CharlieTheBroker.com

Mary Jane McGraw knew her foreclosure ordeal was over when a man showed up on her doorstep and told her that her home in Oak Park, Calif., had been sold. She had a month to leave.

McGraw, 66, hadn’t been able to make a mortgage payment for a year but remained in her house regardless, fighting for a modification. Then in March, she said, the man arrived. “He said, ‘I represent the investors who have purchased your home,’” said McGraw. According to a deed later sent to McGraw, the house had been bought by a California-based couple.

The strange visit from an investor liaison notwithstanding, McGraw’s home represented one of millions of foreclosure properties on the market. Despite the risks of buying into a sagging housing market, a small group of investors eye such real estate with cash in hand. And some want a quick flip.

Foreclosure sales represented 26 percent of all U.S. residential property purchases in 2010, down from 29 percent in 2009, the year housing prices were thought to have hit bottom, according to foreclosure monitor RealtyTrac.

While some buy foreclosed homes so they can rent to tenants, others invest in everything from extensive renovations to cosmetic repairs before re-selling the houses for a profit.

“Investors in today’s market tend to be a little more experienced than the ones in the boom, and in a lot of cases sat out the boom because they thought prices were unsustainably high. It turns out they were right,” said Rick Sharga, senior vice president at RealtyTrac. “Now that prices have fallen, they can go out and buy these bargains, and they’re not dependent on lenders to make that a possibility, which is good because loans are notoriously hard to come by.”

Almost 60 percent of people who bought property as an investment last year paid in cash, said Walt Molony, spokesman for the National Association of Realtors. “We discovered investors are definitely going for lower-priced properties,” he added. “The median price of an investment home was $94,000 in 2010, down 10.5 percent from $105,000 in 2009.”

In 2007, McGraw had refinanced the mortgage on her Oak Park property, a 4-bedroom home she bought with a friend for $395,000 in 1976. She had planned to switch to a reverse mortgage in 2009, when she turned 65 and her work-related disability pay ran out.

But McGraw’s birthday arrived well into the housing crash. When her work-related disability pay lapsed, she couldn’t make her mortgage payments.

She applied for a modification under the Obama administration’s pilloried Home Affordable Modification Program. She also waited for the results of a state lawsuit against Wells Fargo for customers who, like her, were given adjustable-rate “pick-a-payment” loans without being told their debt could actually increase.

McGraw was told she didn’t qualify for either reprieve, and bank foreclosure proceedings kicked in. She was one of millions who lost their homes in 2010, when banks seized more than 1 million properties. Limited by her fixed income, McGraw plans to move into the recreational vehicle currently parked in her front yard.

“There’s no place for me to go for $1400 a month,” she said. “So come the end of the month, it’s me, the cat and the dog in the RV,” she said.

Ralph Norton, the man who appeared on McGraw’s doorstep, said he helps investors buy, renovate and sell houses in foreclosure. Norton said the investors he represented planned to spend up to $50,000 renovating McGraw’s house before putting it back on the market. “I want a higher price, so it’s going to have granite counter tops and new cabinets,” Norton said. “It’s going to be so nice, the neighbors will be baking me cookies.”

Norton said, however, that fluctuating property prices meant the money spent on renovations could be almost wiped out by a drop in the local market. “It’s happened to me three times in the last year,” he said.

Unlike Norton’s clients’ plan to sell, most foreclosure investors hold on to the properties as the rental market soars, said Sharga at RealtyTrac. Apartment vacancy rates fell to almost zero in 2010, and rents steadily increased as people started looking for somewhere permanent to live again.

These investors could help the housing market recover, Sharga argued. “If you can enable someone who’s interested in buying 20, 30, 40 properties a year to do so, that gets you through this backlog of distressed inventory a whole lot faster than trying to sell these homes one at a time,” he said

Original Source

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Do you have Anyone looking for Cash-Flowing turnkey rentals with renters already in place in Aurora?  Here are 6 nice ones to choose from.  The work is done, renters are in place and paying.  Fast closings available, the interest rate quoted is Kris’s daily rate from yesterday’s whiteboard.  Plenty of fat left on these bones.  Call me or email for details, none are on the MLS.

ON a recent Sunday afternoon, as filmgoers at the AMC LoewsLincoln Center settled in with their tubs of popcorn and vats of soda to see the new thriller “Limitless,” what seemed like a traditional movie trailer began.

