Home sales improved significantly during the first half of this year, but with home ownership...

Home sales improved significantly during the first half of this year, but with home ownership still hovering near 15-year lows, where is all the supply going? The answer is simple: real estate investors. Sales of distressed properties are hot right now, largely due to a dwindling supply of homes for rent. Rental vacancies in fact fell to their lowest rate since 2001. The rental market his hot and getting hotter, and investors are rushing to cash in.

Comments (7)
  • montanamark
    , contributor
    Comments (1456) | Send Message
    the rental market has been "hot" for the last 2 yrs. REITs/developers and professionals have been building and investing in apartment complexes at a rapid pace. wonder to whom all these single family home "investors" will rent to when there is stiff competition from apartments - many new with all the amenities of a hotel
    27 Jul 2012, 07:19 PM Reply Like
  • Mike Maher
    , contributor
    Comments (2863) | Send Message
    Building permits are still well below where they had been in the NYC area for apartments, and rents are rising very quickly. Strong metro areas should see rent growth at trend for the next couple of years at least. I agree with your point that the amenities of apartment complexes built in the last 10 years make them ideal to most single family homes, but in many markets in the US, rents are likely to rise for another few years.
    28 Jul 2012, 12:18 AM Reply Like
  • DeepValueLover
    , contributor
    Comments (11220) | Send Message
    The great thing about this red-hot rental market is that there is no end in sight:


    -Zero job growth
    -Zero wage growth
    -Rock-bottom interest rates
    -1/3 of all homeowners underwater
    -Banks demanding 20% down and near perfect credit to buy
    -Dwindling supply


    Landlords are making out like bandits in most markets!
    27 Jul 2012, 07:40 PM Reply Like
  • lostalloncoal
    , contributor
    Comments (373) | Send Message
    Come to bay area. You will feel depressed to see rent price. Like 2k for a small studio. Its highest here ever.
    27 Jul 2012, 08:29 PM Reply Like
  • azblackbird
    , contributor
    Comments (358) | Send Message
    Yep... here in the Phx area, we have a shortage of mid priced homes as all the foreclosures have pretty much been bought up by investors. A buddy of mine used to camp out on the courthouse steps and would often buy homes for cash and then flip them on the spot to investors who didn't have the immediate cash but had bank funding in hand. He was making an easy $30k a week. Now it's all dried up and has been for about the past 6 months or more. Another buddy of mine has been in his million $$$ home for over 2 years without making a single payment. I think his time will soon be running out.
    27 Jul 2012, 08:13 PM Reply Like
  • outbidu
    , contributor
    Comment (1) | Send Message
    Played the flip game here in Reno untill blueblood connected investors showed up with 2% money. Not sensible to use real money to compete with "walk away if you lose money" that costs next to nothing. I expect that this same process plays throughout the economy - connected business with cheap money drives away small business.
    28 Jul 2012, 07:14 AM Reply Like
  • NIRP
    , contributor
    Comments (569) | Send Message
    True! Most of the cash money has dried up. Govt set up big money to come in now. Banks not flooding the market. Foreclosures slowing down. Banks, HUD and Fannie asking more money and taking their time selling. They are concentrating on owner occupant. Banks doing more short sales has helped prices stabilize and increase. Vast majority of sales here in north east Ohio are bank owned and short sales. This will be a slow process over many years unless the Govt. or venture capital comes up with a plan to move these homes....Blackstones working on it. Landlord in this area....forget about it. Too little return for the risk for me. Been out of that for ten years. Tenants....not much out there but the best of the worst. Anyone who does rentals works for their money.
    28 Jul 2012, 04:07 PM Reply Like
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