Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
I assume it's common knowledge so I won't post links but it seems rentals are booming while owner occupied housing is steeply down since '08.
A popular newer commodity on Wall Street are "Rental backed securities"... basically large numbers homes (mostly foreclosures) bought by big investors, turned into rental properties, bonded and secured by the rental income of those properties.
This new dynamic has implications for potential homeowners as investors generally focus on the low to middle spectrums of the market while new buyers who need mortgages are shopping the same market and just can't compete with them. Besides that, investors competing with each other tend to drive low-end housing prices up too, pushing even basic single family homes out of reach financially for many.
Another interesting trend that I'm seeing in my area is subletting single rooms of single family homes as a cheaper alternative to renting an entire house/apartment. Sure, it's an old idea in general but it wasn't common here in SLC... now there are pages and pages of internet advertisements for rooms. Anyway, it goes to show that housing is too expensive and generally out of reach for lots of people.
This is stuff I would never have imagined back when I was buying my first house after a couple years of renting (back in 2001). It's also not too hard to imagine a scary future where massive corporations own the majority of the homes within the suburban landscape and rent them out to people who are expected to take on all the responsibilities of home ownership (maintenance, upkeep, utilities, ect) with none of the benefits.
And when such groups end up owning an entire neighborhood which they probably purchased at fire sale prices they can easily bulldoze swaths of low density housing, lobby for zoning changes and replace large areas with more profitable high density rentals.
What are your thoughts? Is private home ownership the "glue" keeping the suburban system alive (even more than transportation?) Do we loose something important if America becomes a place where the vast majority rent and would a "renter nation" result in the dismantling of the traditional American suburban landscape?
Location: East of Seattle since 1992, 615' Elevation, Zone 8b - originally from SF Bay Area
44,570 posts, read 81,147,605 times
Reputation: 57788
While that might be the trend nationally, it varies greatly depending on where you are. I live in a very suburban city east of Seattle with 50,000, soon to be 60,000 with an upcoming annexation. There are at the moment 3-4 developments under construction, all 2,800-4,000 sq single family homes, no apartments or condos. Many are being offered with dual masters for the multi-generational families, but it would be difficult if not impossible to find a rental house. In fact, most HOAs will not allow them to be rented. At starting prices over $800,000 the new homes are selling, though not as fast as the existing homes at $500-700k which are getting multiple offers over asking.
Across the bridge in Seattle, older single family homes are being bulldozed and replaced with new 2-3 unit buildings, and a pending city ordinance will allow more of that. Even there, in a fairly big city, most will be sold as condos, not rented however. The developers buy the old house for $500k, build, then sell for $600k each unit.
I know of a neighborhood where the majority of houses are rentals. The city has a problem with lawns not being mowed. Tenants think the landlords should do it, apparently the lease says the tenants should.
Blackstone and others were what stabilized a lot of neighborhoods and put them back on the path to recovery very quickly. They're mostly out of the market here as prices are already back above where they can't rent them for more. They're still pretty big in the Bay Area though where there's more appreciation speculation than out here.
Really, Blackstone-type Wall Street investing is more hitting middle-class neighborhoods. They don't really go into the slumlord market where you're worried about lawns not getting mowed and front yards turning into junkyards, at least as far as I know. There's a couple where I live that got bought up like that and they've done a fair amount of work on them. I mean nothing real fancy but their cared for and they're doing a good enough job screening the tenants.
I live in a suburban, ranch house neighborhood where a small but significant portion of the houses are rentals. The tennants are mostly minorities, but pretty much all of them do a good job maintaining their houses, and they aren't obnoxious or anything, you really can't tell which houses are rentals and which are owner occupied. I'm fine with it, our neighborhood is still considered nice and they integrate well with the neighborhood.
I assume it's common knowledge so I won't post links but it seems rentals are booming while owner occupied housing is steeply down since '08.
A popular newer commodity on Wall Street are "Rental backed securities"... basically large numbers homes (mostly foreclosures) bought by big investors, turned into rental properties, bonded and secured by the rental income of those properties.
This new dynamic has implications for potential homeowners as investors generally focus on the low to middle spectrums of the market while new buyers who need mortgages are shopping the same market and just can't compete with them. Besides that, investors competing with each other tend to drive low-end housing prices up too, pushing even basic single family homes out of reach financially for many.