Between the sweeping shots ofManhattan fast-paced cuts showed glimpses of city landmarks, bustling streets, crowded subways and strollers ambling over the Brooklyn Bridge. As the pulse of the music intensified, New York was depicted in constant motion, with clouds racing above the soaring towers, and with one newcomer to the skyline — its undulating steel skin glistening gold in the sunshine — playing a starring role.

As the trailer ended, four simple words flashed onto the screen: “New York by Gehry.”

It was not a teaser for the newest Hollywood blockbuster. The pitch was for the latest addition to the luxury high-rise rental market in the city, a 76-story tower designed byFrank Gehry at 8 Spruce Street, on the edge of the financial district.

The feature film that followed, “Limitless,” explores what happens when someone taps the full potential of his brain. The Gehry building — along with a dozen other new large-scale luxury rental buildings that have gone on the market in the last year —   is testing the limits of the price renters will pay for what developers call “aspirational living.”

Even in a city not known for restraint when it comes to displays of wealth and status the properties — with their tens of thousands of square feet dedicated to amenities like private screening rooms, sprawling gyms and even a dog spa — are something new in the rental market.

The decision by developers to spend hundreds of millions of dollars on rental projects that in past years would most likely have been high-end condos was driven by a number of factors.

In the boom years, developers say, the market was oversaturated with new luxury condo construction. At the same time, and even in the worst period of the recession, rental vacancy rates in Manhattan remained low, never creeping above 3 percent. As lending tightened banks leery of new home construction were more willing to finance rental projects. Then, even that financing dried up. As a result the new mega-rental complexes have the field to themselves, at least for the time being, as few similarly ambitious projects are on the horizon.

More fundamentally people are questioning whether it makes more sense to buy or rent a home in what remains a fragile and often confounding market. Developers are betting that at least for now even those with the money to buy may choose to hang on the sidelines and rent, even if it costs them some very big dollars.

Prices at many of these new luxury rental buildings start as much as 20 percent higher than similar properties already on the market. At the Beatrice in Midtown, for instance, the starting price for studios is more than $3,000 a month; one-bedrooms start at $4,500; and the four penthouses $20,000 per month. Those prices are similar to 8 Spruce Street, where rents start at $2,630 a month for studios and top out at $25,000 a month for three-bedroom penthouses.

MaryAnne Gilmartin, an executive vice president of Forest City Ratner, which developed the Gehry building, said that when the project was taking shape in 2007 including 200 condo units on the top floors was “seriously contemplated.”

“It seemed worth studying because you could create something very special,” Ms. Gilmartin said. But it was the height of the condo craze, before the bust. “We saw the potential oversupply of condos and we were taken aback by it,” she said.

Forest City Ratner had wiggle room, because it had bought the land in 2004, when land prices were less expensive. By 2007 land prices were so high that most developers thought they could make money only by building condos.

“We believed there would not be a tremendous number of new rentals,” she said.

The decision to make the entire building rental, with 901 apartments, now seems prescient. But in the end it will all come down to whether the apartments at 8 Spruce Street are priced correctly.

Ms. Gilmartin said that she believed that upscale rental properties appealed to “a generation of young people who don’t have the same interest in buying,” and people living an “untethered” lifestyle. There are also those who might have trouble securing a mortgage and older people looking to downscale, she said, echoing other developers.

At a time when potential buyers are still worried about the future of the real estate market, developers believe the best way to win tenants in a competitive environment is to offer renters the perks that once came only with upscale condo complexes.

The latest entry into the field is MiMA, a 63-story glass tower on 42nd Street between 9th and 10th Avenues in Midtown Manhattan that started offering rental leases on its 500 apartments last month. Among its list of attractions are exclusive access to the M Club, “a 44,000-square-foot hand-crafted amenity space that caters to and enhances the daily lives of residents.”

Even its arty-sounding name is a measure of its ambition. MiMA, an abbreviation for middle of Manhattan, is an attempt to rechristen a neighborhood long known as plain old Midtown West or, more ominously, Hell’s Kitchen.

While offering ample room for luxuries like a full-size basketball court and a residents-only Equinox gym, Gregory H. Gushée, a senior vice president of Related, the project’s developer, said the units were configured in such a way as to get 500 rentals where plans had initially called for 460. Even though rents start at $3,300 for a small studio, Mr. Gushée said that he was confident that the top-tier service would justify top-tier prices.

