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Rental prices increasing: An influx of new renters raises prices on properties
Berenice Quirino/Staff photo - Rent prices are on the rise in McKinney and the surrounding North Texas area.
By Andy Pawlinski, Staff Writer
MCKINNEY - With a slumping housing market and an influx of renters, the market has taken on a new face.
Prices for rental properties are on the rise nationally, and McKinney is no exception. One-bedroom and two-bedroom rental properties experienced the biggest increase. One bedrooms increased by 15.38 percent and two bedrooms increased by 13.17 percent in McKinney, according to Paul Glegler spokesperson for hotpads.com.
"McKinney seems to be following the national trend of increased rental prices, with the median rental price increasing by 6.8 percent since last year," Glegler said.
"Many factors are driving more renters into the market or keeping them in the rental market longer including: foreclosure, tight credit, economic losses, and job security," Michelle Pulman, spokesperson for rent.com, said. "In particular, increased employment rates among those ages 25 through 34, the prime renting years, as well as decreased home ownership rates among those under the age of 44, prime buying years, are key factors driving the increase in demand."
The renting industry has seen many benefits from the market switch in philosophy of renting over buying and that has led to additional financing for the future development of new rental properties nationwide.
"The recession has driven changing attitudes about renting vs. buying and the multifamily industry is poised to reap the benefits over the next several years," Pulman said. "With a healthier rental market, we see more financing for multifamily development flowing into the sector. New construction permitting is up; so the next few years will see more apartment supply flowing into strong markets to absorb the increased demand for rentals."
The good news for those looking at the rental market is rental prices will see a decrease in price with the incoming of supply from other sectors of the housing market such as some foreclosed properties or properties failing to find buyers.
"Prices will begin to level out when the supply of rental properties gets closer to the market demand," Glegler said. "We believe the supply will most likely come from either foreclosed properties or long-standing for-sale properties, which will re-enter the market as rentals. However, since there is usually a lag time between property going into foreclosure and re-entering as a rental, the supply might remain low for the foreseeable future."
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