Last month, I observed that listed rentals dropped from 8400 to 7900 in december, approximately. This was a bit of a surprise to me, as as a landlord, I have always found December to be one of the hardest months to rent a home. So, I was curious to see what would happen in January, would rentals become more numerous?
Well, today is the midpoint of January, and we have 7350 available. Now, I have to confess, there are several factors that make it hard for me to analyze the rental market from mls data:
1. I didn’t keep track of this data historically, so I don’t have old patterns to compare to.
2. I don’t know how much seasonality it has (after all, Phoenix is famous for winter snow-bird renters)
3. Historically, the MLS wasn’t used much for rentals. Many years ago, everybody used the newspaper. A few years ago, it was craigslist, until that got over run with spam. In the past couple of years, as lots of investors bought homes, often times as large companies, they placed them with real estate agents; The number of real estate rentals listed on the MLS had been going up quite strongly over the past few years.
So, given all that, I don’t know exactly how to interpret the data, but I will say this: If this trend continues, we may see a serious tightening and hence price increases in the Phoenix rental market going forward, ad precisely the same time that purchase prices seem to have stagnated. I think many people’s analysis is that “renting is about the same price as buying today”, but if we see rental prices go up 10% say over the next 3 or 4 years, that changes the buy to rent decision dramatically!