After 12 month of declining rental prices in Montgomery County, there was an increase in August of the 12 month moving average of rental prices. The average is up from $2,253 in July to $2,264 – an increase of $11 per month. Will this be a trend or just another one month upward step before another few months of decline?
In August 2014 the average was $2,264. A year ago, in August 2013 the average was exactly $2300. This is a decrease year over year of 1.6%. The yearlong drop in average rental price is a result of supply and demand. Over the past 5 years a lot of investors had jumped into the real estate market to take advantage of the lower home sale prices. We hit the tipping point about a year ago. That is when rental prices started to go down.
We are headed into the slowest time of the year for rental and there is typically downward pressure on rental prices and also increased days on market (DOM).
The Days on the Market (DOM) in August was 37 days, slightly more than July at 36 days. This is down from the February 2014 high of 62 DOM. The February 2014 DOM was the highest in 5 years. The average DOM for 2014 has been tracking higher than 2013. The average DOM for 2013 was 42 days and in 2014 the average is up by 5 days to 47 days.
Days on the market normally increase between now and early spring. This data is an appropriate strategy to use to increase your rents and limit your vacancies – based on when leases expire