Bellingham, WA Rents Are Up, Up, UP!
Do a quick Google search of national rental data and you'll immediately see some downright shocking numbers.
In this article on Rent.com you'll read that average rents for 2-bedroom apartments have seen a year-over-year increase of 39%.
Nationally (per an assessment of 97 different metro areas), a 2-bedroom apartment will now cost you $2106/month.
To pay that, you'll need a full-time job paying nearly $26/hour.
Oh...
and you'll need to actually FIND an available apartment.
Nationally, vacancy rates are reported to be about 5.6%.Notice the trend, though, going back to 2010.
Vacancy is at an all-time low right now.
Bellingham vacancy rates are much, much lower than the national average.
I don't have official data, but in talking to Landmark Property Management I was told they "round to 1%."That is, 1 out of every 100 rental apartments or houses is currently available for move-in.
Have a pet who's part of your family and moving in with you?
That number then drops from 1 in 100 to closer to 1 in 500 -- and the price for rentals that allows pets goes up materially as well.
So...what happened?
The rental scarcity situation was a thing in Bellingham before the pandemic even started.
Then, as the real estate market picked up major momentum over these past two years, the scarcity and competition for good rentals intensified.
And then, a two-stage can of gasoline was dumped all over the already healthy bonfire known as the local rental market:
Stage 1) Mortgage rates doubled over the course of just several months.
With single family home prices hitting a median price in Bellingham over $700K, a large number of would-be buyers who still qualified for a loan of that amount got a call from their respective lenders:
"I'm sorry," they were told, "the amount you were once approved has declined by 30%."
In the time it took to finish that phone call, those buyers had suddenly become renters.
They simply didn't qualify to borrow enough money to buy in Bellingham or often anywhere in the County.
Stage 2) Even for the buyers who still had the means to buy something, their confidence was shaken.
What makes a housing market cool?Certainly rising interest rates... but that's just the mathematical portion of the equation.Much more important and "real" is buyer sentiment, or emotion.
If a buyer thinks they can get a better price on a house if they wait til tomorrow, many of them will wait.
During that waiting period, they still need a place to live, so what do they do?
They enter the tenant pool, and start competing for rentals.
Now...
here's where the competition between tenants gets toothy.
People who yesterday were fully approved to get a home loan and are now applying for a rental usually have a very, very strong rental application.
That they were mortgage-approved means they have:
Gainful, stable employment
Good credit
A decent amount of cash
A generally attractive "stability profile"
Held up next to the average not-qualified-as-a-buyer tenant who applies for the same apartment, that yesterday-was-a-buyer's application looks very solid.
And, often, because they've been versed in all the competitive strategies to beat out others who want the same property, they pull out those tricks in their rental applications, too:
Escalation over the published "list price"
Willingness to pay the entire year in one lump sum
Larger security deposit
Flexibility on other terms such as move-in date, utility expenses, non-refundable cleaning deposit, etc.
