Real Estate Blog - Will The Mortgage Defaults Create New Rental Demands

Home : Blogs : San Diego Real Estate Voice authored by William Johnson : San Diego Real Estate Voice by William Johnson GRI CRS e-PRO

Will The Mortgage Defaults Create New Rental Demands

With Mounting foreclosures taking place around the US, the amazed borrowers need housing and their only recourse is to look to the rental market.

Will the increase demand be big enough to cause new shortages in available rental properties.

Will we see rents increasing in the already near full capacity rental markets in the large metro areas around the US, where housing costs still remain at all time highs

With more competition, will the landlords be looking to seize on the greater opportunities of increasing demand.

What affect on the credit worthiness will a foreclosure have on the new tenant prospects and will the landlords be willing to take on the high risk applicants who have just been foreclosed on and whose credit has been damaged?

We will have to watch as the foreclosure continue and the answer to these questions will unfold as the new headlines around the country.

Posted by San Diego Real Estate Voice authored by William Johnson on 08/30/2007 04:12 AM

Comments (14)

rental market, foreclosures, landlords, credit worthiness

14 Comments on Will The Mortgage Defaults Create New Rental Demands

AUG

2007

William: This is a serious problem here! Our rental market is so nuts and has been since spring. I noticed that rental pendings are sharply rising in the last week. This is making it very difficult to show properties. Instead of telling potential renters to send me 5-7 of their favorites, I am requesting they send 10 and that leaves on average 3 available properties to show. This is when the search is executed THAT WEEK. I may have to bump it up to telling them send me 12-15 of your favorite properties. This could quite possibly be a squeeze for people to get situated prior to school starting so watching stats the next couple of weeks could be key.

WJ.

It`s already happening. It will cause the RE market to factor in this new turn of events.

and so the cycle of life in the real estate world continues.

Thanks for bringing this segment of the RE world into light. This is good information to give to all my investor clients wanting to landlards.

The cycle is turning to buy and hold properties. There are many people that want to be in a home but can not buy one.

I'm sure that many are at least thinking of taking this avenue. I know one family, though, who has no choice.

One of the most amazing things about active rain is gaining insight into other people's markets -

I am in Atlanta and while we are seeing a "tougher" market, It is nothing like you guys in CA, FL, NV, etc.

I am finding it interesting to see that here we are seeing more sellers open to lease purchase and other means of getting people into houses that are creative, but not quite as risky (in my opinion) as the 100% no doc loans. At least when they are working with honest professionals.

I feel for you guys in markets where rent prices aren't comparable to monthly payments on a 30 year fixed. We have several agents and lenders who have relocated to Atlanta from these areas - mostly Florida. I hope that your market "adjustments" wrap up sooner than later!

If anyone wants to relocate to the Atlanta area, feel free to get in touch!

Hi William,

In one word, YES. I think our rental demand continues to increase. We've always had a shortage of good rental housing and now prices are higher than ever. My last lease was a few weeks ago was a 1976 house 4/3 we leased it for $3,100 a month. It's free and clear so the retired owner has a nice little income stream on this one. BTW, the tennant really wanted this place paid 6 months in advance.

As for forecloure credit issue, yes (depending on the situation) it could be an issue.

Bill, we are seeing tons of rentals here in Ann Arbor. So many in fact, we had our board draw up lease forms, applications, inventory lists and permission to check credit.

Hi Bill nice post, Grand Rapids is the second largest city in Michigan and the rental market is starting to see some of the impact already. As Missy mentioned rental leases are not becoming part of our daily routine.

AUG

2007

Oh, yeah.....the rental market will---and already is, here----get very hot.

William, Something I have seen with this is that Investors buy a house as a rental.. But what did they pay for it? When they go to rent, they have to have at least the monthly mortgage, insurance, and tax payment built into the rent.....and in my area this can be a problem.

William, The rental boom is alive and well in Hemet, CA. Last weekend I took an investor from San Diego and he put in offers on two separate rental houses. He is determined to buy more. so we will see what happens. Now Have a Blessed Day, John Occhi, Hemet CA REALTOR Mission Grove Realty

Hi John, Thanks for your comments. Could I ask a favor of you? I have tried to contact ActiveRain, and I can't get their attention. My site on ActiveRain is messed up . The links are missing , tags missing and the code is definitely mixed up. But it can't be fixed from this end, and I can't seem to get anyone to respond. Do you know of a way to reach someone? No Spell checker either and I can't correct anything. It even looks different at this end. The Internet Explorer activity bar at the bottom of my computer indicates that I am not fully in the site. The messed up code is only allowing access to some of the functions.

SEP

2007

Interesting post William. At some point, if a lot of potential first time homebuyers cannot get loans, they will be forced to stay in the rental market. Others that are losing their homes are likely to be forced into the rental market as well. If landlords start getting greedy and going for the most money, but not the most qualified tenants, they will be doing themselves a disservice, as the best tenants are the ones that pay their rent monthly and take care of the property. There always seems to be a shift in one direction or another, and the next one may very well be the rental market.

This blog does not allow anonymous comments