“I think there will be a few years of rents just going up because there is nothing being built,” he said.

Renters may be paying more, but they aren’t getting more space in many of the new buildings. Developers say that renters do not make the same price-per-square-foot calculation as buyers, and that smaller apartments — with some studios less than 500 square feet and larger one-bedrooms barely topping 1,000 square feet — will not discourage the target audience. And while computer-assisted layouts have often been employed to make the most efficient use of every inch of space, these buildings frequently provide rooms for giving parties, screening movies and entertaining guests.

MiMA, where renters will start moving in April 15, joins buildings including the 60-story Silver Towers at 610-620 42nd Street with 1,276 rental units; the 52-story Beatrice at 839 Avenue of the Americas with 301 rentals; the sprawling T. F. Cornerstone project that stretches several blocks along West 37th Street with more than 1,000 rental units; and the Ohm, a bit farther south in Chelsea at 312 11th Avenue, a 34-story building with 369 rental units. Additionally, two smaller projects are in the mix, the 101-unit +aRt at 537 West 27th Street and the 89-unit Port 10 at 303 10th Avenue.

All these projects were completed in 2010, the last chapter of a building boom that stretched through much of the decade.

On the Upper West Side, several luxury rental buildings of similar scale also opened over the course of 2010, including the 42-story Aire at 200 West 67th Street, with 310 rentals; the Corner at 200 West 72nd Street, with 192 rentals on 19 floors; the Ashley at 400 West 63rd, with 209 rentals on 25 floors; and the Aldyn, a 40-story building with 136 rental units at 60 Riverside Boulevard. In some of the buildings, like the Aldyn, +aRt and MiMA, condominiums are also in the mix.

Gary L. Malin, the president of Citi Habitats, one of the largest residential rental brokers in New York, said that the roughly 3,000 new luxury rental units on the market in the past year might seem too much for the city to absorb, but in reality were just a drop in the bucket. Many of the buildings that opened in 2010 are already nearing full occupancy, he said.

What all the buildings share are soaring prices.

Yet while the top-priced apartments costing tens of thousands of dollars a month have received a lot of the attention, they make up a relatively small fraction of the inventory.

It will be the leasing of studios and one- and two-bedrooms that will determine the success of the projects, developers say.

For renters like Christy McCullough, who was one of the first to snap up an apartment at the Corner on the Upper West Side, renting simply made more sense than buying.

“We were looking to downsize,” Ms McCullough said in an interview in her impeccably appointed, sunny one-bedroom apartment. One-bedrooms in the building start at about $5,000 a month.

She was so thrilled with the place that she signed a two-year lease; her daughter is also renting an apartment in the building.

When the buildings opened many developers were offering breaks for renters, like paying broker’s fees and a month’s rent for one-year lease, which adds up quickly, given the prices.

The Corner, nearly full, is no longer offering incentives.

Jeffrey E. Levine, the president of Levine Builders, which operates Douglaston Development, which built the Ohm in Chelsea, said that until last year high-end rental projects were taking something of a beating.

If developers had projected getting $65 per square foot, he said, they received closer to $50 per square foot because of the many concessions.

But the tide began to turn in 2010, just as many of the more ambitious projects were coming onto the market. The Ohm is now fully leased and is  concentrating on renewals.

If taking a hit in the beginning by offering incentives helps fill up a building, Mr. Levine said, it is worth it because when it comes time for renewals there is less pressure to offer incentives not only to new renters, but also to those already in the building.

Developers like to keep the monthly rents at the peak of what they think the market will bear, because it is much harder to raise rents than it is to cut incentives.

And in the end even the Gehry building, celebrated by both architectural critics and casual observers for what it looks like on the outside, has to convince people to pay for what is on the inside.

Original Source: http://www.nytimes.com/2011/04/03/realestate/03Cov.html?_r=1&hpw

Readers email me and weigh in on whether it’s a good time to buy or sell.
 

Whether you consider your home an investment, real estate is still a big part of many individuals’ financial lives. Although home equity levels have dropped substantially amid the housing bust, home ownership remains a substantial component of net worth in many households. And even for those who no longer have mortgages, property taxes and housing-related upkeep are often some of the largest line items in household budgets. 

