Employment was still at 2007 levels during August 2012, but the employment situation is having less and less of an effect on the demand for rental housing as time goes on. Rents have stabilized in the region and vacancies are moving down. Continued demand for housing will continue as new building permits remain at 15-year lows this year.
The third graph shows year-over-year changes in employment in the region. Interestingly, the region experienced almost uninterrupted job growth between 1995 and 2008. The job losses between 2008 and 2011, however, were very large.
The year-over-year growth in the average rent has shown signs of establishing an upward trend in recent quarters. This year's second quarter's year-over-year change was 4.5 percent, which outpaces the official inflation rate and is also the largest growth rate since the fourth quarter of 2008 when rent growth hit 10.4 percent. Nevertheless, rent growth continues to be constrained by the fact that the GJ market is somewhat dominated by smaller owners who tend to raise rents at a slower pace than large corporate owners. This is due partially to the fact that small owners are more motivated to avoid turnover costs than larger owners.