Plus, seven tips for renters
“The rental market is not something that you can divorce from the single-family home ownership market,” Doug Ressler, manager of business intelligence at Yardi Matrix, a national commercial real estate data and research firm, tells me. “Over the course of the last decade—really since the Great (Recession)—an inadequate supply of housing was built” throughout the United States. As the population has grown, demand for affordable housing, to own or rent, has exceeded supply. That pumps up prices and, often, decreases quality.
Meanwhile, U.S. mortgage rates are the highest they’ve been in two decades. (The Federal Reserve raised interest rates 11 times between 2022 and 2023 to try to counteract inflation.) As a result, people are forced to rent for longer. Older renters often want single-family homes or townhomes, but those are particularly hard to find.
In Charlotte, we have the same issues of limited inventory and people renting longer, but with a larger population of renters fighting for homes. Why do we have so many renters, anyway?
According to estimates by the Charlotte Regional Business Alliance, 113 people move to the Charlotte region every day, most for our plethora of jobs. “A lot of people prefer to rent in a new place before they decide where to put down roots,” says Dottie Ciarrocchi, a property manager and broker in charge at T.R. Lawing, a Charlotte-based property management company. According to Census data, Charlotte also has a low median age of 34.5, compared to the national median of 38.9; young people, Ciarrocchi observes, are more likely to rent. Also, Charlotte’s Unified Development Ordinance, which took effect last year, champions multifamily-housing development—including duplexes and triplexes on land previously zoned for single-family homes—in an attempt to increase density and affordability.
Ciarrocchi has noticed that renters now stay in one place for longer, causing less inventory turnover. “Before, people would often have a 12-month lease, then they may move out. … Now, we’re seeing people sign a lot more renewals, not only because it’s difficult to buy a home, but because renewals often come with smaller (rent) increases.”
Low inventory means the strong possibility of a denied application, even for applicants with good credit and steady income. Ciarrocchi says that in 2022 and 2023, when inventory was even lower than now, T.R. Lawing received multiple applications for every property: “You could easily have 20.” Today, she says, average- or low-priced properties, and properties in especially desirable neighborhoods, still receive multiple applications in a short time. Someone who meets all qualification criteria, like income and credit, can nevertheless lose out repeatedly.
Meanwhile, the quality of rental housing is decreasing. When inventory is high, renters have leverage to request updates to a property. But today, if one applicant wants a broken window fixed, an owner often has a queue of other applicants willing to pay the same amount despite the window.
More multifamily housing units are under construction in the U.S. than at any point since 1974. That might seem like the answer to Charlotte’s problems—that supply is catching up to demand. But it’s an illusion, Ressler says: Contractors have started a high number of projects, but supply chain delays and labor shortages delay their completion, so the number of finished units doesn’t meet demand.
Ressler and other experts who study the housing market anticipate that things will ease up a bit this year and next, but after that, it may become even more difficult to find a rental than it’s been the last several years. It’s hard to imagine. But two days after Herman and I visit Touch Me Not Lane, I get an automated text from the property management company informing me the house is no longer available—someone’s leased it, potential-blood-smudged walls and all.
Tips For Renters
When he’s not helping buy and sell homes, local real estate agent John Sterrett shows rental properties for management companies. Here’s his advice for renters:
1. Most properties require a minimum credit score between 600 and 650. If you don’t qualify for a property due to low credit, speak with someone at your bank to see if they can help you develop a plan to reduce or eliminate the items hurting your score. You can also try offering the property owner a larger security deposit.
2. Confirm all qualification criteria before you tour or apply for a property. No need to waste time or money on a place you aren’t likely to get.
3. Check the rental listing and application website for required documentation before applying. Be sure to attach all items to the application to speed up the process and secure the rental before someone else.
4. Once approved for a property, be prepared to sign a contract and pay the security deposit (usually the amount of one month’s rent) within two to three days.
5. If you want to request a change to a property, negotiate rent, or change lease terms, talk to the property manager or landlord ASAP. Make it clear whether your requests are deal-breakers. But understand that in a competitive market, there may be someone else equally qualified who’s willing to accept the property and terms as they are, so weigh the risks.
6. If your application is denied, ask the property manager or landlord why so you can address any possible issues before applying to another property.
7. Contact a real estate professional if you need additional assistance or are struggling to secure a rental.
Tess Allen
Source link
