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Rent tops $800 a month


Valley apartment rental prices jumped for the third year in a row, and are now at the highest rate ever.

The average apartment rental price in the Valley jumped to more than $800 for the first time, according to a recently released report from RealFacts, a data analysis firm.

The price increase was provoked by the collapse of the housing market, said Tracy Clark, economist with the W.P. Carey School of Business.

"You had a long period with a lot of people who were not going into apartments," Clark said. "When the housing market was hot, everyone just went into a house because mortgage rates were so low."

When the market collapsed, people started looking for apartments again, but the supply of apartments in the Valley had actually dropped because so many had been converted into condominiums during the housing boom, Clark said.

"When it's increasing demand with relatively steady supply, what happens?" Clark added. "Prices go up."

Apartment prices stayed near $700 during the early 2000s, but jumped from $713 to $805 between 2004 and 2007.

In general, apartment prices near ASU are higher than those Valley-wide.

"You are going to pay a premium to be close to the University," Clark said.

At the Towers, just north of the Tempe campus, prices are going up next semester under the new ownership of the Residential Life, Chinese junior Ilana Zeira said.

"I live in the Towers and next semester it will be $150 more," she said. "I'm looking to get a different apartment."

Prices per person at The Towers will be more than $600, Zeira said.

Other locations near campus are comparably priced. A two-bedroom apartment costs $1,040 at The Quadrangles, $1,208 at Gateway at Tempe and $1,370 at the Villas on Apache Boulevard.

With not many new apartments being built, prices will not be leveling off soon, Clark said.

"[Prices] probably will continue to go up," Clark said.

Hopefully, rent will go up enough to encourage people to build more apartments to handle the demand, Clark added.

In contrast to apartments, the rental market for housing is unknown, Clark said.

Because each house is owned privately, and the owners are not required to submit their rental rates to anyone, housing market rental prices are very hard to track, Clark added.

"We have a pretty good idea what's going on with apartment rental rates," he said. "But we have no idea what's going on with houses."

Reach the reporter at: john.dougherty@asu.edu.


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