As a property management company, we work with people facing foreclosure to find suitable rentals they can qualify for. This used to provide us with a steady stream of recently foreclosed applicants looking for good quality rental homes. Lately, the supply of these applicants appears to have dwindled. I suspect the reason has to do with our government and their stimulus package. I say "their" as I certainly did not vote for it, nor do I think it is going to be good for the market.
In the last month, I have spoken with at least 6 people that stated they were remaining in their homes, not making mortgage payments for 6 months or more, and their bank had not even called them about it. These people are clinging to the hope that our government will ride in on a white horse, forcing the evil bank to forgive the past due balance on the loan, while slashing the principal balance and saving the homeowner forever, happily ever after, etc.
If the government would just get out of the way and stop giving false hope and empty promises, the market could do what it was designed to do- correct itself. Those who had no business becoming homeowners or bought more home than they could possibly afford need to step back into a rental, helping to solve our vacant inventory problems and drive rents back up to where they should be, which in turn attracts more investors to buy investment properties. The market was destabilized be de-regulation- the government played a major role in the predicament we are facing. Why would anyone think the ones that got us into this mess are the most qualified ones to get us out?
The one glimmer of hope I had for the stimulus package was the tax credit for home purchase- until they decided to place limits on it (1st time homebuyer). Does anyone believe there are really enough 1st time homebuyers out there right now to jumpstart the market? Imagine how much more effective this plan would have been if the offer extended to any home purchaser- investors with smart money would flood back into the market making a drastic impact. I think it is just another example of the disconnect between our leaders and the people. We are fast becoming a nation divided into two groups- the haves and the have-nots. The "haves" are made up of government officials and big business which fall under the category "cannot be allowed to fail". The have-nots are the rest of us.