I think Noreen's post was interesting because it went beyond arguing the individual rent vs. buy decision to look at the dynamics of INVESTING in rental funds vs. packages of foreclosures or distressed commercial property.
Although the underlying dynamics of the rental market may be just as opaque or primed for their own little run-up bubble, somehow the rental market seems less "toxic" right now than the completely dead-in-the-water foreclosure or commercial markets, so that is where the default herd action seems to be heading.
Caveat emptor if the market fundamentals aren't there or if these funds are packaging apartments in "hot" markets with some "ice cold" ones mixed in.
And as we saw in the previous meltdown, I'm cynically wondering if the deals that seem to be available to institutional investors like Google are the same ones that would be available to you or me. Doubt it somehow...
apt-ly put
Scott
4/14/2011 2:31:30 PM
Of course apartments are hot. You can't buy a house when you're in foreclosure or bankruptcy! :-)
I don't understand why so many people would rather be in an apartment than a house. As someone who throws >$20K out the window to a landlord and has nothing to show for it, I'd be happy to be a little underwater in a house that I was on the path to owning and received tax breaks for. Instead, I'm paying for someone else to get those benefits.
Rental rates climb
impactnow
4/14/2011 2:11:15 AM
Is the demand for housing really declining or are less people able to get a house after the loss of creative financing. I suspect a lot of these new renters are products of the huge foreclosure issue still plaguing our country. When buying a house became like buying groceries too many of those that truly should have been renters found themselves owning homes they could not afford. The rental market maybe achieving what should have been its true levels
Re: Housing not the same investment it was afew years ago
Broadway
4/12/2011 9:23:15 PM
Nice piece, Noreen. I'd be interested in seeing what's happening with commercial property rates. My feeling is that they're a long way from feeling any sort of upward pressure. An anecdote: in talking with a financial advisor today, got to talking to him about where my office was. Coincidentally, his office used to be out near mine, in the Philadelphia suburbs. But then about three months ago, they moved back downtown, which should be unheard of! Not only normally would you be paying ridiculous rents for clean office space, but then you have to pay Philly's infamous business privelege tax and income taxes. But it was true ... his firm was able to get such a low rent that they locked it in for multiple years.
Housing not the same investment it was afew years ago
tokyogai
4/12/2011 3:29:41 PM
I think that many who used to be buyers are now willing to rent. With rent, you do lose the mortgage tax deductions, but you also lose the risk of property prices going down. It seems that many feel this is a real risk, so they are willing to rent- which creates more demand.It will be interesting to see if this is a long term trend or just a reaction to the housing market of the last few years.
It is a surprise to know that none of the top 10 has its headerquarter in San Francisco Bay area, where the rent has been one of the most expensive one in the whole country.
The rent around bay area is on rise again after the 2008-2010 recession. The house price is staying firm for those areas close to the business epicenter. But commercial building rent has been down continuously. Hope it will change in near future
Some things never change
TelecomFreq
4/11/2011 11:54:14 PM
I notice more than a few companies on this list from Boston. When I was in college in Bean Town back in the 90s rents were out of control then, I can only imagine what the situation must be like now. None of my friends who still work in the area live even close to the city because it is just too expensive, many of them choose to commute up to an hour so they can find more affordable living.
Looking at the list its clear that these top 10 companies are all located in major cities and for the most part living in the city itself is a very desirable thing, and can catch a premium and that will always keep the prices inflated for those areas.
Rental rates have been rising iin my area ever since 2005. There are some people that are paying as much for their rent of a one/two bedroom apartment, as some people are paying for their mortgage each onth! Thats just absurd! And it seems like the rise is continuing! Now if you can manage to find an affordable apartment then you're in luck, but more than likely, the average apartment dweller will be paying an above average rent each month.
This is an interesting counter-move to the housing market. Eventually it should help bring demand back to housing if rents continue to rise and mortgage rates stay relatively stable. Fingers crossed.
The blogs and comments posted on Investor Uprising do not reflect the views of Investor Uprising, PRNewswire, or its sponsors. Investor Uprising, PRNewswire, and its sponsors do not assume responsibility for any comments, claims, or opinions made by authors and bloggers. They are no substitute for your own research and should not be relied upon for trading or any other purpose.
Tweet This