Raleigh Apartment Woes hit Wall Street Journal, Raleigh with 7th largest rent increase in nation!
Second quarter results are in and apartment rents continue to push skyward, with a 12.4% increase since last June!
Some are attributing the bullish apartment market prices not to increased demand, but instead to the stricter "mortgage-lending standards that have shut out potential homeowners from the market." (WSJ)
While an interesting thought, what really caught my eye was the section on Raleigh, where the WSJ reports the capital city's "rents rose 1/2% in the second quarter, the 7th largest rent increase in a metro market."
The subsequent WSJ interview with Raleigh millennial Abbie Swank confirmed fears we already know too well here in the capital; cost effective rents are too sparse in Raleigh, and the few that exist are located are on the outskirts and sketchier parts of town.
There may be hope for renters as we push towards oversupply of apartment units in Raleigh and developers begin to cut their profit/construction margins to more favorable $1 psf rates. But the underlying issue that no one wants to address is that the US economy has NOT turned around and renters are either underemployed or making significantly less than they should.
In the words of Ms. Karol of IHS, "When you compare that kind of [rent] growth to what we've seen in wages and salaries, you start to see, wow, some of these costs are just out of this world for a lot of people."
We couldn't agree more Ms. Karol. Let's hope it turns soon.
- Capital Compass