Skyrocketing Rents Spell Opportunity

A recent post on claims apartment rents may soon rise by double digits in the hottest markets. And even in the rest of the country, rents may jump 7% in each of the next two years, according to Peggy Alford, CEO of She also predicts a national vacancy rate of 5% in 2012.

Chart of rising rents forecast.

Rising rents

“There will be an envelope of two or three years,when the rise in demand for rentals will exceed the industry’s ability to meet it,” says Chris Macke of  CoStar.


Much of this demand is fueled by the estimated 1.2 million young adults who moved back home with their parents from 2005-2010, and who are now starting to emerge on their own. In addition, more current roommates are beginning to go their own way as well, creating the need for two housing units when one sufficed previously.

The icing on the cake for apartment owners is the fact that virtually nothing has been built in the last few years, and new developments are only beginning to make a comeback. Part of the delay was due to lack of demand, and part because of the difficult loan environment.

A related article you may find useful:

Investing in Apartments: 3 Reasons Why Now Is a Great Time

And here’s a link to the source for this blog:

Rents are rising — lock in your lease (

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