The average apartment rent increase in Chandler last year ranked the seventh highest in the nation among the country’s top 100 markets, a new study says.
Rent for a one-bedroom apartment increased 12.7 percent to an average $1,157 while the national average increase was 4.2 percent and the average rent nationally was $1,140, according to the study by apartmentguide.com.
Scottsdale was the only other Arizona city to make the top 10 list of the highest rent increases in the country last year. Rent there increased on average 12.7 percent – the ninth highest nationally – to $1,157, apartmentguide.com said.
Those increases in both cities occurred at a time when the overall cost of living in both Chandler and Scottsdale decreased 2.6 percent, apartmentguide.com said. In terms of cost of living, only utilities showed a marked rise in 2018 – up by 10.2 percent – while transportation costs increased a fraction of 1 percent.
But the report said one of the major factors pushing the increases in those two cities is Arizona’s continuing attractiveness to Americans who want to relocate.
“For more than a decade,” it said, “Arizona has been a top-10 state for Americans choosing to relocate, and its status as the number two most popular state in 2018 after Idaho helps explain the presence of Chandler and Scottsdale on our list of cities with the largest hikes in rent.”
Meanwhile, Mesa rents rose an average 5.9 percent for a one-bedroom apartment to $888 and increased 4.4 percent to $1,098 in Gilbert, according to the study.
Of all the 100 markets studied, the biggest year-over-year rent increase was in Newark, New Jersey, where the average rent for a one-bedroom hit $1,692 a month and the overall cost of living soared 24.3 percent. New Orleans showed the biggest decrease – 11.4 percent to $1,418 – while its cost of living dipped a mere .7 percent.
The increases in rent in the East Valley come at a time when housing affordability remains an issue Valley-wide and in many major metropolitan areas across the county.
The apartmentguide.com report said available rental units declined last year nationally from 7.5 percent to 7.1 percent.
Marcus & Millichap, a national commercial real estate firm, said most of the new apartment development “largely caters to more affluent renters.”
As a result, it said, “The most affordable segment of the market, Class C apartments, faces strong demand and vacancy for these rentals is expected to tighten to 3.9 percent, its lowest year-end level in 19 years.”
Also nationwide, new home construction is falling while fewer existing homes are up for sale.
“The question is no longer if the nation is in the throes of a housing slowdown, but rather how deep and wide it will wind up being – and how much of a blow it’ll deliver to the American real estate market,” Realtor.com said last week.
“The signs are becoming ever more troubling. The number of existing home sales has dropped to the lowest level in three years, price growth has slowed precipitously, and some super-pricey, bellwether cities are actually seeing prices fall.
The fact that home growth has slowed in 70 percent of the United States’ 200 largest housing markets has economists debating whether the housing slowdown is the canary in the coal mine, warning of economic woes to come,” it added.
The Cromfort Report, which closely monitors home sales in the Phoenix Metro area, recently stated that the availability of existing homes on the market remains an issue.
“Supply remains weak because many existing homeowners are more reluctant to move,” it said. “Doing so would require them to give up their existing cheap loan and take out a new more expensive one. They are tending to stay put.”