If you know me, I've probably told you about a shooting, robbery, or drug bust that has happened outside my home. Hearing all the buzz about this being a "renters' market," and that rental prices are plummeting, we thought this would be a perfect time to migrate to greener pastures. It's true. The vacancies are everywhere. If you drive through the thickest parts of Koreatown in Los Angeles you will see "FOR RENT" signs on almost every building. But don't be mistaken. Landlords are not handing them out like free samples at Costco.
If you are a family of three: Mom, Dad, and rambunctious 3-year-old baby girl, beware. For most landlords, this means wear-and-tear. Throw a cat in the mix and you are surely out of the running. If you are self-employed, be prepared to be put through the wringer. They will ask you for everything from bank account statements to returned checks for rental payments. If you work in the construction business, which we all know has tanked due to the failed economy, forget about it. They don't want you. Because of all the odds stacked against you, be prepared to submit numerous applications and pay at least $25 each time to do so. And one last thing, your credit report better be immaculate because, to landlords, pulling your credit is the body cavity search of their screening process. Unfortunately, for our family, this is not a hypothetical. This is us and finding an apartment has been far from easy.
According to a study by REIS, vacancies in the US have risen to 8% this past quarter. That's the highest that this country has seen in 30 years. [3] It would be logical to think that these vacancies would be filled by all the people who lost their homes recently. Instead it seems that people are moving back in with their parents or getting roommates. Given these circumstances, landlords should be bending over backwards to fill their vacancies, but this is not the case.
What reports overlook are renters who have been hit hardest by the economy. Whether they see this an opportunity to leave a bad neighborhood or have failed to make the rent one too many times, it is this demographic that is struggling to find a place they can call home. If they can land an apartment, they lack the leverage to negotiate sweet lease deals with months of free rent and waived security deposit--on approved credit, of course. More than likely, these are families, struggling to make ends meet, dealing with unemployment or underemployment, and have bad credit. It seems that the only options for this sector of the market are to live in neighborhoods that are unsafe in apartments with sagging ceilings and outdated plumbing. Only in these substandard conditions is there little scrutiny.
So back to my original question: Who is filling these vacancies? No one. In our search, we found that one bedroom units renting within the $1,200 range with hardwood floors, new appliances, and located in a relatively safe neighborhood are still on the market. Landlords of well-maintained, decent properties, seem to be willing to let these units remain vacant until they find that perfect single white female who works in downtown and doesn't plan to ever have children. Cats OK.
[1] EDD (December 18, 2009) "LOS ANGELES-LONG BEACH-GLENDALE METROPOLITAN DIVISION (LOS ANGELES COUNTY)." Press Release. Archive copy at EDD.
[2] Bureau of Labor Statistics (January 10, 2010) "Employment Situation Summary." Press Release. Archive copy at BLS
[3] Kai Ryssdal, January 7, 2010, "Why Apartment Vacancies Are Rising." Marketplace.
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