As apartment occupant rates have fallen 1.6% in the first quarter of 2008, so have the rental prices. The shadow market--sellers renting their property instead of selling--has begun to restore affordability to the Tampa-St. Petersburg rental market.
From 2005-2007, the Bay Areas 10,000 plus condo conversions led to apartment renters being confronted with higher prices and limited available units. As the cost of living went up, employment wages remained the same.
Many did not prosper during the “housing boom.” Now, with the growth of the shadow market rental prices have begun to drop in the Bay Area as the competition in the market continues to increase. With this healthy competition have come problems with individuals turning into “overnight landlords.” Many property managers and realtors believe the market will get better as these landlords leave the market.
Rather than pushing “overnight landlords” out of the market, property services need to be created to support new landlords. “Overnight landlords” are not competition for the property management industry. In fact, these new landlords introduce the real estate industry to the needs of the independent property owner post the “housing boom.” As the real estate industry begins to respond to these owners’ current needs, the competition within the management, leasing industry will decrease and the market will stabilize.
In the meantime, healthy rental market competition increases housing quality and decreases rental prices for many Bay Area renters.
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