Slow Housing Market Helps Keep Rental Rates Competitive - Spokane, North Idaho News & Weather KHQ.com

Slow Housing Market Helps Keep Rental Rates Competitive

SPOKANE, Wash. - You've probably seen one near your home: a For Rent sign. They seem to be popping up all over Spokane. But as it turns out, KHQ Local News found the supply of rental properties is tightening as Spokane sees an influx of renters.

According to the Inland Empire Rental Association, there are three times as many rental applications this year than there were just one year ago. No coincidence, vacancy rates dropped from more than seven percent last year to just five percent this year.

Rental Owner, Robert Gilles, who's been leasing and renting property for more than 40 years explained, "I wouldn't call it a landlord's market but compared to what's happened in the economy the last four five years, it's probably the best place to be."

The Spokane market is shifting to one that would seem to favor the landlord, creating ripe conditions to raise the rent. In Emily Norton's case, that's exactly what happened.

"It seems like rent expenses are going up while quality of the rentals may be going down to some degree," she said.

Norton said her rent increased between $100-$150 in the last couple of years. She explained that her previous landlord raised rent so high, without making fixes she said, that she moved out and into a new neighborhood in North Spokane.

Norton's not the only forking over higher rent payments.

Studies from the Washington Center for Real Estate Research (WCRER), based out of Washington State University in Pullman, show the average price of rent in Spokane went up seven percent in 2011. That amounts to about $50 per month, per renter.

But many landlords felt raised rental rates, like those Norton experienced, were more of the exception than the rule.

Gilles, who owns a 48-unit condo complex on west 6th, said he does not plan to raise rates.

"There's some in certain smaller niches, (where) there's been a little bit of a raise but, in general, they've held which, given what's happened in the economy the last four to five years is kind of a miracle I think," Gilles said.

Several realtors said rental rates have held in large part because of sinking home prices due in part to Spokane's 24 percent foreclosure rate and high rate of short sales. Consider these numbers from the Spokane Association of Realtors: the average price of a home is down seven percent from last year which amounts to $166,656. Also, the number of houses sold last month, 382, was the lowest it's been since the late 1980's.

Rob Higgins, Executive Vice President of Spokane's Association of Realtors said, "I don't know if we're quite at rock bottom yet. I hope we've hit rock bottom but I've been saying that for three years now."

In short, several realtors said this double-whammy in the housing market helps keep rental rates competitive.

"That makes sense," Higgins continued. "When it's hard to buy a house because of the economy people who would be buying the houses are renting instead."

Indeed, Norton said she's waiting to pay off debts and save up more money to buy her first home. But even if some renters have to pay a little more for rent in Spokane this year, many have said they are long happy to sidestep the drama homeowners have suffered in the roller-coaster housing market to opt for the rent sign instead.

If you're renting and want to stay awhile, the best bet is to lock in a multi-year lease at a low rent.

On the flip side, if you're looking for a home, any realtor will tell you this is the best time to buy.

RESOURCES:

For a look at the state's housing and apartment market snapshot as well as a survey of recent buyers and sellers in Washington visit:

Washington Center for Real Estate Research http://www.wcrer.wsu.edu/

Spokane Association of Realtors http://www.spokanerealtor.com/

Inland Empire Rental Association http://www.landlordassoc.org/property_mgmt.htm

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