This is a re-post of something I found on Ben’s blog.
I believe that it’s a sign of what’s to come in San Diego. Remember all the free rents of the 1990s? They’ll be back.
Owners right now are still in denial. So it’ll take time.
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The Providence Journal from Rhode Island. “One classified newspaper ad says ‘1st Mo. FREE.’ Another: ‘Free Heat, Free Hot Water and FREE RENT!’”
“The latest ‘promotional giveaways’ to lure new tenants even include a free spa getaway weekend. If that’s not enough, one property manager offers $500 to anyone who makes a referral that lands a new tenant.”
“The reason is simple: rental properties are going empty. ‘Our occupancy rates are off anywhere from 2 to 5 percent’ from last year, said Cheryl Martin, VP of Residential Property Management of Warwick. ‘We need to do something to be more aggressive in order to compete.’”
“Property managers and real-estate agents say the demand for rentals priced at $1,100 per month and up has gone soft. Not since the recessional mid-1990s, Martin said, have they resorted to freebies to lure new tenants.”
“The large number of rentals going empty is reflected statewide in the ‘rental vacancy rate,’ which has nearly doubled in the last three years, to 7.7 percent last year, according to U.S. Census data.”
“‘We’re flooded with inventory,’ said Diane Barone, a real-estate agent in Cranston. ‘The rental market is terrible; it’s just terrible. You get a bunch of people and you show, you show, you show, and they’re just sitting there.’”
“The construction of hundreds of condos, many in downtown Providence, has also flooded the real-estate market, and some of the spillover is driving up the inventory of rentals as condo owners who can’t sell their units decide instead to rent them out.”
“‘I have a client right now, he’s got a little house on Ninth Street for $1,600 a month, and he’s down to $1,300 and nobody even wants to look at it,’ said Suzanne Knight, a real-estate agent on Providence’s East Side. ‘It’s been vacant for four months now. … There’s just much more supply than demand.’”
“East Side property owners are competing with new downtown properties, Knight said. ‘There are hundreds of rental units downtown that weren’t here two years ago,’ Knight said. ‘You’d think landlords would lower their rents, but it takes a while. So they’re empty.’”
