As home prices decline, rents are poised to soar
Renters here in Greater Boston and across the country can expect to get socked by rising rents and a tightening market over the next few years, a new Harvard report finds.
In fact, after a dip in rents and a rise in vacancies during the Great Recession, both key indicators are turning sharply upward again, according to Harvard's Joint Center for Housing Studies.
Larger, professionally managed apartment complexes saw rents dive 4.1 percent in 2009, only to rebound 2.3 percent toward the end of 2010. That likely to set the stage for an even bigger spike this year.
The market is about to get a lot tighter as well, with apartment complex vacancies having plunged to 6.5 percent in 2010 from 8.2 percent the year before. The overall U.S. vacancy rate - which includes all rentals, not just in the bigger buildings - fell to 9.4 percent in 2010 from 10.7 percent in 2009.
While there is also a surge in proposed apartment complexes, both in Boston and the suburbs, the uptick comes after a years-long decline in apartment construction that saw the number of new units coming on each year fall to anemic levels.
And the longer-term picture may be even more challenging for renters.
Declining incomes and rising electric and other utility bills are slowly but steadily putting the squeeze on renters.
A quarter of apartment dwellers now spend more than half their income on rent and utilities, while another quarter spend 30-to-50 percent, according to the Harvard study.
