It’s a great time to be a renter
California Housing Crash, The Economy, Real Estate June 20th, 2008
For all of you renters out there, here are some great news!!!
Rents are coming down or not increasing enough to keep up with inflation. The burst of the housing bubble has created a great opportunity for renters. According to the LA Times:
Renters sitting prettier amid house-market upheaval
Renters may be the big winners in the housing slump, especially in places like Southern California, Las Vegas and Florida, which have thousands of vacant for-sale and foreclosed homes and condominiums on the market.
Apartment vacancies are edging up in many areas of the country as frustrated sellers instead try to rent out their homes and condos. And that is making it harder for landlords to raise rents.
In the toughest markets, apartment owners are even offering lease incentives to snag renters.
This “shadow market” of investor-owned homes and condos accounts for almost half of the rental stock and attracts displaced homeowners more often than your typical apartment renter.
“What’s different now is the degree of excess homes and condos being put on the rental market,” said Hessam Nadji, managing director at Encino-based Marcus & Millichap Real Estate Investment Services, which analyzed the data. “The sheer volume is creating more competition for traditional rental markets.”
June 22nd, 2008 at 12:57 pm
And simple economic logic says that, if rents are under pressure or coming down, until that changes the same is likely be true for house prices. In the Central Florida market where we work, there’s already a disconnect between rental rates and house prices. We have some way to go before we see a recovery, but I guess that makes it all the more opportune for investors.
June 23rd, 2008 at 9:35 am
I live in Irvine, CA and see all kinds of great deals for renters. Firt month free, and some other deals are pretty common. You can tell that the economy is slowing and landords know it therefore bringing down rent prices.
June 23rd, 2008 at 11:51 am
Lisa is exactly right… Irvine is very soft, and other areas even more so (like Orange and newer parts of Anaheim)
June 24th, 2008 at 12:39 am
I am not surprised that rents are dropping. But anyone who wants a home and has the means to buy one should do it. This down cycle will not last forever. Though it probably will last a good while longer, buying is always preferable.