Sioux Falls, SD
The city of Sioux Falls is booming, with new homes going up everywhere. Even with the new construction, the city's vacancy rate isn't keeping up with demand.
The vacancy rate, or the number of rental properties not being used in Sioux Falls last year was just over four percent. That number hasn't changed much over the past two years.
As homes and businesses continues to pop up across the city, the number of "For Rent" signs isn't going down. Josh Kattenberg, owner of Real Property Management Express, thinks Sioux Falls' population, which grew by 3,500 people last year, could be out pacing the construction in Sioux Falls.
"That influx of people... we need more housing units to keep up with that rate of growth," Kattenberg said.
Kattenberg believes people moving into the city usually rent for a year or two before buying their own homes. He also says it could be part of a national trend in which more people are renting.
"Back in 2005, we peaked in home ownership at a rate of 69 percent. And just recently, new numbers came out in 2013 showing home ownership rate down to 65 percent and some people are projecting that to go even lower. So we've converted from a home ownership to more of a renter nation," Kattenberg said.
He doesn't have exact numbers, but Kattenberg believes if the growth continues, rental prices will go up. The property manager also sees a need for help to maintain existing rental properties.
"We struggled with it last year with just handymen, just trying to find good quality people to do basic repairs," Kattenberg said.
People in Sioux Falls may be enjoying a booming community now, but they could still be paying a high price for the recession a few years ago, which means the need for more rentals will only continue to climb.
"When people went through the recession, you had a lot of folks either had a foreclosure or a bankruptcy. The bank's not going to loan them money for a house so then they need to rent," Kattenberg said.
Kattenberg manages more than 150 different properties; he currently only has one vacancy.