Do residential rents ever go down or just remain flat at worst?

In bad housing markets (which we're clearly in), there are less buyers, and thus, more renters. Does that drive up rental rates? Or does the overall weakness of the economy drive down the price of everything, including residential rents? I think res rents avg 2-6% increases every year, but do they ever go down?
In Market Conditions - Asked by Alladin J. - Dec 16, 2008
Report Abuse
Answer this Question


Ron G.
Waterbury, CT

It depends on area an available inventory. Certain areas in Florida for example have seen a substantial decrease in Rent Rate

Dec 19, 2008
Report Abuse
Stephanie J.
Cameron Station, VA

I have worked in property management for the past nine years. Rental communities drive up rental rates because they know that more people are renting because of the current state. I have never witnessed rental rates decreasing only increasing. Not only market rents but additional fee's charged also because of the cost (supply and demand).

Dec 19, 2008
Report Abuse
Andres G.
Miami Beach, FL

Yes, residential rents can and do go down but not in every market or sub-market. It's all based on supply and demand. I would suggest that you cruise the neighborhood in which your target property is located and call all available Apt's in order for you to determine what current rents are. Go to your local planning commission to see how many unit are being constructed and read research report provided by Marcus Millichap and Torto (CB Richard Ellis.)
Your Networth = your network
Learn More about me
Andres Garcia

Jan 22, 2009
Report Abuse
Paul S.
Glendora, CA

Like all real estate prices are driven by supply and demand. Yes they can go down. In large metro areas not as easily maybe but they can go down. If an area has few employers and a major one closes there can be a substantial drop. In an area that is growing rapidly and building is slower than demand then up it goes. Soon as the demand slows Bam! down it goes. Las Vegas hotels are a prime example. Right now you can stay on the strip for $55. Try that a couple of years ago. Same thing happens with rentals only usually slower.

Feb 5, 2009
Report Abuse
Chris S.
Coeur D'alene, ID

Of course rents can go down, it's all about supply and demand. A major employer leaves the area, a military base shuts down, or ... and next thing you know there are thousands of apartments available. Rents would drop to nothing overnight.

Feb 6, 2009
Report Abuse

Welcome to Answers

LoopNet Answers is where the commercial real estate community shares what they know to help each other out. And it's all for free.

Ask a question to get advice from brokers, investors, professionals and local experts.

Answer questions to raise your visibility as a trusted advisor and build new relationships.

Ask a Question

Post Question