SEATTLE, July 28, 2016 /PRNewswire/ -- Median rent
for the least expensive multifamily rental homes is rising faster
than median rent overall, and only a small portion of all new
apartments is at the low endi, according to the latest
Zillow® analysis.
Instead, most new apartment construction is at the top of the
market, where luxury units command top prices from wealthy
renters.
Zillow analyzed median rents in 15 major housing markets across
the country and found that median rent for the least expensive
third of apartments was outpacing the overall rental
marketii.
The trend is especially prevalent in California. In Sacramento, for example, the price of the
least expensive rental homes rose 33 percent over the last year,
while overall median rent rose just 7 percent.
Cheaper apartments were more in line with overall rent
appreciation in Denver and
Seattle. The least expensive
rentals rose 9 percent in Denver
over the past year, while the rental market as a whole rose 7
percent. In Seattle, the least
expensive rental homes rose 14 percent and the entire rental market
rose 9 percent.
"There's a growing divide in the rental market right now," said
Zillow Chief Economist Dr. Svenja
Gudell. "Very high demand at the low end of the market is
being met with more supply at the high end, an imbalance that will
only contribute to growing affordability concerns for all renters.
We're simply not building enough at the bottom and middle of the
rental market to keep up with demand. As a result, these segments
are becoming very competitive, as both new renters look to find
their first place and existing renters get shut out of
homeownership because of extremely limited for-sale inventory.
Apartment construction at the low end needs to start ramping up,
and soon, in order to see real improvement."
In Tampa, Fla., 93 percent of
apartments built after 2014 were among the most expensive. In
Miami, 69 percent of listed new
construction was among the most expensive and just 11 percent was
among the least expensive.
Charlotte, Denver and Seattle had the smallest percentage of low-end
construction built after 2014 -- just 4 percent of new construction
in Charlotte was among the least
expensive third of rental homes and only 7 percent in Denver and Seattle.
Metropolitan
Area
|
Zillow Rent
Indexiii (ZRI) among Low-End Apartments
|
Low-End ZRI YoY
Change
|
ZRI Among High-End
Apartments
|
High-End ZRI YoY
Change
|
Entire
Multi-family Rental Market ZRI
|
Entire
Multi-family Rental Market ZRI YoY Change
|
Percent of New
Construction in Low-End Since 2014
|
Percent of New
Construction in High-End Since 2014
|
Los Angeles-Long
Beach-Anaheim, CA
|
$
2,029
|
27.5%
|
$
3,176
|
20.8%
|
$
2,370
|
6.7%
|
17.2%
|
53.5%
|
Chicago,
IL
|
$
1,155
|
6.4%
|
$
1,947
|
-1.0%
|
$
1,580
|
1.0%
|
8.5%
|
79.2%
|
Dallas-Fort Worth,
TX
|
$
1,020
|
16.3%
|
$
1,712
|
8.0%
|
$
1,324
|
5.5%
|
11.2%
|
63.5%
|
Philadelphia,
PA
|
$
1,102
|
17.9%
|
$
1,792
|
6.7%
|
$
1,234
|
3.0%
|
14.2%
|
68.9%
|
Washington,
DC
|
$
1,551
|
7.7%
|
$
3,229
|
25.7%
|
$
1,904
|
1.0%
|
13.3%
|
55.7%
|
Miami-Fort
Lauderdale, FL
|
$
1,482
|
14.2%
|
$
2,367
|
6.3%
|
$
1,626
|
5.3%
|
10.7%
|
69.4%
|
Boston, MA
|
$
1,908
|
17.3%
|
$
2,684
|
-1.0%
|
$
2,178
|
3.9%
|
16.8%
|
68.4%
|
San Francisco,
CA
|
$
2,456
|
24.6%
|
$
5,944
|
29.3%
|
$
3,026
|
9.2%
|
n/a
|
56.3%
|
Seattle,
WA
|
$
1,263
|
13.7%
|
$
2,409
|
20.8%
|
$
1,763
|
8.7%
|
7.4%
|
65.4%
|
San Diego,
CA
|
$
1,754
|
21.7%
|
$
2,992
|
21.9%
|
$
2,101
|
6.1%
|
11.2%
|
64.2%
|
St. Louis,
MO
|
$
693
|
5.5%
|
$
1,059
|
8.1%
|
$
936
|
0.4%
|
25.3%
|
61.6%
|
Tampa, FL
|
$
934
|
13.1%
|
$
1,513
|
16.6%
|
$
1,196
|
5.7%
|
n/a
|
93.1%
|
Denver, CO
|
$
1,164
|
8.6%
|
$
2,060
|
13.9%
|
$
1,604
|
6.5%
|
6.6%
|
60.0%
|
Charlotte,
NC
|
$
868
|
12.0%
|
$
1,535
|
14.0%
|
$
1,195
|
3.4%
|
4.2%
|
71.3%
|
Sacramento,
CA
|
$
1,186
|
32.7%
|
$
1,946
|
28.4%
|
$
1,350
|
7.4%
|
n/a
|
n/a
|
About Zillow
Zillow® is the leading real estate and
rental marketplace dedicated to empowering consumers with data,
inspiration and knowledge around the place they call home, and
connecting them with the best local professionals who can help. In
addition, Zillow operates an industry-leading economics and
analytics bureau led by Zillow's Chief Economist Dr. Svenja Gudell. Dr. Gudell and her team of
economists and data analysts produce extensive housing data and
research covering more than 450 markets at Zillow Real Estate
Research. Zillow also sponsors the quarterly Zillow Home Price
Expectations Survey, which asks more than 100 leading economists,
real estate experts and investment and market strategists to
predict the path of the Zillow Home Value Index over the next five
years. Zillow also sponsors the biannual Zillow Housing Confidence
Index (ZHCI) which measures consumer confidence in local housing
markets, both currently and over time. Launched in 2006, Zillow is
owned and operated by Zillow Group (NASDAQ: Z and ZG), and
headquartered in Seattle.
Zillow and Zestimate are registered trademarks of Zillow,
Inc.
i A property is considered new construction if it was
built in the calendar year of, or before, the year it was listed on
Zillow. In this analysis, the rental listing years included were
2015 and 2016, so new construction is anything built in 2014 and
on.
ii Rentals in each metropolitan region are assigned
to the bottom, middle, or top tier of rentals based on their
estimated rental price. Each tier contains one-third of the rentals
in the metro region, and the thresholds defining each metro tier
are computed separately for each metro. For data on the middle tier
of rentals in this analysis, refer to the Zillow Rent Index (ZRI),
here.
iii The Zillow Rent Index (ZRI) is the median Rent
Zestimate® (estimated monthly rental price) for a given geographic
area on a given day, and includes the value of all single-family
residences, condominiums, cooperatives and apartments in Zillow's
database, regardless of whether they are currently listed for rent.
It is expressed in dollars.
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/rents-rising-fastest-among-low-end-apartments-300305396.html
SOURCE Zillow