Rental prices up; property values on the rise, too

Mar. 30—Realtors have seen homes flying off the market due to low interest rates in the midst of the pandemic, but clients are now seeing an increase in rent prices.

While there is no specific formula to calculate rate of lease or rent prices, landlords or property managers base it on demand and market norms, according to Realtor Steven Wright, manager at Century 21 Wright Real Estate.

"From an investment standpoint, an owner would look at what the expenses are on a property and what the goal is for cash flow," Wright said. "While there are obvious expenses like mortgage payments and taxes, most property owners also have property management fees, vacancy reserves, cash reserves, and maintenance reserves they also figure into the equation."

The pandemic is played a hardship in many lives, personal and professional, and Wright said it had a dramatic affect on the real estate market from a sales and rental perspective.

"As demand increased, property values increased, which then gradually increased rent," he said.

Because of inflation, labor shortages and the cost of maintenance, repairs and remodels increasing, rent prices go up. Wright explained that if landlords were able to secure a lower interest rate, that may have offset their cost increases to help keep rent affordable.

"Due to the steady flow of people moving to the Tahlequah area for work, school, and retirement, rent will likely gradually increase," he said.

The rental market is already active due to Northeastern State University, Cherokee Nation and Northeastern Health System and Cherokee Nation's W.W. Hastings Hospital. Wright said the housing market also saw a major increase in demand since the start of the pandemic.

"While we don't track rental statistics, I don't believe there has really been a shift more to one side; both have likely increased at around the same rate," he said.

Long-time Tahlequah resident Bob Gibbins has lived in the same apartment for over 20 years, and he said his rent has increased three or four times during that period.

"They've been very fair about it," he said. "I'm very satisfied with Twin Oaks Apartments. Otherwise, I wouldn't have lived there 20-plus years."

Wright said buying vs. rental depends on the client's financial situation and personal goals, and both have benefits.

"Renting can offer predicable expenses and covered maintenance with the flexibility to relocate, if needed, while owning your home provides stability, financial equity and tax savings, along with a pride of ownership," said Wright.

Freddie Mac reported that 30-year fixed-rate mortgages averaged 4.42 percent in March. In September 2020, the average reported was 2.86 percent.

"This week, the 30-year fixed-rate mortgage increased by more than a quarter of a percent as mortgage rates across all loan types continued to move up," said Sam Khater, Freddie Mac's chief economist.

The average cost of rent for a one-bedroom apartment in Tahlequah is roughly between $450 a month and $570 a month.

A one-bedroom apartment at Southgate Inn is $450, while a two-bedroom unit costs $550 a month, with a one-year lease required. Rent for apartments at Scholars Inn is between $510 and $670 a month, with leasing being six months to one year.

A one-bedroom unit at Pleasant View costs $575, while two-bedroom units are between $675 and $1,025.