TEXARKANA -- Local housing and rental property experts say a lack of inventory caused a spike in rent prices, which have remained high for the time being.
"When supply goes down, rent goes up," said Jared Horton, a property manager for Snow Developments, which owns and operates about 150 rental units scattered throughout the Twin Cities.
Horton says a lack of inventory in the market that caused home prices to skyrocket earlier this year caused a higher demand for rental properties, which allowed landlords to be able to charge more for rent.
"It's crazy what they're going for. And I mean we don't have any vacancy," he said. "If somebody does move out, as soon as it's ready, I already have it rented."
He said a regular two- or three-bedroom house for rent used to have a limit of about $1,000 monthly. Over the past year, he's seen numbers around $1,500 or even $2,500 for new houses.
"There's been a really big rent increase," Horton said. "We used to start at like $300 a bedroom and go up or down based on that. Now, a little, one-bed house is more like $600."
Brian Carberry, senior managing editor for rent.com, said as of July 2022, the national average for a one-bedroom rental unit was around $1,800. For a two-bed, it was $2,100.
"You're seeing prices up nationally in the 30% to 40% range, compared to this time last year," he said. "Normally, what we would expect to see is rent price increases anywhere in that 3% to 8% range year to year."
Virginia Raffaelli, broker/owner for Raffaelli Realtors, said she's noticed a large amount of rental properties being bought off the market by investors over the past year, as home prices were extremely high.
"It's not so much that rent has dramatically increased. We just don't have as many affordable options for rent homes or homes for lease as we used to," she said. "Because they were sold when the market went up."
Raffaelli used an example to convey why this was an attractive option for investors.
"For instance, if I purchased a house for $125,000, and I was making rent of about $900. Well, prices kind of jumped to where I could sell it for $175,000 and cash out $50,000. Anything under $200,000 was an easy sell, so landlords started selling the affordable housing, essentially," she said.
She said the only solution she can think of is to build more affordable housing in the area.
Developers in Nash, Texas, have already started to pick up on the trend. Two construction projects are expected to provide approximately 160 housing units to the area soon.
Nash City Administrator Doug Bowers said in June 2022 that construction started in late fall 2021 on townhouses at 330 N. Pecan St. and duplexes at 60 Clark St., next to El Parian Mexican Restaurant.
The townhomes will include 1 bed/1.5 bath and 2 bed/2.5 bath floor plans, while the duplexes will include 2 bed/2 bath and 3 bed/2 bath floor plans.
While rent prices are still high at the moment, Horton and Carberry both say they expect the rate of increase to slow soon.
"I don't think it's still climbing," Horton said. "I just don't think people can afford more rent. And we haven't been raising our prices to keep up with the market because I'd rather keep my prices lower so I have long-term tenants."
Carberry said the housing market will be a great indicator of what we can expect to see in the rental market.
"Rent prices are always going to be going up. I don't think we're going to hit a point where we hit a top and everything comes back down," he said. "But it's really that rate of increase that's going to slow down."
Carberry said a lot of current renters are taking up roommates to split rent costs because it's more affordable than renting a one-bedroom apartment alone.
"It's definitely a tough time for renters right now," he said. "We'll wait and see what happens over the next few months, but we're keeping our eyes on it and hoping the worst is over for renters."