Are rental prices seasonal?

May 27, 2007 2:14 AM

Are apartment rental prices seasonal? Is summer the expensive season? I am in downtown Seattle, but I guess experience from any large American city helps...

The contract where I currently live expired, and they want to renew for a year (previous contract was 6 months). Since I was already planning to rent something alone 6 months from now, I decided to not renew and move now. Since this decision was rather sudden, me and my roommate are staying in the current place for a few more time (he needs time to find a new roommate to stay here, I'm too busy right now and would rather move in a few weeks)

However, I'm worried that in 2 months rental prices could rise (which, given I'll probably get a 12-month contract, could mean quite an accumulated sum). How much should I expect prices (which 3 weeks ago, for the kind of place I'm looking for, were on the $1200 range) to rise until mid-July? Given my current month-to-month rate is acceptable (and lower than that), should I wait until Fall (or whatever the best time to rent is)? Or should I make an effort to move right now, before prices rise?

posted by qvantamon to Home & Garden (4 answers total)

Generally speaking, there isn't a great deal of seasonal price adjustment in rental housing and residential apartments, in most major American cities. That is because such places are typically leased for relatively long periods, typically a year, and so rental demand and supply of units to meet it, both average out over time. But there are exceptions.

In Boston, a relatively small city, where there are a large number of students relative to the general population, due to the many colleges and universities, there is an element of seasonality that you don't find in other markets. Professors and students leaving for the summer create a very depressed summer season for rental housing in Boston, and if you can sub-let a place for only a couple of months in the summer, you can generally find pretty good deals. But come September, you'll be moving out of that sub-let, and competing with thousands of returning students and faculty. Good luck renting an apartment in Boston in August or September!

In resort areas, where rental housing terms may be short, and there may be intense seasonal demand, rental prices do have a heavy seasonal component. Renting accomodations in Vail, CO during ski season will typically cost you more than during summer season, simply because demand is much higher during ski season, and so the market supports the seasonal variation. Same for short term rentals of beach front condos in Florida resorts during the winter. But these are exceptions to the real residential market, as these price situations are created by seasonal demands, and met by short term rental solutions, where price is heavily influenced by demand, and both landlords and renters understand the seasonal dynamic, and the needs for short rental terms, and for prices that support low occupancy rates in the off season.

So I'd say, move when it suits you, without much worry that seasonal price fluctuations will be a major determinant in what you pay. Other factors such as convenience, amenities, security, and parking will be much more obvious factors in your rental pricing.
posted by paulsc at 4:20 AM on May 27, 2007 [1 favorite]

Summarizing the above, outside of vacation destination areas, no. However, apartment availabilty can be seasonal, especially near universities. Realtors say homeowners wait until Spring to sell, or buy, but I see people moving all the time (in the US, anyway).

Given your situation, I'd recommend staying in the month-to-month situation rather than signing a new lease... something unexpected can turn up at the last moment.
posted by Rash at 8:32 AM on May 27, 2007

My family has been in apartment management for 4 generations. Paulsc is right.

In the absence of rent control -- which Seattle does not have -- rents are controlled by supply and demand within certain constraints. When occupancy is over about 92-95%, owners pressure management companies and on-site managers to raise prices. When occupancy drops below, say 85% management companies get paranoid: usually they will offer move-in incentives (low deposits, "free rent", chance to win X, free toaster/tv/health club membership/etc.), often they will fire the manager (regardless of why occupancy is low), relatively rarely they will lower rents across the board. These rules are tossed if the owner is considering a rehab of the property, and tax rules are biased in favor of such major renovations to the property.

Ironically, altough summer is "leasing season" because most parents want to move between school years, I have been told that summer is a relatively slow time for real estate agents. That summer "leasing season" is good for you as a potential new resident because every apartment manager in town is looking to find new residents for her notices to vacate before they become vacants that effect her occupancy figures and left-to-lease numbers. Likewise, the leasing agents all want to maximize their commissions by leasing as many units as possible, even if she has to step on somebody else's throat to get them. Thus, summer is a time of increased leasing incentives and a potential bonus for you.

The only part of Seattle I can think of that might have a different seasonality pattern is the U District. Even so, there are plenty of grown-ups who live there and in neighboring parts of town like Wallingford that would blunt seasonality. Unlike many college towns (*cough*Urbana*cough*CollegeStation*cough*), there's a whole city around U-Dub!
posted by ilsa at 10:21 AM on May 27, 2007

Rent anywhere near colleges (these days, that pretty much applies to all large American cities) tends to dip during the in-between times, when the students aren't looking and the landlords just want the money. Might not apply to apartment complexes, but it applies to landlords who depend on rented-out rooms. Rent goes up towards the end and beginning of semesters/quarters/whatevers, due to demand.

I don't live in Seattle, but I'm willing to bet that the above rule applies. Signing a lease in summer would probably be of average price, with most people tripping around Europe or staying home with their parents. Rent will probably skyrocket towards the end of summer, as the student population moves back in.
posted by Xere at 2:45 AM on May 28, 2007