Gulf Shores apartment rent prices became even more expensive during the second quarter. Vacancies set a new 10-year low and rents rose faster than since before the financial crisis began.
Demand from tenants sitting out the home-buying market pushed vacancy rates to their lowest point in more than a decade. Despite the sluggish economy, average rents increased in all 82 markets tracked by Reis Inc., a real estate data firm. Average rents are now at record levels in 74 of those markets.
Tight Lending Standards Drive Gulf Shores Apartment Rent Higher
With the economy slowly recovering, more people are looking for their own places. But many are opting to rent rather than buy due to tighter lending standards—including higher down payments—and because of concerns about job security.
Reis said that this is only the third quarter in over three decades that the vacancy rate has been below 5%. When vacancies fall to this level, landlords typically accelerate rent increases “and that is exactly what is transpiring,” according to the Reis report.
Generation Y has also been a driving force for higher rental prices in urban areas where job markets are relatively strong. Even though Gulf Shores home ownership costs less than renting, young professionals prefer to rent apartments in the tightly packed city than move out to the spacious suburbs.
Analysts point out that the apartment sector may lose steam if the economy weakens further and tenants begin doubling up again or put up more resistance to Gulf Shores apartment rent hikes. An increase in new construction has led more and more people to squeeze into tight urban areas at higher prices.
If you’re trying to decide whether the increased rates being charged for Gulf Shores apartment rent is cheaper or more expensive than owning your own home, contact us today. We can help you crunch the numbers to see which scenario fits your financial situation the best.