Another interesting trend that I'm seeing in my area is subletting single rooms of single family homes as a cheaper alternative to renting an entire house/apartment. Sure, it's an old idea in general but it wasn't common here in SLC... now there are pages and pages of internet advertisements for rooms. Anyway, it goes to show that housing is too expensive and generally out of reach for lots of people.
This is stuff I would never have imagined back when I was buying my first house after a couple years of renting (back in 2001). It's also not too hard to imagine a scary future where massive corporations own the majority of the homes within the suburban landscape and rent them out to people who are expected to take on all the responsibilities of home ownership (maintenance, upkeep, utilities, ect) with none of the benefits.
And when such groups end up owning an entire neighborhood which they probably purchased at fire sale prices they can easily bulldoze swaths of low density housing, lobby for zoning changes and replace large areas with more profitable high density rentals.
What are your thoughts? Is private home ownership the "glue" keeping the suburban system alive (even more than transportation?) Do we loose something important if America becomes a place where the vast majority rent and would a "renter nation" result in the dismantling of the traditional American suburban landscape?
I understand your concerns. Much has been made of the Millenials not wanting to buy houses.
Lately there is talk about banks loosening their mortgage standards since they have become so high- if this happens, we will see more buying. Right now it does seem like buying is for the wealthy and previous homeowners in many areas. Renting forever, for most people, does not build wealth.
Your point about corporations owning the housing goes back to feudal times. Let's hope we don't regress to that point and can recover more of the middle class.
I live in a central city neighborhood where over 90% of the homes are rentals and apartments, although most people look at my neighborhood and assume it's all single family homes because the buildings are small-scale (2-3 stories) and a lot of the rental units are either hidden (alley units) or designed to look like SFH units (duplexes-sixplexes.) It means something of a lack of long-term neighborhood stability because renters tend to be transient, but there are enough owners to put pressure on rental agencies/apartment owners to keep their properties looking nice. The neighborhood was built way before HOAs. New construction is mixed--lots of apartments and some ownership housing, the trend seems to be a bit more toward ownership in that it's maybe 15-20% ownership vs. 80% rental instead of almost all rental.
Why would it when that is where people want to live. Where I live its hard to find a rental in burbs ;easy in nearby city. But most new apartment complex are being built on outskirts of burbs where legal for multi family. As higher interest rate are seen the house buying is picking up but still qualifying is tight as ever with Dodd/Frank rules. Dodd/ Frank basically requires lender to keep more of their loans and do more diligence on who its they lend to and that isn't going to change. Geithner said the treasury wants home ownership to reduce to historic 65% levels for security of the system. Thus Dodd/Frank rules. Dodd/frank protect borrowers by tighten who can borrow which eliminates risk to individuals and system on defaults.
I assume it's common knowledge so I won't post links but it seems rentals are booming while owner occupied housing is steeply down since '08.
A popular newer commodity on Wall Street are "Rental backed securities"... basically large numbers homes (mostly foreclosures) bought by big investors, turned into rental properties, bonded and secured by the rental income of those properties.
This new dynamic has implications for potential homeowners as investors generally focus on the low to middle spectrums of the market while new buyers who need mortgages are shopping the same market and just can't compete with them. Besides that, investors competing with each other tend to drive low-end housing prices up too, pushing even basic single family homes out of reach financially for many.
Another interesting trend that I'm seeing in my area is subletting single rooms of single family homes as a cheaper alternative to renting an entire house/apartment. Sure, it's an old idea in general but it wasn't common here in SLC... now there are pages and pages of internet advertisements for rooms. Anyway, it goes to show that housing is too expensive and generally out of reach for lots of people.
This is stuff I would never have imagined back when I was buying my first house after a couple years of renting (back in 2001). It's also not too hard to imagine a scary future where massive corporations own the majority of the homes within the suburban landscape and rent them out to people who are expected to take on all the responsibilities of home ownership (maintenance, upkeep, utilities, ect) with none of the benefits.
And when such groups end up owning an entire neighborhood which they probably purchased at fire sale prices they can easily bulldoze swaths of low density housing, lobby for zoning changes and replace large areas with more profitable high density rentals.
What are your thoughts? Is private home ownership the "glue" keeping the suburban system alive (even more than transportation?) Do we loose something important if America becomes a place where the vast majority rent and would a "renter nation" result in the dismantling of the traditional American suburban landscape?
That's because liquidity froze up in 2008 and people could not get loans, little to due with demand from consumers.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
