Jeni Bartiromo is a writer based in Los Angeles. She creates digital content for fashion, lifestyle, and F&B brands. She travels occasionally, cooks often and reads daily.
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If you’re a renter like I am, you can probably relate to this experience. It’s the time of the year when my annual lease is almost up. Someone from building management slips an envelope under my door. I open it and scan quickly through the letter to find those two words: rent increase. And I brace myself a little for what’s to follow. How much is it going up this year?
In 2021 and 2022, rents increased at annual rates that are higher than pre-pandemic levels. “If they haven’t already gone up in your city, you should at least be prepared for it. It’s impossible to see into the future, but it is possible to prepare yourself in case that scenario continues,” says real estate agent Jon Shefsky, who specializes in short and long-term leases.
As we move into the new year, are rental prices going to keep up the steep climb, will they level out, or even go down? The agents I spoke to stressed that while the market is unpredictable, the trends they see in their profession are pointing to continued increases.
Yes, Rents Will Rise
Remember, rents are consistently going up, little by little. “There’s always going to be a modest two percent annual increase,” explains Los Angeles-based real estate agent Ashley Temm. “But the average rent for a one-bedroom apartment in this city is up 18 percent from last year. I foresee that trend continuing.”
Many of the emergency tenant protections that were put in place during the pandemic have either been lifted or are about to come to end. That means rental managers can resume raising their rents. And real estate pros believe they will, because landlords are anxious to get back to operating a profitable business. “Landlords are recovering from financial loss because of the eviction moratoriums. They want to increase their rents and get that loss recouped,” says Temm.
There May Be a Silver Lining
Is there any good news for renters in 2023? According to Temm, we can expect property management companies to work harder to attract new tenants. Be on the lookout for more apartment owners to advertise incentives, such as one month of free rent, discounts on renters’ insurance, complementary moving vans, or referral bonuses. “Times are tough, and the cost of living has skyrocketed. People don’t want to pay higher rents, so landlords will end up with outstanding inventory,” says Temm.
Plus, the hot housing market has cooled, so the current renters who were priced out the past several years can finally circle back on their dream of home ownership. But empty apartments don’t create income for their owners. “If they don’t want to eat the cost of so many vacancies, they’re going to have to start offering incentives and perks.”
As an expert in real estate and rental market trends, I can assure you that the information provided in the article aligns with the current dynamics of the rental market. The author, Jeni Bartiromo, discusses the annual ritual of renters facing potential rent increases, a scenario that many individuals, myself included, can empathize with. Now, let's delve into the key concepts discussed in the article.
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Rent Increases in 2021 and 2022: The article rightly points out that rents increased at annual rates higher than pre-pandemic levels during 2021 and 2022. This observation is in line with the broader trend observed in various housing markets during the post-pandemic recovery phase. The author cites insights from real estate agent Jon Shefsky, emphasizing the need for renters to be prepared for potential rent hikes.
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Market Predictions for Rental Prices in the New Year: The central question posed in the article is whether rental prices will continue to rise, level out, or decrease in the new year. Real estate professionals interviewed by the author express the unpredictability of the market but suggest that trends indicate the likelihood of continued increases in rental prices. This reflects the complex interplay of factors influencing the real estate landscape, including economic recovery, housing demand, and landlord considerations.
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Factors Influencing Rent Increases: The article discusses the impact of lifted emergency tenant protections, particularly eviction moratoriums, on the ability of rental managers to raise rents. The insight provided by real estate agent Ashley Temm highlights the motivation for landlords to recover from financial losses incurred during the pandemic, driving them to increase rents.
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Potential Silver Lining for Renters in 2023: Despite the expectation of continued rent increases, the article suggests a potential silver lining for renters in 2023. Property management companies are anticipated to intensify efforts to attract new tenants by offering incentives. Examples include one month of free rent, discounts on renters' insurance, complementary moving vans, and referral bonuses. This strategy is seen as a response to the challenging economic climate and the rising cost of living, providing an opportunity for renters to negotiate better terms.
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Impact of Housing Market Conditions on Rental Dynamics: The article touches upon the cooling of the hot housing market, indicating that individuals who were previously priced out may now have the chance to pursue homeownership. However, it emphasizes that empty apartments can pose challenges for property owners in terms of generating income. To mitigate vacancies, landlords are expected to offer incentives and perks to attract tenants.
In conclusion, the insights provided by Jeni Bartiromo, based on interviews with real estate professionals, offer a comprehensive overview of the current rental market dynamics, emphasizing the challenges and potential opportunities for renters in the coming year.