To get a sense of whether property prices in various parts of the country were trending up, down, or sideways, I recently turned to Morningstar.com users for their take, posting a query on the Personal Finance forum of Morningstar.com’s Discuss boards. I also asked them to share thoughts on whether the housing market had affected their personal real estate strategies. Were they waiting for prices to rebound before selling? Had they found attractive bargains amid the wreckage? To read the complete thread featuring views from across the country, click here. 

“No Good News”
Judging from the downbeat sentiment of many posts in the thread, those who have been anxiously awaiting a recovery will have to keep on waiting.  

Poster pquilici summed up the case for staying depressed with this post: “I live in Skokie, Ill., and nothing but uncertainty rules the residential market. Short sales and foreclosures dominate the sales. Prices seem to have a continued downward bias. A potential market killer is increased property taxes to fund teachers’ pensions. Lousy weather. Irresponsible government. No good jobs. No good news.”  

Grasshopper joined the doom squad with this post. “My opinion: Homes will lose value every year for at least the next 10 years. You do not live in a bank or stock portfolio in a bull market. You live in a depreciating asset that costs more and more money to upkeep. Burdensome taxes, jobs that do not pay a living wage, and so on. Oh, the weather is lousy too!”  

Kayaker astutely noted that ongoing housing-market weakness has exacted an emotional toll as well as a financial one: “I live in a gated golf community in coastal South Carolina. Like everywhere else, housing prices have gone down at least 25% to 30%. Some homes here that are 15 to 20 years old have sold for incredibly low prices (40% less than original asking) because elderly owners did not keep them up to date and would not lower their price to compensate; grown kids inherited them and dumped them quickly. New owners have gotten very good bargains and these homes have gone quickly. Fallout has been a small group of people who are angry at everything and everyone in this close-knit community. Whether housing, their investments, familywide financial issues, or a combination, the financial crisis has taken a big emotional toll on a number of retired people in this community.”  

Edit, like pquilici, groused about the combination of diminished property values and higher taxes. “I view the housing market in our area as being depressed, but at the same time our assessors are increasing the property values to pay the ever increasing burden of government funding.”  

Jpluther, whose home market of Silicon Valley has been relatively unaffected by the housing bust, thinks a bubble could yet burst there: “Housing prices [in Silicon Valley] are still completely insane when viewed in terms of rental potential or in terms of median price versus median income. Although we have seen smallish declines, I believe we are still midbubble unless the economy and wages take off in an unexpected manner. A 30% fall from current values would not surprise me at all.”  

The Best-Laid Plans
Several users noted that the ongoing housing bust had affected their own plans to relocate. Latitudes wrote, “About 16 months ago, I thought I was being very smart in buying a new condo in Orlando, Fla., at what I felt was a significantly reduced price, more than 40% below the asking price and about 10% less than the original buyer had paid two years prior. My thinking was with such a good deal on the ‘buy side,’ I could then market my current (and much larger) single-family house for up to two years and still come out ahead.  

“Well, those 24 months are quickly ticking by and despite the fact that I have priced my house competitively in relative terms (and reduced the price three times), I have only had one ridiculous lowball offer in the last year and half. Lots of showings, lots of positive feedback, but everyone still seems to be looking for a deal (that is, a steal). I don’t think the Orlando real estate market (much less the rest of Florida) is seeing much recovery yet. With an overabundance of foreclosures and short sales still in inventory, I just may be watching a well-thought-out plan turn sour.”  

DebbieTrice is also downbeat about the Florida market, noting that Sarasota, Fla., remains hard-hit and could well stay that way, in her view: “Due to a combination of fraud and rampant speculation, more housing units were built at ever-increasing prices in Sarasota during the boom than could have been absorbed in a reasonable time frame. The bust has further increased the unsold inventory because now-unemployed construction workers have moved away. And, of course, foreclosures and short sales on the market have depressed prices even more. This is one of the worst housing markets in the United States, and I suspect it will get worse before it gets better. My guess is the local market will return to normal about two years after baby boomer retirees feel flush enough to buy second homes in Florida. I am one of those boomer retirees who had planned to downsize, but I won’t put my house on the market while it has to compete with foreclosures.”  

Other users echoed Debbie’s sentiment, noting that they’ll hold off on listing their homes until they see a rebound. Poster Chamois wrote, “I am delaying a move to a retirement community until values recover, but I am in no hurry anyway.”  

Ditto for wwgman, who notes that the Phoenix market remains in bad shape. “I am holding off selling and buying another home until the market bottoms.” 

