21 Jan The Rental Market Continues To Gain Momentum
With mortgage rates at near historic lows and with more than affordable homes available, why haven’t we seen the turn around in the market that we thought we would? December saw a spike in resale homes but this was caused by the news that rates are going up.
Many experts thought that the end of 2010 would be the time for recovery, but it never really happened, even though we did see some spikes in the market due to tax incentives. The market as a whole has not made the come back so many predicted and wanted.
It has become apparent that first time homebuyers are still very skeptical of owning a home right now. Experts will attribute it to job security or lending requirements. One thing that is for certain is that the rental market is reaping the benefits in a big way.
According to a recent WSJ.com article, the last quarter of 2010 saw the apartment vacancy rate in America fall below 7% for the first time since 2008. It is a trend that has been accelerating for four quarters now and there is no sign of it slowing.
Even in the larger, more affluent markets such as New York and Miami, rental rates are increasing. In those markets specifically, luxury rentals are gaining momentum. In fact, some dense urban areas have a shortage of rental properties.
According to the article, there are other factors that are contributing to the trend. A weak job market means less compensation and that includes relocation packages for new employees. Buyers are still holding out for a price they may never get and sellers are waiting for the market to come back. We are in a stage of limbo right now that is causing doubt with buyers, especially those entering the market for the first time.