After years of tremendous rent growth, an incoming glut of luxury apartments will likely force more landlords to cut prices and offer concessions this year.
In 2016, rents in the U.S. climbed 3.8 percent, a modest increase compared to the 5.6 percent jump seen in the third quarter of 2015, according to a new report by MPF Research. This lackluster increase follows the more than 26 percent increase in U.S. apartment rents seen since early 2010, the Wall Street Journal reported.
The reason for the slowdown, MPF Vice President Jay Parsons told the Journal, is the deluge of high-end apartments that are coming onto the market.
The number of new luxury apartments seems to be outpacing the number of prospective renters. The New York area will see roughly 30,000 new apartments this year — double the historical average. About 85 percent of the apartments will be luxury units. Across the country, more than 378,000 apartments are expected to be completed in 2017. Developers in New York are already offering three months of free rent in some new projects and are expected to continue offering significant concessions. [WSJ] — Kathryn Brenzel