Real Estate Trusts
Rental housing benefited most from the recession.
Frank Nothaft, who is now chief economist for CoreLogic after years in that position with Freddie Mac, calls the outcome of the recession, “A vibrant rental market.”
Apartment vacancy rates are at their lowest levels since the 1980s, Multifamily rental construction is the healthiest in more than 25 years, rents are up, and the property values of apartment buildings are at or above their prior peaks.
High-rise apartment buildings are not the entire picture; in fact they provide only 42 percent of the rental market. Two-to-four unit buildings provide 18 percent. The foreclosure crisis created both a supply of and demand for single-family rentals. Hedge funds bought distressed properties and turned them into rentals – some 3 million single family detached homes, many once owner occupied, became rentals between 2006 and 2013, an increase of 32 percent. Single family homes now comprise 40 percent of the rental stock. Many of these homes are now occupied by households who exited homeownership as a result of foreclosures, short sales, and bankruptcies.
The increase in single family rentals is most dramatic in the areas hardest hit by the housing crisis.
I believe that this will change as more people come back into the market because of the time that has passed since their foreclosure, short sale or bankruptcy. Many more people will be eligible to buy in the near future.
I am already seeing a lot of rental signs in my area that stay there for longer than a month. This was not true last year. What are you seeing?
