Rents Are Going Up, Suckas
For the first time since 2001, there are not enough rental units in America to meet demand. Can you guess what this means?
If you said "It means that the financial firms that bought up all the unwanted housing after the 2008 crash will now be taking their just rewards out of your pocket," you win! The prize is a cramped studio apartment in a poor location with a rent that is shockingly high. And you'll take it! Bloomberg reports:
"It's that supply-demand equation that allows us to get aggressive about raising rents," Stephen Schmitz, chief executive officer of American Residential Properties Inc. (ARPI), a landlord with more than 8,500 homes, said at an investor conference this month. "Three years ago, you would go to raise somebody's rent and they could say, 'I'll go down the street and pay $100 less than I'm paying you now.' But today they can't because all those houses down the street are occupied."
Vacancies are low; housing supplies are limited; now you pay. This is in fact exactly how free market housing is supposed to work, so if you don't like it, just build your own apartment tower, and stop complaining.
Meanwhile in New York City a Manhattan condo with a block-long terrace can be had for only $39 million. You can have that, or the cramped studio ($38 million).
[Pic via Trulia]