Don't expect any quarter from the rental sector.
As hundreds of thousands of homeowners enter some stage of foreclosure each month, it's not surprising rents are up in each of the 32 Metropolitan Statistical Areas (MSA) tracked by Novato, CA-based RealFacts.
From the Orlando-Kissimmee, FL, MSA, where rents were flat but considered up slightly from a year ago, to the 11.9 percent year-to-year increase in Silicon Valley, homeowners are trading in the centerpiece of the American Dream for an apartment, according to RealFacts' third quarter 2007 numbers.
The trend is squeezing the supply and that's pushing up rents.
RealFacts keeps tabs on more than 12,000 rental communities of 100 units or more in MSAs in 15 states, most of them west of the Mississippi River, but also in Florida and Illinois. The firm also keeps tabs on rental units by category, from studios, one-, two- and three-bedroom apartments to three- and four-bedroom town homes.
Only average, rents in Los Angeles, at $1,630 a month, were the only location with higher rents than the hot San Jose-Sunnyvale-Santa Clara MSA (Silicon Valley) market, where rents averaged $1,622 in the third quarter.
The other high-rent districts were San Francisco-Oakland-Fremont, at $1,551 a month; Oxnard-Thousand Oaks-Ventura, at $1,548; San Diego-Carlsbad-San Marcos, $1,363; Miami-Ft Lauderdale-Miami Beach, $1,224; Riverside-San Bernardino-Ontario, $1,159; Vallejo-Fairfield, $1,141 and Seattle-Tacoma-Bellevue, where the average rent in the third quarter was $1,057.
Revealing current market pressures, quarter-to-quarter rent increases were up 4.1 percent in Salt Lake City and 3.3 percent for both the San Francisco and San Jose MSAs, according to RealFacts.
The increases translate to monthly average rent increases of $30, $49, and $52 respectively.
At the current pace, Salt Lake City will see a 16.4 percent annual rent growth, while San Francisco and San Jose will both post a 13.2 rental growth rate.
Home price growth in owner-occupied housing has stopped or slid in many markets, but home prices, still packed with nearly a decade of appreciation, remain unaffordable for many, especially those who can't find financing in the current hard money market.
Revealing swarming tenant demand, occupancy rates were at or above 95 percent for one third of the MSAs in the data base, with all MSAs reporting occupancy rates of 90.5 or more.
Salt Lake City posted the strongest occupancy of any MSA at 97.2 percent, followed by San Jose at 96.4 percent, Fresno at 96.2 percent, San Francisco at 96 percent, both the Boise City-Nampa MSA and the San Diego MSA at 95.7 percent and Tulsa, OK at 95.6 percent.
The worst news in the rental market was year-over-year occupancy rate declines in the third quarter involving 24 MSAs.
Leading the losses were Orlando and Phoenix, both down more than 4 percent, with three other MSAs recording losses of over 3 percent.
It wasn't enough, however, to keep rents from rising.