REGIONAL SPOTLIGHT: Northeast Markets Seeing Healthy Rent Growth

ALBANY, NY-Despite a stagnant housing market, rents for multifamily properties in New York State and throughout New England saw an uptick. In compiling the firm’s spring 2007 Northeast multifamily rental market report–its 14th such survey–the analysts at Sunrise Management & Consulting report that they were barraged with information on the weakening US economy, rising mortgage rates, tighter lending standards, declining single-family home or condominium prices, and rising inventory; but one thing was clear: the apartment market in the region continues to grow.

That growth, however, is occurring at various degrees, depending on the location. Apartments remain somewhat insulated from what’s going on with the greater housing market. “The housing slump and tightening credit standards are increasing demand in the multifamily rental markets,” says Jesse Holland, president of Sunrise Management. Much of this pressure is coming from the formation of new households–many of which opt to live in apartments–and those who prefer to rent by choice. A growing segment of households are being forced to rent due to more stringent mortgage requirements. “The segment of the market that would normally be moving from rental apartment living to single-family home ownership is finding itself stuck by higher lending standards requiring larger cash down payments.”

In compiling the report, Sunrise Management researchers looked at rental information, amenities, utilities, demographics and ownership and management data for some 330,000 units in nearly 1,900 multifamily communities in Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, Vermont and New York State, excluding New York City.The firm noted that the average rent and rent per square foot throughout New York State is enjoying continued growth, with most locations seeing healthy increases. Rates in the Capital region, including Albany, rose $26 to $889 per month; the Central region, which includes Syracuse, rose $7 to $690; the East-Central Region (Utica), rose $15 to $634; and the Hudson Valley (Poughkeepsie) went up $25 to $1068. Average rent in other areas rose as well: Northern Region (Plattsburgh), $24 to $647; Southern region (Long Island and Westchester), $37 to $1749; Southern Tier region (Binghamton), $24 to $677; West-Central region (Rochester), $9 to $758; and the Western region, $14 to $756.