Years after the last housing boom, Hawaiians are still paying too much for rent. However, things are starting to change and the slowed real estate market is encouraging landlords to decrease their rents. Indeed, for the first time in more than a decade, property managers and landlords are looking for new ways to fill vacancies which could mean anything from free parking to lower rents for tenants.
Even urban properties throughout Hawaii are seeing lower rents encouraging suburban and rural renters to make the move to the city; a move they couldn’t afford in the past. Without question, we’re seeing more of a renters market throughout Hawaii and this is giving more power to the tenants. They’re in a position to ask for lower rents or property improvements for the first time in a very long time.
Landlords have been suffering from very long waits to fill vacancies which is why many are lowering rents by as much as $100 or more in order to fill the vacancy or to encourage current tenants to stay. Whereas many renters in the past expected to pay as much as $1,025 for a studio, many one-bedroom apartments are available for as low as $800 in some places.
Indeed, many renters are looking for lower monthly payments so they can start saving for a mortgage or other big purchase. And landlord urgency to fill apartments is only helping renters secure better deals. Many stories are floating around about people who are looking to move in a month or two only to have property managers request that they move in sooner.
There are so many rental properties available right now that it’s hard to imagine anybody not finding a place that suits their budget. Yet Hawaii’s rental market is much stronger than those on the Mainland. Some properties that have fallen victim to the housing collapse remain empty for months at a time. Landlords are resorting to gimmicks and other offers to attract renters. You can expect anything from slashed rental rates to free gift cards and even major renovations.
Unfortunately, this renters market is ameliorated by the economic situation faced by many potential renters. They are often facing difficult times as employment figures continue to drop and companies cut salaries and hours. As such, lower housing costs aren’t making a major difference in their economic picture. In fact, much of the reason for increased vacancies is the fact that many renters cannot afford to go it alone anymore. This means renters are downsizing or doubling up to share the cost of living and as a result there is an increase in the number of vacancies.
At the moment, experts are predicting further decline in rental prices throughout the United States. High unemployment and little hope for economic recovery suggest that rents will stagnate well into 2010 and further drops have not been ruled out. The average asking price for apartment rentals fell 12 per cent in 2009 while the asking rent for homes dropped 4.7 per cent and townhouses fell about 2.7 per cent.
Still, let’s keep these rental prices in perspective. Despite lowering costs, Hawaii is still one of the most expensive states in which to rent and we’re in desperate need of affordable housing. The average rent in Hawaii was actually the highest in the country and more than half of renters spend more than 30 per cent of their income on housing. Surprisingly, more than 40 per cent of Hawaiian residents are renters and as such they are welcoming the news of lower rents.
Declining rents are a definite boon for renters and low-income families. Some renters even have the opportunity to negotiate cheaper rents which has been unheard of in the last couple of years. And more importantly, landlords are willing to drop their rents. Unfortunately, many o f these negotiations are the result of less income for the renters – lost jobs, cut wages, or fewer hours have made economic responsibilities harder to meet and the only option for many is to cut living costs.
For the first time, Hawaii tenants are in a highly favorable bargaining position. New appliances, upgrades, carpeting, and other renovations are a few of the perks to this troublesome housing market. Landlords don’t want to lose tenants so are willing to make some compromises that they might not have been willing to make in the previous housing market.
But these lower rents don’t equate to more affordable housing. Policy makers and local councils need to be aware of the lack of affordable housing for low- and middle-income families and these drops in rent are not being seen by people in these income groups. So although rental prices are dropping, this is not affecting the neediest people in Hawaii and the government still needs to work toward providing affordable options.
Photo Credit: jessicafm
Posted in Hawaii Real Estate, Hawaii Tourism |
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