AZ RENTAL MARKET GAINS MOMENTUM

May 20, 2011 at 10:24 pm Leave a comment

The question “Why rent when you can buy?” seems to be a popular thing to ask renters about their puzzling decision to rent instead of buy. With the current real estate market defined by low interest rates and home prices at 45 to 85 percent off from the peak, it seems foolish to rent. Yet, the reality is, many former homeowners are not in the position to buy a home due to a foreclosure or short sale. In such cases, they have to wait two to three years to buy a new home.
The wave of short sales and foreclosures has resulted in the “Rental Era.” Many homes at heavily-discounted prices are snatched up by investors to rent out. Displaced former homeowners are scurrying to rent. Due to the rental demand, rents are increasing and many rental single family homes and apartments are at zero vacancy.
The Arizona Republic reports that the rental market is dominating the real estate market. This is true, but contrary to the article’s opinion, the rental surge was expected and not a surprise. Where else will displaced homeowners go but rent. Also, the article makes mention that investors are buying foreclosed homes at bargain prices and renting them back to the original owners. I don’t find this type of transaction easy to find.
In a short sale, the seller’s lender prohibits the buyer to rent out the house to the homeowner under the “arm’s length disclosure.” If an investor buys a foreclosure, usually the homeowner has found a new place by the time the house is sold to a buyer — it usually takes four to six months to complete the sale. It would make sense for investors to rent out to the homeowner if the home was bought at a trustee sale. At this point, the homeowner may not have left the house when the turstee sale is completed.
For the full Republic article, go to: http://www.azcentral.com/business/realestate/articles/2011/05/18/20110518phoenix-rental-housing-market.html.

Entry filed under: Arizona Real Estate, Chandler Real Estate, Foreclosures & Short Sales, Phoenix Real Estate, Real Estate Deals. Tags: , , , .

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