Most expensive rental markets
Another bad news is in store for customers who want to buy or rent a home in cities such as New York, San Francisco and Manhattan. According to a report published by a private real estate firm, during the past three years rental values have risen by 14 percent, which is way above the inflation rate.
Marcus and Millichap, a California based real estate investment broker firm, had conducted a broad survey on real estate properties and their rental values in 52 major rental markets of America. Based on the survey findings, they predicted that the house rents would increase every year. As on date, New York City is the most expensive with the highest rental values and is closely followed by San Francisco city. The average monthly rent for an apartment in New York City is estimated to be $2,553 and $1,685 in San Francisco.
Marcus and Millichap also predicted that this scenario of escalating rental values is not going to change even in 2007. The firm believes that the rates would go up by 6.5 percent in New York City alone and by 4.3 percent through out the U.S.
The most probable reason for the steep rise in rental prices could be the decrease in number of potential buyers. This has resulted in a decline in real estate sales. Another probable reason for the sudden boom in rental values in these areas could be the strong economy, which has given rise to multiple job opportunities. Influx of people is accompanied by a corresponding increase in demand for rental accommodation since most of the work force is not interested in purchase of houses. With increase in demand, prices shoot up.
Commercial Real Estate News
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