Incomes of dwellers in apartment properties are increasing thanks in part to factors such as the economic recovery and residents preferring to pay more for amenities than a mortgage. Pictured here is Kennedy Wilson’s Bella Vista apartments in Richmond.
Blanca Torres
Reporter- San Francisco Business Times
Average apartment renters are getting richer. A recent survey conducted by Kingsley Associates, a real estate research firm, found that average income of renters nationwide has increased significantly since 2010.
Check out the numbers:
2012: 76.5 percent of residents surveyed earn more than $40,000 per year. 41.2 percent earn more than $75,000 per year.
2010: 65.2 percent of renters earned more than $40,000 per year. Only 26.2 earned more than $75,000 per year.
Apartment rental rates are rising throughout the country and especially so in the Bay Area, where many cities have seen double-digit percentage rent growth in the past few years.
Rents rocketing, “has led to recruitment of higher-income residents, who apparently consider renting a better housing solution than they did a few years ago,” John Falco, principal at Kingsley Associates.
That’s an interesting correlation. Raising the cost of a product or service means you will attract a higher income consumer?
Or, is it the other way around where renters have more money and therefore are willing to pay more in rent? Or could it be that competition for apartments is more intense and therefore, renters have to pay more to get the best units?
Kingsley also points out that today’s renters are less sensitive to price and are less interested in buying homes. In fact, in most markets in the country, only 57.5 percent said they planned to renew their lease — a three-year low for survey respondents.
“With the notable exception of San Francisco, renewal intent is lower in every major market than it was a year ago,” a statement from Kingsley reads. “Residents may be content to rent, but they also appear to be pickier about things like location, amenities and management.”
Kingsley surveys approximately 1.5 million apartment units annually. The findings are based on survey responses received between Oct. 1, 2011 and Sept. 30, 2012.
Blanca Torres covers East Bay real estate for the San Francisco Business Times.
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Article source: http://www.bizjournals.com/sanfrancisco/blog/real-estate/2012/11/apartment-renters-getting-richer.html