The folks at John Burns Real Estate Consulting in Irvine have some bad news for renters: The landlord has pricing power!
'We believe the apartment business is set to explode, with steadily rising rents and occupancy that will justify new construction.'
JBREC forecast shows rents growing 4.5% annual on average through 2015. The report notes that 'Wall Street and pension fund consensus, at least for apartments in good locations in coastal cities, seems to be that 25%-plus rent growth over the next three years can easily occur.'
Why are landlords in a good spot? Growing household formation and homeownership skittshness. Your landlords best new customer will be, 'young adults, who have either moved back in with their parents or taken on roommates.' Also, weak job. 'The uncertain environment is enough to convince consumers that renting is safer than taking on a mortgage.'