moh malekpour
Elite Member
- Joined
- May 25, 2002
- Professional Status
- Certified Residential Appraiser
- State
- California
I don’t know about your market but in my market, there are two reasons for current rent increase due to the more demand for rent than purchase:Steven Santora said:If rents are rising, then all those "speculators" who bought houses recently will have an easier time offsetting holding costs and earning a return.
1-new homebuyers who were ready to buy homes this season are backing up, waiting for a better deal in future as more they wait, the better deal the can get. So, it is in their interest to rent and wait to get the ultimate deal when the home prices go down.
2-many homeowners who sold their homes at high prices and were looking to buy a larger and better homes are changing their minds temporarily so, they are renting and waiting for a short time hopping to buy back their homes for 20 to 30% less than what they sold them. These are smart renters who are renting temporarily for higher profit.
Does this situation help speculators to hang on for few more years? I doubt it because they are not investors; they are flippers and have neither the patient nor the landlord experience to deal with rental properties. They want to get out of this mess now especially those who have adjustable rates.