In Seattle at least, I know that the rental market was being seriously squeezed in the years leading up to the housing crash. I had several friends who were kicked out of their rental apartments because the building was converting to condos for sale. This was the case all across the city - at one point I read that 80% of Seattle's rental units had been converted to condos, but I don't know if that number was accurate. (How could they know?)
I realized that the market had lost its mind when my friend C had to move. He lived in one of the worst apartment buildings in Seattle, in one of the worst neighborhoods off north Aurora. People were regularly shot in his neighborhood, which was patrolled by prostitutes and drug dealers. The one time I visited his place, I lost count of the number of condoms, tiny baggies, and hypodermic needles I saw scattered around.
The apartments themselves were plagued by every pest available, including ants, mold, roaches, mice, and the occasional rat. And yet, the building's owner thought he could make bank by selling these little slices of paradise to starry eyed new home buyers. (He was probably right, at least in the short term.)
At the same time, there was a huge boom in condo buildings being constructed on the tiniest or most preposterous lots. All kinds of things were torn down to make room for condos. (Including one of my favorite burger restaurants, RIP Daly's Drive-In.) Seattle was CONDO CRAZY and who could look at the metaphorical landscape and NOT see what was coming next?
Rents skyrocketed as the pool of renters was squeezed into a successively smaller collection of apartments. Lucky me, I ended up having to look for a place to rent at the height of the madness. I missed out on three places by literally ten minutes each, someone else having rushed in and scooped me right before I got there. (I think a few of them paid their non-refundable deposits in cash, and I use the term "non-refundable deposit" loosely.)
So now that the housing market is collapsing, all those people who bought places are looking for rentals. But at the same time, the market is completely flooded with condos which could convert to rentals with a wave of the pen. And people are losing their jobs and moving away to cheaper areas in droves. So what's happening with the rental market?
I found my answer in an unlikely place, forming the foundation for an article in a local Las Vegas newspaper. The reporter dug out a report from a national operation released in December, which shows that rental prices are dropping across the board.
If you scroll to the bottom of the article, they include a table of major cities and their rent statistics. I can't help but notice that Seattle has both one of the highest occupancy rates (92.2% which means that only 7.8% of Seattle's apartments are vacant at any given time) and one of the highest drops in rent (down 11.1%).
Creative Commons-licensed picture courtesy of Flickr user extremeezine