Bargain-Shoppers Holding Off, Sellers Unrealistic?
The sentiment among would-be buyers, meanwhile, corroborates that the worst may not be over in some markets. They’re looking for bargains that haven’t yet materialized. 

Poster Edmund_Dantes, for example, would like to purchase a beach vacation home in Southern California but is waiting for even lower prices before making a move. “Lots of inventory out there. I intend to only submit low-ball offers. Sellers can take it or leave my offer. If they leave it, I will just move on to the next property. Frankly, I am hoping for further weakness for my purchase. My biggest concern is if interest rates surge before I can find a property and lock in a rate. In that eventuality, my offer prices will drop accordingly.” 

He’s also concerned about bidding on homes in a market littered with short sales. “Lots of properties on the market are short sales, wherein the bank allows the deadbeat to continue to reside in the property, without paying their mortgage, until the property is sold. My experience with these [is that] sellers have every incentive to delay sales (including not making the property available for viewing), so they can continue to live rent-free. An additional problem with short sales: The seller’s bank can take their time in deciding to accept or reject an offer. These properties are thus very inefficient to close/buy. On a macroeconomic level, I suspect this will contribute to property markets taking longer to clear inventory and stabilize prices.”  

Jadster, meanwhile, is trolling for bargains in the Denver area but hasn’t yet found prices low enough for his taste. “Housing is still not cheap overall, but I’d buy now if I saw a good opportunity. We have placed some low-ball offers and been rebuffed, so we just move on to the next one. It’s a buyer’s market, and as unemployment and foreclosure issues linger, it should remain so for a while. One example: An older fellow overpriced his house at $400,000, dropped it to $380,000 after a few weeks, then dropped it to $365,000 after another month. It’s still on the market.”  

Poster Fitness has also observed unrealistic sellers in the Denver market: “[I] notice that many homes that are selling are decreasing their prices. Some are less than the prices of 2005 and other homeowners are still unrealistic and have not come to terms that this is not the same housing market of just a few years ago. If Fannie Mae (FNMA

FNMA) and Freddie Mac (FMCC

FMCC) tighten the lending standards even further, the housing market in my opinion will drop faster and further. People with cash and large down payments may be the beneficiaries, and everyone else may be unable to purchase at this time.”  

Olddude echoed the view that some would-be sellers are being stubborn about their asking prices, anchoring on bubble-time prices. “My take on the housing market? The place we want to retire to, the Catalina Foothills outside of Tucson, Ariz., is still one of the most expensive places in the U.S. Most of the desirable homes have been pulled from the market and the homeowners are waiting for a hoped-for recovery. They might die waiting to sell and ditto for me waiting to purchase.”  

TOOOINTENSE is another would-be buyer who’s encountering still-high prices where he lives and works, Nashville, Tenn. “I have looked at purchasing several properties that are in need of light to moderate repair as investments (I am in construction), and none has panned out. The banks are trying to hold out for as much recoup as possible, naturally, but won’t bite on cash offers. Individuals are still in a housing-bubble daze and are staying put or not considering any price reduction. Foreclosures have moderated, but I feel that prices are still too high.”  

WesternMass pointed to a similar phenomenon in his home market, noting that stringent lending standards have contributed to the malaise. “I have been flipping select single-family homes in western Massachusetts for some 20 years. Current pricing is flat, and home inventory for sale is low for this time of year. Even distressed homes are not showing up on the market. We have three ‘Over 55′ communities already approved for construction; however, only one has been built so far and sale of individual units has been slow. The other two projects are on hold until the market starts improving. Seems everyone is sitting on their property until the market improves. The other problem is availability of financing. Local banks and national banks have become very cautious in their lending practices. You need a credit score of 700-plus and have to undertake a tremendous amount of paperwork and close scrutiny to secure financing.”  

BuyerBeWare in Virginia Beach, Va., notes that sellers who hold out for their price may be pennywise and pound-foolish. “Most people who want to sell are hanging on to houses and refusing to price properties to sell. They do not want to sell at a loss even though three to five years from now they will sell at a greater loss. They will also lose all the taxes, maintenance, interest payments to the banks, and other expenses they spent during that three- to five-year time frame.”  

Not All Doomsaying
Yet as pessimistic as some posters were about the headwinds facing the housing market, a handful believe that residential real estate in their community is close to bottoming, if not already on an upswing.  

