Hot markets are still going to be hot in 2016, but rents won’t rise as quickly as they have been
By Jeff Sorg, OnlineEd Blog
(January 25, 2016) – Zillow® is predicting that rent appreciation will level off in 2016, slowing to an annual rate of just 1.1 percent by December 2016. The national Zillow Rent Index at the end of 2016 is projected to be $1,396 — compared to $1,381 in December 2015.
Even with the slowdown, rents will remain unaffordable in many of the major markets across the U.S., especially on the West Coast. Renters in San Francisco and Los Angeles can expect to spend 40 percent of their income on a rental payment.
“Hot markets are still going to be hot in 2016, but rents won’t rise as quickly as they have been,” said Zillow Chief Economist Dr. Svenja Gudell. “The slowdown in rental appreciation will provide some relief for renters who’ve been seeing their rents rise dramatically every single year for the past few years. However, the situation remains tough on the ground: rents are still rising and renters are struggling to keep up.”
- Zillow expects rental appreciation to slow down most significantly in Nashville, Tenn., San Francisco, Portland, Ore. and Denver.
- Rents in San Francisco saw 12.5 percent appreciation in 2015. Zillow forecasts rent in San Francisco will grow half as fast in 2016 — 5.9 percent.
- The slowdown in rental appreciation indicates that supply of new multi-family homes is catching up to demand.
- Substantial new housing supply is becoming available in Atlanta, Denver, Portland, Seattle, and other markets.
Zillow is a registered trademark of Zillow, Inc.
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Jeff Sorg, an Oregon licensed Principal Broker, is a co-founder of OnlineEd®, a Web-based vocational school founded in 1997 where he also serves as Corporate Secretary, Chief Operating Officer, and School Director. Sorg holds vocational instructor licenses for real estate education in Oregon, Washington, California, Flordia, and Nevada and has authored numerous pre-licensing and continuing education courses in those states. Sorg holds the International Distance Education Certification Center’s CDEi Designation for distance education, originally awarded in 2008.
OnlineEd® provides real estate, mortgage broker, insurance, and contractor pre-license, post-license, continuing education, career enhancement, and professional development and designation courses over the Internet.