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Determinants of Market Rent

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Recent empirical work has investigated substantial lists of factors that have been employed to explain market rents for residential income property. These factors range from physical attributes to vacancy rates. To better understand the myriad factors that have been demonstrated to affect apartment rent and, in turn, the valuation of apartment complexes, this paper reviews the existing literature on the apartment rent determination process. Our analysis extends the extant contributions by discussing some of the consistencies and the unresolved issues concerning the factors employed in estimating apartment rent. This survey should provide information for appraisers who make market-derived rent adjustments, for property managers who set apartment rents, and for developers who design apartment projects.

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  • G. Stacy Sirmans & John D. Benjamin, 1991. "Determinants of Market Rent," Journal of Real Estate Research, American Real Estate Society, vol. 6(3), pages 357-380.
    • Handle: RePEc:jre:issued:v:6:n:3:1991:p:357-380
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    2. Arthur A. Eubank & C. R. Sirmans, 1979. "The Price Adjustment Mechanism for Rental Housing in the United States," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 93(1), pages 163-168.
    3. Stephen Malpezzi & Larry Ozanne & Thomas G. Thibodeau, 1987. "Microeconomic Estimates of Housing Depreciation," Land Economics, University of Wisconsin Press, vol. 63(4), pages 372-385.
    4. Donald Haurin, 1988. "The Duration of Marketing Time of Residential Housing," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 16(4), pages 396-410, December.
    5. James R. Frew & G. Donald Jud, 1988. "The Vacancy Rate and Rent Levels in the Commercial Office Market," Journal of Real Estate Research, American Real Estate Society, vol. 3(1), pages 1-8.
    6. Denton Marks, 1984. "The Effect of Rent Control on the Price of Rental Housing: An Hedonic Approach," Land Economics, University of Wisconsin Press, vol. 60(1), pages 81-94.
    7. Karl L. Guntermann & Stefan Norrbin, 1987. "Explaining the Variability of Apartment Rents," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 15(4), pages 321-340, December.
    8. Rosen, Kenneth T & Smith, Lawrence B, 1983. "The Price-Adjustment Process for Rental Housing and the Natural Vacancy Rate," American Economic Review, American Economic Association, vol. 73(4), pages 779-786, September.
    9. Shilling, James D. & Sirmans, C. F. & Corgel, John B., 1987. "Price adjustment process for rental office space," Journal of Urban Economics, Elsevier, vol. 22(1), pages 90-100, July.
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    Cited by:

    1. Kee S. Kim & Walt A. Nelson, 1996. "Assessing the Rental Value of Residential Properties: An Abductive Learning Networks Approach," Journal of Real Estate Research, American Real Estate Society, vol. 12(1), pages 63-78.
    2. Francois Des Rosiers & Marius Theriault & Laurent Menetrier, 2005. "Spatial Versus Non-Spatial Determinants of Shopping Center Rents: Modeling Location and Neighborhood-Related Factors," Journal of Real Estate Research, American Real Estate Society, vol. 27(3), pages 293-320.
    3. Marcus Allen & Ronald Rutherford & Thomas Thomson, 2009. "Residential Asking Rents and Time on the Market," The Journal of Real Estate Finance and Economics, Springer, vol. 38(4), pages 351-365, May.
    4. Mateusz Tomal & Marco Helbich, 2023. "A spatial autoregressive geographically weighted quantile regression to explore housing rent determinants in Amsterdam and Warsaw," Environment and Planning B, , vol. 50(3), pages 579-599, March.
    5. Juergen Deppner & Marcelo Cajias, 2024. "Accounting for Spatial Autocorrelation in Algorithm-Driven Hedonic Models: A Spatial Cross-Validation Approach," The Journal of Real Estate Finance and Economics, Springer, vol. 68(2), pages 235-273, February.
    6. Marius Claudy and Claus Michelsen, 2016. "Housing Market Fundamentals, Housing Quality and Energy Consumption: Evidence from Germany," The Energy Journal, International Association for Energy Economics, vol. 0(Number 4).
    7. Dubé, Jean & Rosiers, François Des & Thériault, Marius & Dib, Patricia, 2011. "Economic impact of a supply change in mass transit in urban areas: A Canadian example," Transportation Research Part A: Policy and Practice, Elsevier, vol. 45(1), pages 46-62, January.
    8. Thomas M. Springer & Neil G. Waller, 1996. "Maintenance of Residential Rental Property: An Empirical Analysis," Journal of Real Estate Research, American Real Estate Society, vol. 12(1), pages 89-100.
    9. Beth Wilson & James Frew, 2007. "Apartment Rents and Locations in Portland, Oregon: 1992 – 2002," Journal of Real Estate Research, American Real Estate Society, vol. 29(2), pages 201-218.
    10. Jian Wang & Murtaza Das & Stephen Tappert, 2021. "Applying reinforcement learning to estimating apartment reference rents," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 20(3), pages 330-343, June.
    11. John D. Benjamin & G. Stacy Sirmans, 1996. "Mass Transportation, Apartment Rent and Property Values," Journal of Real Estate Research, American Real Estate Society, vol. 12(1), pages 1-8.
    12. Joseph L. Pagliari, Jr. & James R. Webb, 1996. "On Setting Apartment Rental Rates: A Regression-Based Approach," Journal of Real Estate Research, American Real Estate Society, vol. 12(1), pages 37-62.
    13. Richard J. Buttimer, Jr. & Ronald C. Rutherford & Ron Witten, 1997. "Industrial Warehouse Rent Determinants in the Dallas/Fort Worth Area," Journal of Real Estate Research, American Real Estate Society, vol. 13(1), pages 47-56.
    14. Martina Lawless & Kieran McQuinn & John Walsh, 2018. "Identifying Rent Pressures in Your Neighbourhood: A New Model of Irish Regional Rent Indicators," The Economic and Social Review, Economic and Social Studies, vol. 49(1), pages 73-92.
    15. Jian Wang & Murtaza Das & Amar Duggasani, 2016. "Predicting and measuring customer lifetime values for apartment tenants," Zeitschrift für Immobilienökonomie (German Journal of Real Estate Research), Springer;Gesellschaft für Immobilienwirtschaftliche Forschung e. V., vol. 2(2), pages 103-120, October.
    16. Hirota, Shinichi & Suzuki-Löffelholz, Kumi & Udagawa, Daisuke, 2020. "Does owners’ purchase price affect rent offered? Experimental evidence," Journal of Behavioral and Experimental Finance, Elsevier, vol. 25(C).
    17. Füss, Roland & Koller, Jan A., 2016. "The role of spatial and temporal structure for residential rent predictions," International Journal of Forecasting, Elsevier, vol. 32(4), pages 1352-1368.
    18. John D. Benjamin & G. Stacy Sirmans & Emily Norman Zietz, 1997. "Security Measures and the Apartment Market," Journal of Real Estate Research, American Real Estate Society, vol. 14(3), pages 347-358.
    19. Francois Des Rosiers & Marius Theriault, 1996. "Rental Amenities and the Stability of Hedonic Prices: A Comparative Analysis of Five Market Segments," Journal of Real Estate Research, American Real Estate Society, vol. 12(1), pages 17-36.
    20. G. Donald Jud & John D. Benjamin & G. Stacy Sirmans, 1996. "What Do We Know about Apartments and Their Markets?," Journal of Real Estate Research, American Real Estate Society, vol. 11(3), pages 243-258.

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    • L85 - Industrial Organization - - Industry Studies: Services - - - Real Estate Services

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