The Ubiquitous Foreclosure Embraces All

The Ubiquitous Foreclosure Embraces All – Landlords And Renters

April 24th, 2008

The ubiquitous foreclosure is all embracing – enfolding in its grip both the landlords and the renters. Yesterday’s householders become today’s tenants forcing the demand for rented accommodation to rise. The result is inevitable. Rents begin to increase by leaps and bounds as foreclosures prowl across the nation. The situation is grim because the tenants who have been foreclosed cannot get the green signal required to take loans and buy a house. Others are not buying because they are waiting for further falls in the real estate. All this combined is making the sun shine in the rented market.

Statistics tells the story. Vacancy rates are less than last year. The rise in rents is expected to be 5.3% - a jump of 3.1% from the increase recorded in 2007. In some metropolitan areas the rise has gone up by a double digit figure, according to National Association of Realtors. For instance in San Francisco it increased by 14.6% compared to last year. In Seattle the average rise was by 10.3% and in Washington D.C. by 5%.

The number or renters increased by leaps and bounds. In April 2007the jump was higher than the total of the previous five years. 1.2 million families joined the tenants group from 2004 to 2006. The years from 2002 to 2004 had seen a slump in renting. Right now the rental market is very strong with signs that it will get even stronger as the demand for accommodation rises in proportion to increasing foreclosures. Rental markets are hot in Salt Lake City, Nashville, Philadelphia and Austin.

The health of the economy is connected to the rental market. As demands rise there is bound to be a related construction activity. Alreadythis is being noticed in some metro areas. To avoid the cost and hassle of commuting from the suburbs the demand of the renters is focusing on the urban areas.

The factors that are helping to goad on the demand for renting is that potential house buyers are not willing to invest in houses of their own right now. They are biding their time for the real estate to stabilize anticipating further drops. Many are observing a wait and watch policy while continuing to stay on as a tenant. The mortgage market is tight. Loans are hard to get. This acts as a deterrent for buyers. Thus there is a big shift in the national trend from house ownership to rented accommodation.