The Cleveland Fed reports that rents are already starting to climb.
Rents are starting to accelerate. Rent of primary residence rose 3.1 percent in December, and has risen 3.5 percent over the past six months. Owners’ equivalent rent (OER) rose 2.2 percent in December and is up 2.3 percent over the past six months. Interestingly, all but one of the regional OER components we use to compute the median CPI posted an increase near 3.0 percent in December (the median component was OER: Midwest, which rose 2.9 percent).Rents are really soaring in New York and San Francisco, where Bernanke's money printing enters the system (Via Wall Street and Silicon Valley).
You can get a great studio apartment in San Francisco for just $3,000.
Here's a great two bedroom in NYC for just $4995.
SF and NYC have other problems including rent controls, which distort the market, but rents are now at record highs, which means that Bennie's money is, indeed, flowing.
Just to think that I was paying $1600 a month for a 3-bedroom house in San Diego in 2006. 3 grand for a studio in San Fran? That's insane!
ReplyDeleteRent in my building climbed 13% from 2010 through 2011. My broker tells me this was pretty typical. Fortunately, I didn't get hit with it last year; however, I'll probably get dinged when my lease runs out.
ReplyDeleteI live in NYC. I signed a lease last February for a studio in the East Village at $1550 a month. My landlord is increasing my rent to $1700 this February (9.67% increase yoy). I am pushing back hard, but she told me to look at the market... it is apparently a fair increase. All my friends have faced similar increases of 10-15%. I am lucky that February is the slowest month of the year... My landlord said it would be $1750 if I waited till summer to sign!
ReplyDeleteFor a while in NYC rents and selling prices of condos and brownstones have been decreasing. But there seems to be a building boom again.
ReplyDeleteWhat can people do to prepare for the inevitable crash of this boom?
What triggered the flow of "Bernanke dollars" into the housing market again?
There aren't many apartments on rent control to distort the market in a big way. I don't think rent control affects the housing market much in NYC.
Prices are going trough the roof in Europe as well. As of this year, my rent has gone up 10% (and will likely go even higher before summer). But that's the least of my worries. My last month utilities were up 22.4% from a year ago... and the average temperature in Dec 2011 was about 35 degrees Fahrenheit. But the average temperatures in Dec 2010 was 20 degrees F. That's a 22.4% increase in utility prices with a much warmer month!!
ReplyDeleteIn a few days we'll have -4 degrees F. Last year we had over 40 days in a row with temperatures way below freezing. We had weeks of -20 degree days. How much would I pay for utilities this year, if that kind of cold would return?!
Speaking of prices, gas prices are up yet again. A gallon of gas now costs $6.59 per gallon over here. It now takes 100+ euros for me to get a tank of gas.
Another interesting fact about the f$#%£d up life in Europe.
ReplyDeleteHow large were the utilities in Dec 2011? They were 62% of my rent.
If I would pay $3000 per month for a studio apartment here, my actual cost would be: 3000 (initial rent) + 1860 (utilities) = $4860 per month.