House rents up 12% since housing bust started

[keepinitreal]

one of the main price trends keeping the U.S. out of deflation stems from a weak housing market, not from a recovering economy.

http://blogs.wsj.com/economics/2010/08/14/number-of-the-week-insults-and-injury-for-renters/

[justbroke]

Makes perfect sense as the inventory of homes are now on the rental market.

[tobee43]

well, i agree, however, just to be the devils advocate, in this situation the landlords are desperate to fill their vacant properties. as such, many times allowing those they under "normal" circumstances would not rent to, move in.

only to find that within a month or two time period, the renter refuses to pay rent, the courts are siding with the renters so they aren't in the streets, leaving the landlords high and dry. a scary time to be had by all.

[justbroke]

Indeed very scary. I have even seen managed properties that traditionally enjoyed never having an apartment empty for more than 15-30 days... now resorting to concessions of $500 to a month's rent to get people to move in. I clearly remember when I first moved to Florida when there was a glut of inventory for apartments. This was while I was getting ready to have my home constructed. It was such a glut and high inventory, that there were offers of 2 months free or a free washer and dryer! I took the 2 free months.

[jjim120]

[QUOTE=keepinitreal;439852]August 14, 2010
"One of the few bright spots in times of crisis is the way certain things become cheaper. With 30-year fixed mortgage rates and house prices down sharply from their pre-crisis peaks, for example, buying a home has become feasible for millions of Americans."

How is it feasible for millions to buy homes today? With unemployment officially near 10%, unofficially nearly double that, with banks not lending except to those who effectively do not need a loan, with wages dropping precipitously throughout the private sector, and new hires practically non-existent, who in their right minds buys a house and signs up for a 30 year mortgage under these conditions?

[justbroke]

Those in stable career fields who have been employed for many years, have actual savings and can literally put down 20-30% without even blinking an eye. In my neighborhood, many of the homes were bought with cash during the housing boom. The houses in my neighborhood are expensive. There are still people buying them.

I just saw new construction on a 4,000 square foot home in a really nice neighborhood ($750K+). Someone has money.

[tobee43]

justbroke....purchased with cash??? LOL!!! and i'm scared to know exactly what they did for a living?? even in the good days i was lucky to stash a few thousand away! (but then again we had kids). however, i'm certain those that are able to pay 750k aren't too worried about much, even today.

were they (i have never seen this) like the people on the new jersey housewifes show?? LOL!

paying cash of 750K you indeed, needed to have had an excellent job or something...very high up there in the food chain

[justbroke]

I don't know. I didn't pay for my house with cash! Especially for what I paid for my home. I only learned of this fact after having talked to the HOA Manager who told me that others on my street paid cash for their homes. I was shocked, but there are a bunch of people who seemed to have done well.

I lot of people in my neighborhood are executives and I'm sure a few in Financial Services. I bought my home from a person who was in Information Technology, but was an executive. I think compensation packages for executives back then (2003-2008) were pretty good! I had some stock options (NQSO) myself.

However, I am not one of those who paid, or can pay, cash! LOL

[tobee43]

me either...that's for certain!

[tay666]

How is it feasible for millions to buy homes today? With unemployment officially near 10%, unofficially nearly double that, with banks not lending except to those who effectively do not need a loan, with wages dropping precipitously throughout the private sector, and new hires practically non-existent, who in their right minds buys a house and signs up for a 30 year mortgage under these conditions?

IF I had any kind of savings, I would be buying a house now.
I just did a quick check. There are 22 listings in my city for 3 bedroom houses under $40,000. 12 of those are under $20,000.
That is out of 121 total listings in my city.
Most of these are not dumps either. Some need a little work, but are really in good shape.
So, with $4,000 down + closing, I could actually have a better house than I have now, in a better location, with a lower interest rate, and payment, than my current mortguage.

[wnguyen]

paying cash of 750K you indeed, needed to have had an excellent job or something...very high up there in the food chain

This just makes me laugh.

I just got in touch last week with one of my co-workers from my previous job. She said that her boss would get approval from a bank (I guess probably local bank) for a loan of more than $400K if he applied for it but he doesn't need it. I couldn't believe it. If this is true, then the bank will lend $$ to those who don't need it and probably won't lend $$ to those who need it.

[spidge]

To rent my house I would not save enough to warrant walking away considering the tax benefits of a mortgage. So I plan to file a CH13 to strip the 2nd and wait out the value. We always planned to stay as long as the area was still tolerable, upside down or not.