It’s an inevitability: Near the end of your apartment lease, a somewhat polite note from your landlord appears informing you that your rent is increasing next year. Pay it or get out.
All renters have received that letter, but there’s no doubt it’s been hurting more lately.
Rents have spiked across the country in the past year. Seemingly everyone is talking about it. Yesterday the Dallas Morning News reported Dallas-Fort Worth area apartment rents increased by more than 17 percent 2021.
“A lot of the year-over-year numbers that you read about and see right now are pretty eye-popping,” says Tom Gilmore, co-founder of Apartment Advisor.
Part of the reason rents have grown so much, Gilmore says, is increasing house prices have driven many back into apartments, which then causes rents to jump. “You just have to do simple supply-demand economics.”
Plus, everyone keeps moving to Dallas. Around 70,000 new renters have come to Dallas-Fort Worth, Gilmore says, citing data from Richardson-based RealPage. Although, Dallas alone didn’t fare very well in the decennial Census; most of the movement is happening in the surrounding suburbs. North Texas generally boasts a lower cost of living, more affordable housing, and the local economy is thriving, Gilmore says. That creates lots of demand. But thanks to supply-chain shortages, there aren’t enough new apartments to keep up with demand.
“It all created this little perfect storm where rent prices have gone way up,” Gilmore says.
After chatting with Gilmore, we dug into the numbers to really understand what’s happening with Dallas renters.
Texas was the country’s #1 growth state in 2021.
U-Haul ranked the U.S. on how many one-way trips trucks took into each state, and Texas took the top spot for the first time since 2018.
50.2 percent of Texas’ U-Haul one-way traffic was arrivals.
Per the company’s January 3 report, many of those arrivals are coming from the East and West coasts.
Californians really are moving to Dallas.
It’s a common gripe for many a grouchy Texan stuck in traffic, but there’s some merit to this statement: The top 3 origin cities for DFW transplants are Los Angeles, Chicago, and Phoenix, Zillow reports. Dallas is also the top destination city for San Diego ex-pats.
The top 3 Dallas neighborhoods to watch in 2022 are Oak Cliff, Lake Highlands, and Old East Dallas.
Apartment Advisor identified these spots by looking at its users’ interest in recent months. These neighborhoods skew cheaper than other spots in Dallas. The median rent for Oak Cliff, Lake Highlands, and Old East Dallas is $1,009, $990, and $1,183, respectively. There’s a demand amongst renters for properties that are more affordable, Gilmore says, “now that their dollar isn’t going as far.”
By the end of November 2021, only 9 percent of Greater Dallas apartments were offering rent discounts.
This means complexes are doing so well filling apartments, they don’t necessarily need to entice new renters with discounts, according to Apartment Association of Greater Dallas’s January Rooflines issue. In fact, rents are actually increasing.
One-bedroom apartment rents have increased 5 percent since last August.
This compares to a 9 percent increase in Houston and 3 percent increase in Austin, Gilmore says. Dallas is currently ranked the 29th most expensive city in America.
Overall rent in Dallas grew 15.8 percent last year.
This number is less than the national average of 17.8 percent, according to apartmentlist.com’s Dallas Rent Report. However, 10 DFW-area cities saw more than 20-percent spikes. For example, McKinney and Coppell’s rents grew 25.7 percent and 29.4 percent, respectively.
Dallas is still cheaper than Austin, though.
The median one-bedroom apartment rent is $1,250 in Dallas while its $1,449 in Austin. “They’re still fairly inexpensive markets compared to the New Yorks, the San Franciscos, and even the Bostons of the world,” Gilmore says.
More than 16,000 new apartments began leasing last year.
The number of new units built in apartment complexes was similar to previous years, AAGD wrote, but demand easily outstripped construction rates. Perhaps it’s a permitting issue.
97 percent of Dallas-Fort Worth apartments are filled.
That number is definitely high, says Gilmore, and 2022 will probably continue to see rent increases, but “it likely won’t stay like this forever.”