Rent up in May in U.S.

Rents have gone up across the U.S. in May, according to a report released Thursday by Trulia, online residential real estate site.

Based on the for-sale homes and rentals listed on Trulia, these monitors take into account all listed homes and reflect trends in prices and rents for similar homes in similar neighborhoods through May 31, 2012. Here are the findings:

Asking Prices Flat in May, Ending Three Months of Increases

Asking prices on for-sale homes–which lead sales prices by approximately two or more months – were unchanged in May month-over-month, seasonally adjusted. Together with increases in April and March, asking prices in May rose nationally 1.6 percent quarter over quarter (Q-o-Q), seasonally adjusted. The price increase unadjusted for seasonality was even higher: 5.2 percent Q-o-Q, since prices typically jump in springtime. Year over year (Y-o-Y) asking prices fell slightly by 0.2 percent. Nationally, 41 out of the 100 largest metros had Y-o-Y price increases, and 86 out of the 100 largest metros had Q-o-Q price increases, seasonally adjusted.

May 2012 Trulia Price Monitor Summary
% change in asking prices # of 100 largest metros with asking-price increases % change in asking prices, excluding foreclosures
Month-over-month, seasonally adjusted 0.0% (not reported) 0.4%
Quarter-over-quarter, seasonally adjusted 1.6% 86 2.1%
Year-over-year -0.2% 41 1.0%

Turn Arounds

Several metros saw prices turn around this quarter. Prices in Seattle, for instance, rose 4.4 percent Q-o-Q, seasonally adjusted, in May after falling 12.5 percent Y-o-Y in the previous twelve months. In Orlando, however, prices fell 0.5 percent Q-o-Q, seasonally adjusted, in May after increasing 5.9 percent Y-o-Y in the previous twelve months.

Top “Turnaround” Metros

Metros turning UP most Metros turning DOWN most
Cleveland, OH Fort Lauderdale, FL
Las Vegas, NV Fort Worth, TX
Milwaukee, WI Greenville, SC
Seattle, WA Orlando, FL
Tacoma, WA
Toledo, OH
Note: “Turnaround” metros are those with largest percentage change from decrease to increase (first column) or increase to decrease (second column), comparing recent Q-o-Q (Feb-May 2012) with previous Y-o-Y (Feb 2011-Feb 2012). Metros listed in alphabetical order.

Declines in Foreclosure Prices Cancelled Out Gains in Non-Foreclosure Prices

Whereas asking prices overall fell 0.2 percent Y-o-Y, asking prices excluding foreclosures rose 1.0 percent Y-o-Y. (Unless otherwise specified, the Trulia Price Monitor includes asking prices on REO-stage foreclosed homes.) Foreclosure prices fell 5.8 percent Y-o-Y. In hard-hit Las Vegas, Atlanta and Sacramento, asking prices excluding foreclosures rose Y-o-Y, even though prices declined Y-o-Y when foreclosures were included. In these metros, foreclosure listings account for about half of the homes listed on Trulia. In contrast, foreclosure listings account for fewer than 5 percent of homes listed on Trulia in New York, Newark and Baltimore.

Rent Increases Accelerate to 6 Percent Nationally

In May, rents were 6.0 percent higher than they were a year ago, up from the 5.4 percent Y-o-Y rent increase in April, and 4.8 percent in March.[1] In San Francisco, rents rose 14.4 percent Y-o-Y in May; Oakland, Miami, and Denver rents are also up over 10 percent Y-o-Y. Of the 25 largest rental markets in the U.S., only in Las Vegas did rents decline Y-o-Y.

Where Rents Rose Most Among Largest Rental Markets

# U.S. Metro Y-o-Y % Change in Asking Rent, May 2012
1 San Francisco, CA 14.4%
2 Oakland, CA 11.4%
3 Miami, FL 11.3%
4 Denver, CO 10.5%
5 Boston, MA 9.8%
6 Seattle, WA 9.6%
7 Houston, TX 9.2%
8 Portland, OR-WA 6.8%
9 Chicago, IL 6.4%
10 New York, NY-NJ 5.9%
“Not only are rents rising, they are rising faster every month and rents are up in all of the largest markets except for Las Vegas. The economy has strengthened enough to increase rental demand, but has yet to recover strongly enough for renters to become homeowners,” said Jed Kolko, Trulia’s Chief Economist. This statement, if true nationally, is doubly so in the Bay Area.