Because of the foreclosures and tight loan market, logic tells me that rents have probably skyrocketed in the past six months or so. Is this “common sense” of mine at all tied to reality? What’s it like in your area?
I would not say sky rocketed. But yes they are up.
We were able to raise the rents on LV approx $15 a month.
In SJ the house prices have come down and rents have gone up. It is now possable to purchase a house with 20% down and have it neutral cash flow.
I can’t speak to residential rents, but I can for commercial leases. My office lease expires the end of January, so we, for the last five months, have been in multiple negotiations for space.
Our current landlord has not only pledged to lower our rent by $5 per square foot per month on our 8000 sq/ft office if we renew for another five years (we’re completing our second five-year stint), but is also willing to do additional construction, at no cost to us, to net us space for 10 additional employees (we’ve outgrown the space).
Management of a different property is now offering to move our entire office, including furniture and equipment for no charge, lower the initial rent offer by $2 per sq/ft, give us the first year at half rent if we commit to five years, and a $210,000 work letter for office build-out construction.
We’ve also been inundated with space offers from other buildings, all with special deals.
When we first started down the road of deciding whether to move or stay back in July, there were no deals. The rent was the rent, take it or leave it. Our current landlord initially raised our rent by $3 per sq/ft. A lot has happened since then.
So, to answer your question, at least in the commercial space market, no, rents have not gone up, they’ve gone down, way down. Commercial property managers are in a panic because there’s more available commercial space now than I believe I’ve ever seen.
I lease and sell commercial real estate. There has been price compression across the board in both sales and leases.