Rents Are Down A Little Bit

[Josh Young]

We always have seasonality with rent prices coming down in the fall, but it feels like a little more than normal this year. Last year and the year before the condo and multi-family rents came down a little and I attributed that to added supply, but now I’m starting to see it in single family homes. I have a house in Gilbert that I rented out for $2400 in June of ‘24 and I just rented it out for $2300 this week. It’s a little surprising to me since sales volumes are down over the past couple years because more people are choosing/having to rent and we don’t have a large supply of new homes being built in this part of north Gilbert.

I read an article today that rent declines are a current national trend, so it could just be part of a bigger economic slowdown, I guess we are due after so many years of outsized rent increases. This should also show up in the CPI at some point since the owner’s equivalent rent is such a large weight in the CPI. It could actually turn the CPI negative or at least below 2% which should really encourage lower interest rates and maybe even quantitative easing which would really make financing a lot easier.

Is anyone else seeing this as well? Looking forward to seeing your thoughts..

[Bruce Lynn]

In North Texas, I'm seeing rents stay flat. Seems like more and more investors and a TON of apartments still trying to lease up for the 1st time.  Some of those apartments are giving 2-4 months free rent with 14-24 month lease.  That hurts and is hard for an individual small single family owner to compete with.

Most of the new apartment construction is ending now and as soon as those get leased up, I expect we'll be in better shape for rent increases maybe into the spring and summer.

I'm suggesting to all my rental owners to do everything they can to keep the current tenants happy.  Don't let them move.  Minimal or NO rent increase this year.  Gift baskets or gift cards for the holidays.  Go do a landscaping touch up, or something to improve the value.