With many people no longer able to pay their mortgage, there has been a rash of Renters looking for homes.The increase in renters this year over last has increased.
Competition for rental property has picked up because inventory is scarce.
Rents have increased leaving many people stranded for housing.
College students who once had a vast selection of homes to choose from have been doubling up more roommate's.The cost of a rental has increased 20%.
Many investors have decided it`s not longer feasible or affordable to continue paying on a mortgage that is too high.Many have carried these mortgages for over a year. In some cases they`ve been negative from the beginning.
Others,simply walk away because the banks will no longer cooperate or assist them.
In spite of what you`re hearing FNMA and Freddie Mac aren`t doling out assistance.
It`s becoming increasingly alarming when tenants are living in Rental homes and their landlord is being served a "Default Notice" by the lender. Once the Acceleration process commences there`s no turning back.
The housing crisis is in full swing, without some sort of resolution made in the near future, I predict we`ll see an increase of "Homeless" families in the very near future..
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That is good people are finding homes. In metro Detroit we have seen more people renting out homes
Russ,
You`re going see more of the same for next year as well...
If rents are increasing 20%, doesn't that mean that more investors might be able to hold onto their properties, rather than walking away and letting them go to foreclosure? Just wondering why an increase in rent might not lead to an increase in investment.
Penny,
Let me clarify.
Existing rentals have increased. Those able to afford keeping their rental properties or have relo`d for a year are making off.
Others who were speculating are facing a very different story
ARM vs Market rent. They`re unable to continue.
Like anything else there are "winners and losers" .
Your are so right. Foreclosures are not only affecting the owners but the tenants as well. The number of calls to my office from tenants needing apartments have increased steadily over the last 3 to 4 weeks. The majority of the time the reason given by them is that their current residence is in foreclosure.
This issue will not go away.
This housing crisis needs to be addressed not spoken about any longer.
The problem with rentals is the owners can't command rents that compensate for their carrying charges. I just rented out that unit near Nova...it's actually a teacher at the school. There is nothing that will change the housing crisis for a long time. When it was good for owners the buyers were waiting for 5 yrs for a change...now it's the opposite.
Scott. The real truth is in your statement:
In spite of what you`re hearing FNMA and Freddie Mac aren`t doling out assistance.
Fact is, Fannie and Freddie have high paid public relations depts. One thing for sure, facts and truth have no place in the Fannie/Freddie mission.
The rents going up is more do to the credit crisis rather than the housing crises. Lenders don't want to lend money anymore so people are having a much harder time buying a home so they turn to a rental. Supply and demand then dictates that rents go up.
I also think the credit crises is the major cause of the housing crises. If lenders would start lending money again a lot of these people would be able to keep there homes.
I'm an invester and I'm going to need to sell one of my homes because I can't get a loan on it to refinance it when the ARM adjusts. If lenders would stop putting such sudden and tight restrictions on everything we could all pull out of this slump without having to sell everything we own.
Foreclosures are defenitally up but the news reports are mostly exaggerated. The actual percent of homes that have been in foreclosure is less than 0.5%. I know in Utah it is around 0.12%. The news can say foreclosures up 50% but a 50% increase from a very low number is still a very low number.
Jeff Stinson
Property Manager
www.stonebridgerealestate.net
I think now is a perfect storm for buying rental property. The prices are down 30 and 40%. If you could get the financing, you should buy rentals....
It is really a scary scenario. Since I've never worked renters, they are off my radar but you brought up some very interesting facts. Thanks for sharing.
According to RealtyTrac, a company that keeps track of foreclosures across the country, "more than 38 percent of properties in foreclosure through the end of April were classified as non-owner occupied, meaning they were second homes, investment homes or rental property. That's roughly 280,000 of the nation's 720,000 foreclosed properties. The hardest-hit areas are California, Arizona, Nevada and Florida."
On the flip side: As an owner of rental property in California, I have noticed an increase in available rentals not only in my area, but surrounding areas. I was recently notified that my renters who have been in the home for 7 years are now moving out in 30 days. They have found a much bigger, nicer rental for less money. It's not going to be that easy finding new renters especially right now. As in the case when there is an abundance of homes for sale on the market, the same can apply to rentals, people are going to be much more pickier and expect "a bargain."
Scott- I too have seen a number of renters fall victims to their landlord's default on paying mortgages and as a result are tossed to the curb. However many of them, now can find affordable housing and with home prices at near bottom-the incentive to explore thew housing market has spawned a new wave of new buyers.