Guest Post: 1.2 Million Households Disappear, Putting Downward Pressure on Home Prices and Rents

[Joanne98]

As I wrote Monday:

In really bad times, people who are evicted from their houses will not rent. Instead, they will move in with friends or family for some time.

As the Wall Street Journal explained last October:

Driving the change is the troubled employment market, which is closely tied to rentals. With unemployment at 9.8% — a 26-year high — more would-be renters are doubling up or moving in with family and friends during periods of job loss. Landlords have been particularly battered because unemployment has been higher among workers under 35 years old, who are more likely to rent. Nationally, effective rents have fallen by 2.7% over the past year, to around $972.

As Zack’s Investment Research writes:

A smaller percentage of Americans owned their own homes in the 4th quarter of 2009 than at any time since 2000. In the 4th quarter 67.2% of Americans owned their own home, down from 67.6% in the third quarter and two full percentage points below the peak set in the fourth quarter of 2004.

As the first graph below shows (from Calculated Risk) …:

http://www.nakedcapitalism.com/2010/04/guest-post-1-2-million-households-disappear-putting-downward-pressure-on-home-prices-and-rents.html

[TwilightGardener]

1. Well, how are you going to get approved to rent, if you don't have enough

income to afford it, and your credit is shot through foreclosure? You are basically going to these landlords saying, "I can't pay my bills--rent to me!" The only alternative for lots of people IS to move in with family and friends, sadly.

[Donnachaidh]

2. In my area the rents are going down and the landlords aren't nickel and diming tenants as much

That's a GOOD thing.

Renters actually are having an easier time here, and have much more to choose from. Some of the more luxury places are renting at 75% or less than what they were asking just one year ago.

The complexes that are suffering are the big corporate owned properties that think that they can still maintain high rents, charge for everything, and treat their tenants like cattle. They don't *want* to have to change with the times - they've had it good too long.