Fifty-two weeks ago, we started tracking the number of homes listed for rent in 14 different downtown-area ZIP codes. (Every Friday, using the “rental” filter in Coldwell Banker‘s Quick Search, we pull up the number of listings for 60601, 60602, 60603, 60604, 60605, 60606, 60607, 60608, 60610, 60611, 60616, 60622, 60654, and 60661, and record them in a Google Docs spreadsheet.
The chart above is the week-by-week trend line for total listings in all 14 ZIP codes. On the Friday after Thanksgiving, 2009, 1,979 homes were listed for rent. That number decreased gradually throughout the first half of 2010, moving to as low as 1,286 listings at one point. Inventory spiked, passing the 1,600-home mark in the first week of August, then plunged to a year-long low of 1,043 homes listed. As of this morning, 1,316 homes were listed for rent.
Realize that these are units designated as rentals on the MLS — these units, for the most part, are individually owned homes in condo buildings or townhome developments, or in cases of ZIP codes outside the core of the city, single-family homes. A few dedicated apartment buildings have units listed on the MLS, but most don’t — for example, Alta at K Station had 357 unleased units going into October, but the development has no presence on the MLS right now outside of one listing for its commercial space. We don’t attempt to track rental listings on Craigslist, Domu, Apartments.com, Rent.com, or on specific development or property management websites.
If you list your condo unit for rent on the MLS, it probably means you are dissatisfied with your unit in some way – you want to move, but don’t want to sell. The year started at 1,900 units and ended with 1,300 units available. At the very least, you can say that fewer unit owners are dissatisfied—they have either found renters, sold, or decided to stay put. It is probably good news for the typical downtown unit owner that fewer of his neighbors are trying to let their units out.
It probably (but not definitely) means that more people are moving downtown to fill these vacancies—probably renters who are now able to afford to live in a high rise, or people who had been looking to buy units but now find they can have the condo lifestyle without the burdens of owning.
The downtown owners who want to move but don’t want to sell (or the developers who retain units as rentals) have caused a fair amount of upheaval in the rental market by making a luxury downtown unit within reach to someone who would otherwise rent in the neighborhoods. I would guess that it’s a multi-year process for the market to settle back down. I would guess that a lot of apartment building owners would be grateful to see this listing inventory head down to a sustainable level.
As for the spike in August: this is begging you to conclude that the most popular day to rent an apartment is August 1, which is logical because of the start of the school year — people tend to move over summer and settle in before school starts in late August.
But downtown? I have a hard time believing the downtown condo market is this affected by the school calendar.
In three weeks, you had 200 listings put on the market and then in a single week, a similar number were withdrawn (we don’t know that they were let out; we just know they were withdrawn). Could this have been a single building? A gimmick?
It doesn’t really cost much to put a listing out there, so you are somewhat at the mercy of the people who post listings. Their concern is getting commissions and/or attention, not protecting the integrity of data. So I would not read anything into the August spike unless I could make certain it wasn’t an anomaly.