Realtors: Rent rising in less affluent areas quicker than higher-income neighborhoods
LAS VEGAS, Nev. (FOX5) - People trying to pay the rent are having a tough time keeping up thanks to a recent trend that’s seeing prices in lower-to-middle income neighborhoods rise while rentals in more expensive locations are falling in price.
“It’s tough,” Las Vegas-area realtor Michelle Gamble told FOX5 Monday. “The market is tough.”
Gamble is worried about the trend’s effect on low-income families.
“I’ve had clients who came into Nevada, they moved here about four years ago where they were paying like $900 a month,” she explained. “Now their rent is up to $1500 and $1600. And no upgrades.”
“The higher-end rents are coming down quite a bit,” realtor Steve Hawks noted of recent market trends. “The lower-end to mid-range rents are staying steady. Maybe going up a little bit.”
Hawks says one of the causes could be the low interest rates that homebuyers took advantage of during the pandemic.
“Many sellers are no longer selling their home to buy another,” he said. “Instead, they’re renting their home out because their interest rate is so low and their payment is so low.”
That phenomenon is creating more rental inventory, especially on the higher end of the price spectrum. Hawks says a factor putting upward pressure on prices at the lower end is that hedge funds have been buying lots of affordable housing, something he says has completely changed the real estate game in just ten years.
“They pretty much control the rental market in that arena under $500k,” Hawks said of the large out-of-state buyers. “They have by far the most rentals.”
Gamble says that as prices for once-affordable units keep increasing, many families are being priced out of neighborhoods they used to be able to afford.
“I’ve had clients who had excellent credit, made a substantial amount of income monthly, and they were unable to get approved for these rentals,” she lamented.
“This is what happens when you have big corporate America buy single family houses where people can’t rent,” Hawks added. “People can’t buy. What does that do? It causes prices to go up. It causes rents to go up. That’s the number one problem right there.”
Copyright 2023 KVVU. All rights reserved.