The Average Rental Rate for Smaller Apartments
Daily Real Estate News | Friday, July 01, 2016
New apartments hitting the market this year are 8 percent smaller than they were a decade ago, according to a new report by RentCafe, an online rental marketplace. But that doesn’t mean renters are paying any less for them: Rents for all apartments have jumped 7 percent in the last five years.
Where Apartment Market Is Headed
The square footage of all new apartments combined — including studios, one-bedrooms, and two-bedrooms — averaged 934 square feet. A decade ago, new units averaged 1,015 square feet. What’s more, the average rent in 2016 is $1,296; in 2011, rent averaged $977.
New studio apartments may be the most shy on space, having been downsized nearly 18 percent since 2006. The average size is now 504 square feet. One-bedroom apartments have shrunk by 5 percent, from 794 square feet 10 years ago to 752 square feet today. Two-bedroom apartments, however, have mostly held steady over the past 10 years, actually increasing 1 percent to 1,126 square feet.
“Developers have faced higher construction costs recently, especially in bigger cities, thanks in part to rising land costs and increased regulations,” CNNMoney reports. “Fitting more units in a building tends to bring a higher return on investment.”
Source: “Renters: You’re Paying More for Less Space,” CNNMoney (July 1, 2016)