21 Apr Will the Rental Market Prevail?
A wise client of mine has said many times: the government had one good finance program. Congressional wisdom said, if we have one program working well, why not three? Right! So was born Fannie and Freddie.
Although the expansion has made home ownership easier and a profit for investment institutions, insurance companies, and developers/builders, it wasn’t 100% positive for America – thus the foreclosure rate and an economy that almost imploded a year ago. But we rode the tide; and it was great for a lot of people, including Idea Associates.
Regardless of the current state, I think that renting will be popular for many years due to these and other circumstances:
- It will be harder to get financing if you have any kind of credit issues.
- Reduced options available for lending.
- Social change – Generation Y doesn’t want to own as “early” as other generations and will delay home buying.
- Baby boomers now tend to rent in the south and keep their home in the north to experience seasonal comfort.
- Society as a whole has changed – people are mobile and want to be able to move for jobs and other reasons.
- The real estate market is snapping up apartment buildings everywhere, giving investors the impression that this is a hot market. Does that mean we’ll soon see all those condo conversions convert back?