I’ve been talking about rising rents and the lack of single family homes available for rent for months. Now it appears the same thing is poised to happen to apartment dwellers. Apartment occupancy are at a staggering 98% according to the IBR. The Treasure Valley has approximately 20,000 units which currently rent for significantly less than other metropolitan areas. As with everything when demand raises so will the price.
There are many reasons for the uptick in the rental market. Families displaced due to foreclosure (from their own homes and homes they have rented). Lending requirements remain stringent, not to mention that the 100% loan product has practically disappeared and the need for actual cash on hand to purchase a home remains the new norm. A large population of young adults in the area also adds to the demand for rentals (think BSU). Contributing to the shortage is the slowdown in construction. Only 8 building permits have been filed in Boise this year for multi-family units.
Investors want a return on their investment and right now, due to the lower rents collected in this area, investors are shying away but I think that will be changing. I think we have a large pool of renters that will remain renters for a very long time to come.