Rents are up again in June, according to various reports released last week. But the severity of the situation varies, depending on which report you read.
Numbers released in the National Apartment Report by Abodo.com show median rents for one-bedroom apartments in Dallas rose 5.12 percent since last month. Five percent in a month! That’s the seventh highest rent increase for a metro area in the country. But their data comes strictly from their own listings, which may be the grain of salt we need to take with this. Private listings tend to feature more luxury apartments, which skews the rental data toward costlier properties.
Now, the Dallas Rent Report issued by ApartmentList.com shows rent growth in Dallas as quite a bit more moderate, with month-over-month growth at .6 percent, and year-over-year at 3.2 percent. Methodology for the Apartment List report cites median rent statistics from the Census Bureau as a means of tempering private listing information. This seems to provide some balance. But the trend is clear. Rents continue to rise at rates that outpace income growth, although Dallas is still more affordable than many metro areas.
Price Increases in Suburbs Outpace Cities
Another trend raising concerns for housing affordability is the steepening rise in suburban rents. According to a recent report by Zillow.com, rents in suburbia are now rising faster than in urban areas – for the first time in nearly half a decade.
“Because walkable urban centers close to amenities are typically a big draw for renters, you’d expect rents to rise faster in the city than in the suburbs—which is exactly what we’ve been seeing until very recently,” says Dr. Svenja Gudell, chief economist at Zillow, “but a handful of factors are helping turn the tables and beginning to push suburban rents up at a higher clip. These include deteriorating rental affordability in expensive urban cores; new apartments, albeit high-end ones, opening downtown compared to relatively few in outlying areas; and preferences among some renters toward the space offered by single-family homes in the suburbs.”
The Zillow report also points out that as long as affordability for buyers remains such a challenge, the demand for rental properties, and thus rental prices, will rise.
The good news is that for Dallas, rent hikes seem tempered compared to other major U.S. cities. According to ApartmentList.com, Dallas rents remain some of the most affordable in the nation with Dallas’ median two-bedroom rent of $1,090 falling below the national average of $1,150. By comparison, a median two-bedroom apartment in San Francisco rents for $3,020, more than twice that of a two-bedroom apartment in Dallas. For now, anyway.