Rental market boost bodes well for housing market recovery

Vicki Johnson | Vicki Johnson Real Estate

Rising rental prices bode well for housing market recovery.

By Vicki Johnson

The real estate market has taken an undeniable hit in the wake of the recession; but a recent report from the Los Angeles Times notes a silver lining in the form of thriving rental activity – and with it, a sign of hope for the long-awaited housing market recovery As home prices remain in decline and potential homeowners struggle to secure mortgage loans, rentals remain an attractive option for many would-be buyers. As Zillow chief economist Stan Humphries tells the Times, “It is an issue of supply and demand,” with the foreclosure crisis operating as “a giant engine converting owner households into rental households.” This in turn has spurred a rise in rental prices – and subsequently, an uptick in investment activity on the part of hedge funds, government entities and even individual buyers that promises to fuel market stability.

Zillow estimates show average national rental rates rising 3% between January 2011 and January 2012, with concentrated increases falling in areas of the country with stronger than average job growth. According to Esmael Adibi of the Chapman University A. Gary Anderson Center for Economic research, job growth creates household formation, which in turn fuels housing demand. Therefore, as San Diego employment numbers slowly rise, so too will the need for rental and real estate inventory. And while this may result in unpleasant increases in rental rates for some tenants, it will also spur the investment activity needed to get foreclosure properties back on the market in the form of rental units – a necessity for the equilibrium required to encourage broader recovery overall. In addition, individuals and families with the means to secure a mortgage will see buying as both more attractive and affordable in light of rising rental rates, adding yet another boost to the housing market.

Expert guidance amidst market changes ensures smooth transitions and great values

Here in San Diego, our enviable proximity to coastal cities, urban centers and thriving universities contributes to diverse rental and real estate options for buyers, sellers and investors alike. As an experienced Coldwell Banker real estate agent currently serving La Jolla and surrounding San Diego communities, I am intimately familiar with all of these markets – and I can offer clients the guidance, marketing expertise and negotiating savvy to maximize value and ensure a smooth transaction from start to finish. Whether you are looking to rent or buy a home, or to purchase investment property, I can help you find the right listings and make financially healthy choices for the long haul. To learn more, peruse La Jolla real estate listings or schedule a consultation, visit me online: www.vickijohnsonproperties.com.

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Posted by Social Media Staff on Mar 25, 2012. Filed under Columns, Sponsored Columns, Vicki Johnson. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry

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