Kayaker, in South Carolina, noted that, “This winter and spring, real estate sales activity is up quite a bit here versus in 2010; nice houses at reasonable (not fire-sale) prices are selling here now, which was not the case in 2009 to 2010.”  

RTO31607, meanwhile, is seeing signs of stabilization in the Highlands Ranch area of Denver. “From high to low here, prices went down about 15%. They have recovered by a couple of percentage points since the low last year. Some houses are moving; this is a desirable area in which to live. There’s not a lot of action, but there’s some.”  

MrGolf noted, “Prices here in my Sarasota neighborhood seem to be flattening after two years of steep drops.”  

Bitsotree observed that the high-end residential market in Boston is just fine, thank you very much. “In Boston, things are rosy, for the super-rich anyway. In the posh Back Bay neighborhood, there are about 20 condo buildings undergoing complete restorations. If the price of copper is up, it sure isn’t affecting any budgets here. Copper gutters, copper down spouts, copper roof trim. Lavish brick work, lush landscaping, designer windows, and I heard one place was installing a bowling alley for the children. It is obscene but a good example of the trickle-down effect in action; this neighborhood is swarming with carpenters, plumbers, electricians, architects, decorators, and so on. Sooner or later, those people will all have enough money to spend on their own homes.”  

Cincinnatikid, meanwhile, isn’t getting too concerned about the macroeconomic housing climate and is instead letting his own wishes dictate the next steps. “My wife and I are investing in our place–a kitchen and new master bath. We know that we’ll probably not get our money back, but we’re enjoying our house more.” 

By Christine Benz | 04-03-11 | 06:00 AM |

This is just as true in the Denver market.  As a landlord, I have been enjoying this trend.

After reading this, let me help you take advantage of this real estate market.

NEW YORK (CNNMoney) — Renters beware: Double-digit rent hikes may be coming soon.

Already, rental vacancy rates have dipped below the 10% mark, where they had been lodged for most of the past three years.

“The demand for rental housing has already started to increase,” said Peggy Alford, president of Rent.com.

“Young people are starting to get rid of their roommates and move out of their parent’s basements.”

By 2012, she predicts the vacancy rate will hover at a mere 5%. And with fewer units on the market, prices will explode.

Rent hikes have averaged less than 1% a year over the past decade, according to Commerce Department statistics, adjusted for inflation.

Now, Alford expects rents to spike 7% or so in each of the next two years — to a national average that will top $800 per month.

In the hottest rental markets, the increases will likely top the 10% mark annually for the next couple of years, according to Lesley Deutch of John Burns Real Estate Consulting.

In San Diego, she anticipates rents will rise more than 31% by 2015.

In Seattle rents will climb 29% over that period; and in Boston, they may jump between 25% and 30%.

This is a sharp change from the recession, when many Americans couldn’t afford to live on their own.

More than 1.2 million young adults moved back in with their parents from 2005 to 2010, said Deutch. Many others doubled up together.
As a result, landlords had to reduce prices and offer big incentives to snag renters.

We paid cash for our million-dollar home

Now that the recession is easing, many of these young people are ready to find new digs, mostly as renters, not owners.

Plus, the foreclosure crisis continues unabated, and the millions losing their homes are looking for new places to live.

Apartment developers many not be able to keep up with this heightened demand, which will force prices upwards, according to Chris Macke, a real estate analyst with CoStar, which tracks multi-family housing trends.

“There will be an envelope of two or three years,” said Macke, “when the rise in demand for rentals will exceed the industry’s ability to meet it.”
Plus, Alford added, “there’s been a shift in the American Dream. We’re learning from our surveys that a huge proportion of people are choosing to rent.”

They’ve experienced the downsides of homeownership — or seen friends and family suffer — and don’t want to take the risks or pay the higher costs of homeownership.

Where homeownership costs are particularly high, there are many more renters than owners. In Manhattan, for example, only about 20% own their homes; in San Francisco, about of third of the population does; in Los Angeles, less than 40%; and in Chicago, about 44%.

There’s one factor that could rein in rent increases: the huge number of foreclosed homes that could hit the market over the next few years.

In many markets, like Phoenix and Las Vegas, there are neighborhoods filled with recently built, single-family homes going for fire-sale prices. When the cost of owning homes falls well below the costs of renting them, more people will buy.

“That’s always been the biggest competition for rentals,” said Deutch.