Publication Date:
Tue, 2012-05-08 16:54
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Cities with higher home prices and increasing employment were the ones that experienced the greatest rise in rental rates, according to new data released last week by Trulia.
Using data released last week by Trulia on rentals in the 100 largest housing markets nationwide, 24/7 Wall Street determined [1] the six U.S. metropolitan areas where rental costs have increased the sharpest in the last year (by 10 percent or more). Edison-New Brunswick, N.J. topped the list, sporting a 15.6 percent increase since April 31, 2011.
Trulia economist Jed Kolko credited the heavy increases in these cities to two factors: employment gains and higher home prices. As new jobs become available, people are needing to find places to live. Kolko posits that until those people feel secure in their jobs, they are more likely to rent than buy for the time being, particularly in the wake of a recession. Therefore, rental demand is pushed higher.
In addition, home prices in many of these cities have not dropped as much as in other areas, making them less attractive to prospective buyers.
Looking at those factors, the top six cities are as follows:
1. Edison-New Brunswick, N.J.
• Change in rent: +15.6%
• Change in sales price: -4.7%
• Price drop from peak: -18.2%
• Job growth (1 year): +0.69%
2. San Francisco
• Change in rent: +13.2%
• Change in sales price: -0.5%
• Price drop from peak: -22.1%
• Job growth: +2.92%
3. Miami
• Change in rent: +12.3%
• Change in sales price: +16.1%
• Price drop from peak: -45.5%
• Job growth: +2.34%
4. Warren-Troy-Farmington Hills, Mich.
• Change in rent: +11.8%
• Change in sales price: +6.9%
• Price drop from peak: -35.5%
• Job growth: +2.53%
5. Indianapolis
• Change in rent: +11.1%
• Change in sales price: +1.7%
• Price drop from peak: -6.6%
• Job growth: +1.49%
6. Colorado Springs, Colo.
• Change in rent: +10.2%
• Change in sales price: +4.3%
• Price drop from peak: -11%
• Job growth: +0.53%
To read the rest of the 24/7 Wall Street report, click here [1].
