This repost comes from William Johnson of San Diego , Ca. He has a really good
point of the future of real estate sales across the country.
All questions and comments should be addresses to him. Thank you
Just What We Need - Increasing Competition For Our Home Buyers
Naturally it depends on what side of Real Estate you are on as to whose Ox may be getting gored but for residential resale homes, the rental market is in greater demand for those that could and likely should be becoming home owners and not tenants.
I guess in many ways this is no surprise to anyone since the administrations own White Paper shifted emphasis from Buying to Investment/Tenant transactions. And with all the cash that has been accumulated, little wonder that a larger share of real estate buyers have shifted from future home owners to the investors.
Economists predict that the rental markets are getting so hot, rents are being driven up dramatically at the expense of home sales with dropping inventory.
I see a time in the not to distant future when rents will have risen so high, that the displacement of those that really need to be renters can't afford the rent. This may sound great for investors and I am sure it is. But if the average working people are suffering from too few jobs and now with increasing rents, we are setting our selves up for a another real estate and housing nightmare down the road- and not that far down the road, by the way.
Instead of home values increasing the average of 3 to 5 percent a year, it is the rents increasing by that much in many areas. The national home ownership rate is now at 65.4 % and dropping. The home ownership rate hasn't been that low since 1997. Are the trends actually changing to accommodate the new economy. It would seem so. The home ownership rate for the younger buyers in the under 35 years old bracket is the lowest its been in 17 years. Most of the college graduates in that age bracket are still paying off years worth of tuition debt.
We need a balance and it appears to me that balance is alluding us and with mortgage writing and qualifications more complex than ever, balance between home ownership and renting is being skewed in favor of the latter.
So much for the American Dream of Home Ownership. "The times, They are a Changing".