Rentals Are a Booming Business
Web sites like Airbnb.com, HomeAway.com, and Craigslist are enjoying a surge of listings from home owners, many of whom admit they are hoping to avoid foreclosure by renting out their properties.
Airbnb.com – its full name is AirBed & Breakfast – is the newest of these sites. Since its founding in 2007, it has grown to encompass rentals in 5,700 cities in 148 countries. The company charges 10 percent to travelers and 3 percent to the home owner.
HomeAway.com charges home owners $300 annually to list a property. It is adding 15,000 new properties each month.
Craigslist is free of charge.
Source: Bloomberg, Scott Hamilton and Anthony Feld (07/20/2010)
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Rents Rise as Apartment Vacancies Fall
Apartment vacancies were down and rents were up last month as people got tired of living in their parents’ basements and rented a place of their own.
Nationally, the apartment vacancy rate was 7.8 percent at the end of June, according to research firm Reis Inc., down from 8 percent in the first quarter.
Rents rose 0.7 percent from April to June, the largest quarterly gain in two years.
The advantage hasn’t returned “completely back to owners right now,” says Hessam Nadji, managing director at real estate firm Marcus & Millichap. “But we’re well under way to see that balance shift back.”
Source: The Wall Street Journal, Nick Timiraos (07/08/2010)
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Study: Homeownership Rate Declines
Homeownership rates are down 2 percentage points from their 2006 peak, but could fall another 5 percentage points in the next couple of years, according to a study by the Federal Reserve Bank of New York.
The study subtracts the number of home owners who are underwater from the official homeownership rate calculated quarterly by the U.S. Census Bureau.
Officially, homeownership was 67.2 percent at the end of 2009, but the report says that effectively the rate is about 62 percent if those home owners likely to lose their homes are subtracted from the total.
Cities cited as having very low effective homeownership rates include Las Vegas, Phoenix, San Diego, Los Angeles, San Francisco, Miami, Tampa, Detroit, and Washington, D.C.
Source: The Wall Street Journal, Nick Timiraos (06/07/2010)
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Rental Search Site Logs Heavy Traffic
Online apartment searches increased 11 percent and phone and e-mail queries rose 17 percent in the first quarter, Apartments.com reported.
Apartments.com recorded 5.1 million visits in March 2010, making it the second most visited month in the Web site’s 12-year history. Typically, the peak season for the rental industry extends from April to August, but activity levels from the first three months of 2010 mirror that of the peak rental season, the online housing search engine found.
“This tells us that renters are doing more than just browsing. They are ready to rent and engaging the apartment communities listed on Apartments.com,” said Kevin Doyle, senior vice president and general manager.
Source: Apartments.com (04/05/2010)
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More Sellers are Turning to Rentals
More people are becoming landlords in an economy where selling a home can be challenging.
The nation’s second-largest home insurer, Allstate Corp., says the number of homeowners converting their homeowners insurance to landlord policies rose 27 percent in the first quarter of 2009.
Jim Bass of Jim Bass Real Estate Group in Frederick, Md., says he has begun offering property-management services for absent owners, many of whom are convinced it will be easier to sell in a couple of years.
Holding on probably isn’t the best answer, says economist Edward Leamer, director of the UCLA Anderson Forecast. Leamer suggests negotiating a short sale instead. “Better to take your losses and move on.”
Another factor to consider is whether renting will reduce or eliminate the value of the capital-gains tax exclusion. Federal tax law requires living in the home at least two of the previous five years to qualify for the full capital-gains tax exclusion when the house is sold. Of course, if there is no profit to be had, then this isn’t a problem.
Source: The Wall Street Journal, M.P. McQueen (09/02/2009)
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