Still leafing though magazines from earlier this year, I found a article I felt was worthy of sharing with you. This just in from Chris Wood in the Multifamily Executive Magazine, January 1, 2009.
A renting vs buying analysis was recently done and released last fall by the Washington, D.C.-based Center for Economic and Policy Research (CEPR). Said analysis sadly projects that “homeowners in 32 of the country's 100 largest metro areas will likely accrue negative equity until the year 2012”. This study, The Changing Prospects for Building Home Equity: An Updated Analysis of Rents and Price of Housing in 100 Metropolitan Areas, also states that “the average New York City homeowner will lose $101,964 in home equity. In Los Angeles, the estimate is $168,069.”
Because of high occupancy and demand, homeowners may have difficulty in the rental market. “Despite the extreme downward pressure in homeownership ... rental vacancy rates remain stable and rents continue to inch up,” said co-author Danilo Pelletiere, a research director for the Washington, D.C.-based National Low Income Housing Coalition. However, this statement is met with disagreement by CA-based research services director, Hessam Nadji. “The apartment market has very little pricing power,” says Nadji of Marcus & Millichap. His studies indicate a negative to no rental growth this year.
To read the entire article, please go to http://www.multifamilyexecutive.com/industry-news.asp?sectionID=540&articleID=837406
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