Consumers Benefit from a Renter's Market

As the housing market continues to slump, more and more people are realizing that for the near future, they are better off renting than buying. This is a significant departure from the past few years where consumers were obsessive about owning their own homes and building up their equity. However, this is no longer the case. In many locations rents continue to rise but people are finding even these elevated rents are cheaper than what they would pay on a monthly mortgage for a similar property. In some areas, renters are seeing savings of 40 to 50 percent by renting than buying. Steep increases in property values is one of the reasons for this phenonomen in some areas. Today, buyers who were quick to pull the trigger a few years ago are finding themselved with a need to sell. The problem? They are 'underwater' and they need to sell at property prices from two years ago. These people are finding that renters are not willing to pay more money than a home is worth. In short the frenzy is gone. Many renters who qualify for mortgages feel they cannot get enough home for their money, especially when they can rent a comparable or larger home for less cash. As the result of conflicting motivations, experts are quick to point out that the market is neither a buyer's or a seller's market. Instead, it has become a renter's market. Other renters are holding off on the idea of buying because they are concerned that prices have not yet hit the lowest point. They are primarily concerned that if they purchase a home today it may not be worth the same amount just six months from now. They feel it is far more prudent to wait and see exactly where the housing market will land before they consider buying a home. Other renters are concerned about the upcoming hurricane season. Few have forgotten the hurricane season of just two years ago that devastated many areas. Homeowners in those areas, especially those without insurance, have yet to recover. While some areas there is a deficit of rental properties, in others homeowners have recognized the prudency of waiting to sell their homes. They are reticent to sell their houses now when it seems wiser to wait and see when the market will stabilize or pick up. In some cases, homeowners are renting out their homes to the scads of renters waiting to take advantage of the opportunity. You even see rental signs on homes for sale. In these cases, renters accept the reality that the home must always be ready and available for showings, they still see the benefit of renting these homes as worth it. Would-be investors who attempted to get in on the quick profit potential of flipping homes have also discovered that it makes more sense to rent out their properties right now instead of trying to selling them. In some cases, investors are discovering they simply do not have any other options when they must meet mortgage payments every month and are unable to sell their properties. In some cases, this means renting the properties at a loss, creating a negative cash flow. In fact, this situation has become so much of a problem that landlords in certain niche markets are finding they must cut rents in order to create even a small amount of cash flow. These investors have quickly discovered that it is far better to rent right away at a loss than wait several months to try and attain the amount of rent they really need. Although landlords are often upside down on most of these properties, renting them out has proven to be the safest method, at least for now.