Bidding wars send rent prices soaring as home sales decline
Looking for a new place to rent? Good luck!
Rents across the country are skyrocketing. According to Rent.com, they are up 86% since last year in Redmond, Washington, where the average monthly rent is now $4,222. The average rent in Glendale, California, is $4,472, up 36% from last year. In Pflugerville, Texas, a city near Austin, rent prices are up 126% year over year to $2,769 per month.
It's leading to battles for rentals.
Michael Citrin, a federal public defender, has been on the hunt for a place to rent in Los Angeles.
"I can't even tell you how many places I've applied for and been rejected from," Citrin said. "And I'm looking with two other professionals as well."
They tried to rent a three-bedroom bungalow in South Los Angeles for $4,100 per month, but someone outbid them by 10%.
"I'd never have expected that there'd be a bidding war for a 12-month lease," Citrin said. "There's a possibility that I don't find something in the next two weeks, and then I put my stuff in storage and stay on a friend's couch."
Realtor Blake Stargel listed a three-bedroom in Los Angeles for $4,700 per month. He said he got 50 inquiries in the first 24 hours.
"We had offers up to $5,500 on this property," he said.
Stargel said people are bidding so much over the asking price because of competition.
"Post-COVID, people who are working remote are now coming back," he said.
Rising mortgage rates are partly to blame, locking out would-be homebuyers. The average interest rate for a 30-year home mortgage is 5.6%, according to Bankrate.
"All of those things will put upward pressure on rents," said Jon Leckie, a Rent.com data journalist.