the apartment complex feels that they can get more within 6 months or less, the break lease will be less (almost want to encourage you to break-lease).. Break-lease fees in SD went up almost 50% on some apartment complexes in SD recently.
