It's as simple as supply v. demand. Currently, the local rental market is booming with tens of calls a day coming into our office as renters are on the prowl for suitable temporary housing. With the advent of foreclosures, short sales and job loss many folks who previously owned are looking for rental property in order to secure a roof over their heads while waiting for credit to rebound. These are a new breed of renters, used to the luxury and quality of life afforded by home ownership. In our market, which is historically made up of rental homes under $1000 per month, there are not homes suitable for the finicky tenant looking for a place to establish their family after a tumultuous couple of financially challenging years. These renters want cleanliness, quality, space and established neighborhoods that FEEL like home and unfortunately these are few and far between.
The upside is that as prices continue to settle, we are finding more homeowners opting not to sell before moving to that next job or home. This may in fact give rise to a larger availability of properties to choose from and allow high-end renters choices beyond the edges of college campus'.
As rents rise it has been predicted that housing price declines will slow and help to up-end the market.
www.calculatedriskblog.com/2011/04/forecast-rising-rents-to-slow-house.html
So as long as this cycle works itself out it may be in fact a good thing for real estate. On the other hand, if continued intervention and regulation from outside financial and governmental entities occurs, we may not experience the possibility of current homeowners opting to rent rather than sell due to fear of not being able to purchase without selling.
Much remains to be seen but the notion that you can hold on to your current home, allow the market pricing to adjust upwards AND purchase your NEXT home while rates are low, mortgage programs available and inventory is great is something that could help to shore up our shaky real estate foundation.
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