West American rents increasing

In a turn that looks good for investor/renters, American's Western metropolitan areas see higher than normal demand for rentals, which helps increase rents above inflation levels.

News out of San Francisco shows that apartment rents are rising in the western portion of the United States. Real estate research firm RealFacts Inc provided a report that shows an increase in the demand and rents for apartments throughout 2007.

The most likely source of the increase is the drastic drop in homebuyers here last year. This may be due to tighter lending criteria in that individuals do not qualify to buy a home or it may be due to the number of people who do not want to take on such a mortgage.

In total, rents across the American West have increased in all 30 of the largest metropolitan markets. Most saw higher than inflation rises. Salt Lake City, the Bay Area and Seattle say rental price increases rise between 8 and 11 per cent, according to the RealFacts, Inc Survey out Thursday.

Smaller increases were seen in other Western cities, though nearly all saw significant rises.

The drop in housing values has hit the West hard, with some areas seeing more than a 10 per cent drop in the overall value of their homes. The subprime market and increased foreclosure rates have helped to create the demand for apartments and rental facilities here.

Lenders are not providing loans to those that may have shaky backgrounds or that may be considered subprime borrowers. This has increased the demand for apartments and housing throughout the region. In that comes the increase in rents due to the demand.

Some speculators also attest the rise in apartment rents to the number of home buyers waiting to see if they can get a better deal, as home prices drop throughout the region.

This could signal improved profits for rental owners. With other property fears to be concerned about, the increase in rentals can signal a turn in the investment methods here.