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Great news for landlords, horrible news for renters – rental market report

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Rejoice, landlords! Sorry, tenants

For some time, we’ve been reporting on the trend toward agents focusing more time on residential leasing as the housing sector continues limping along. Leasing is chic and the stigma around it is slowly fading- people that are fully capable of buying are sitting still or trying out new areas of town while others have no choice and are living in rentals due to foreclosure. Either way, “rent” is no longer a cuss word.

Rental rates have been going up considerably over the last year and it appears it is accelerating, rising at a rate beating most economists’ projections for 2011. A new report released by real estate search site HotPads.com reveals that residential rental listing prices have jumped 6.7% from June 2010 with the fringe listings of studio and five bedroom apartments escalating most rapidly.

HotPads.com says that “this is a telling trend which may indicate a growing demand for rental housing among first time renters and larger families” but we see it more as a supply and demand issue in that studios and very large rental units are less common (low supply) and because rentals of all sizes are in high demand right now, it appears a premium is being set on studios and five bedroom units.

In most cases, the rapid rise in rent has occurred in 2010 rather than a slow increase over the past twelve months. We are seeing consumers flocking to their chosen social networks, flustered that their landlord is screwing them over and are being met with the harsh reality that it isn’t their landlord, it is the entire market. Times have been rough for landlords, is this the time to recoup the losses met since 2008? In some markets, rents have been held down but national trends are allowing an increase as perception of the market is softening.

Rental trends graphed:

According to HotPads.com, the data in the graphs below was calculated based on the median listing price of 500,000 rentals on HotPads across all major U.S. metro areas. Click to enlarge.

What are you seeing in your area? Are any particular type of unit or size of unit rapidly increasing in price over others?

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52 Comments

52 Comments

  1. Joe Manausa, MBA

    June 30, 2011 at 5:52 am

    I've been curious how these rates are rising, even though a glut exists in the "for sale" market. You would think that homes moving to the "for rent" market (due to an inability to sell) would increase supply in the "for rent" market. Do they only measure multi-family in these reports?

  2. Larry Brewer

    June 30, 2011 at 6:59 am

    I see a similar trend here in Nashville. A lot of people are moving to Franklin and Brentwood because of the availability of jobs, primarily in the healthcare industry, but they have a house to sell in another state, and are not in a position to purchase yet. Then they find out that rental property has a one day availability in the area.

  3. Paula Henry

    June 30, 2011 at 7:06 am

    We have the same trend here in Indianapolis, with rentals rates outpacing the cost to purchase. Rentals move fast and I have many online requests for rentals or rent to own. I'm not sure if HotPads is totally accurate though. I've had a few calls recently from people who found a home for rent on HotPads. It was a scammer who list homes for rent from the MLS.

  4. Greg Cook

    June 30, 2011 at 11:37 am

    In Riverside County, CA in almost every city it is cheaper to own than to rent a comparable home.
    Biggest hurdle to homeownership isn't the monthly payment it's having the money for down payment

  5. Joe Loomer

    June 30, 2011 at 2:27 pm

    Let's hope they continue to rise and folks decide it's time to buy!

    Navy Chief, Navy Pride

  6. Lauren Finkler

    July 1, 2011 at 10:24 am

    Hey, great article, but I just wanted to let you know that in the breakdown of the properties, the one-bedroom graph is displayed twice and the two-bedroom one is not displayed.

  7. Ruthmarie Hicks

    July 2, 2011 at 9:08 pm

    Its interesting that this seems to be a national issue. In the past 3-4 months there has been an insanity in the rental market that is driving everyone nuts. Tenant had it good for a long time. They had artificially low rents for several years since the financial crisis and now its payback time. I just had a tenant for the Ritz Carlton and Trump – There were 8 listings no more than 2 weeks old…only 2 were still on the market and one had an offer on it. We used to have an INVENTORY of rentals. Forget that. The prices were enough to knock your socks off – averaging $5000 a month for a 2 BR. That's $60k a year people…with no equity and no tax incentive…TIME TO BUY!

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Austin

Austin tops the list of best places to buy a home

When looking to buy a home, taking the long view is important before making such a huge investment – where are the best places to make that commitment?

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Looking at the bigger picture

(REALUOSO.COM) – Let us first express that although we are completely biased about Texas (we’re headquartered here, I personally grew up here), the data is not – Texas is the best. That’s a scientific fact. There’s a running joke in Austin that if there is a list of “best places to [anything],” we’re on it, and the joke causes eye rolls instead of humility (we’re sore winners and sore losers in this town).

That said, SelfStorage.com dug into the data and determined that the top 12 places to buy a home are currently Texas and North Carolina (and Portland, I guess you’re okay too or whatever).

They examined the nerdiest of numbers from the compound annual growth rate in inflation-adjusted GDP to cost premium, affordability, taxes, job growth, and housing availability.

“Buying a house is a big decision and a big commitment,” the company notes. “Although U.S. home prices have risen in the long term, the last decade has shown that path is sometimes full of twists, turns, dizzying heights and steep, abrupt falls. Today, home prices are stabilizing and increasing in most areas of the U.S.”

Click here to continue reading the list of the 12 best places to buy a home…

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Housing News

Average age of houses on the rise, so is it now better or worse to buy new?

With aging housing in America, are first-time buyers better off buying new or existing homes? The average age of a home is rising, as is the price of new housing, so a shift could be upon us.

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aging housing inventory

The average home age is higher than ever

(REALUOSO.COM) – In a survey from the Department of Housing and Urban Development American Housing Survey (AHS), the median age of homes in the United States was 35 years old. In Texas, homes are a bit younger with the median age between 19 – 29 years. The northeast has the oldest homes, with the median age between 50 – 61 years. In 1985, the median age of a home was only 23 years.

With more houses around 40 years old, the National Association of Realtors asserts that homeowners will have to undertake remodeling and renovation projects before selling unless the home is sold as-is, in which case the buyer will be responsible to update their new residence. Even homeowners who aren’t selling will need to consider remodeling for structural and aesthetic reasons.

Prices of new homes on the rise

Newer homes cost more than they used to. The price differential between new homes and older homes has increased from 10 percent traditionally to around 37 percent in 2014. This is due to rising construction costs, scarcity of lots, and a low inventory of new homes that doesn’t meet the demand.

Click here to continue reading this story…

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Housing News

Are Realtors the real loser in the fight between Zillow Group and Move, Inc.?

The last year has been one of dramatic and rapid change in the real estate tech sector, but Realtors are vulnerable, and we’re worried.

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zillow move

zillow move

Why Realtors are vulnerable to these rapid changes

(REALUOSO.COM) – Corporate warfare demands headlines in every industry, but in the real estate tech sector, a storm has been brewing for years, which in the last year has come to a head. Zillow Group and Move, Inc. (which is owned by News Corp. and operates ListHub, Realtor.com, TopProducer, and other brands) have been competing for a decade now, and the race has appeared to be an aggressive yet polite boxing match. Last year, the gloves came off, and now, they’ve drawn swords and appear to want blood.

Note: We’ll let you decide which company plays which role in the image above.

So how then, does any of this make Realtors the victims of this sword fight? Let’s get everyone up to speed, and then we’ll discuss.

1. Zillow poaches top talent, Move/NAR sues

It all started last year when the gloves came off – Move’s Chief Strategy Officer (who was also Realtor.com’s President), Errol Samuelson jumped ship and joined Zillow on the same day he phoned in his resignation without notice. He left under questionable circumstances, which has led to a lengthy legal battle (wherein Move and NAR have sued Zillow and Samuelson over allegations of breach of contract, breach of fiduciary duty, and misappropriation of trade secrets), with the most recent motion being for contempt, which a judge granted to Move/NAR after the mysterious “Samuelson Memo” surfaced.

Salt was added to the wound when Move awarded Samuelson’s job to Move veteran, Curt Beardsley, who days after Samuelson left, also defected to Zillow. This too led to a lawsuit, with allegations including breach of contract, violation of corporations code, illegal dumping of stocks, and Move has sought restitution. These charges are extremely serious, but demanded slightly less attention than the ongoing lawsuit against Samuelson.

2. Two major media brands emerge

Last fall, the News Corp. acquisition of Move, Inc. was given the green light by the feds, and this month, Zillow finalized their acquisition of Trulia.

…Click here to continue reading this story…

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