Rentals market back on track

ORLANDO, Fla. – Sept. 28, 2011 – An investor paid cash last month for a four-bedroom, three-bathroom house with a three-car garage in the Lee Vista area and immediately had a pool of potential renters competing to move in.

“I stuck a sign in the yard, put it on the MLS and had two dozen showings within three days,” said real estate agent B.J. Edens of Re/Max Town Centre, who handled the property. “Things are crazy out there … I’m expecting it to continue for a little while until we start to see the loan market loosen up.”

Today’s rental market has the hallmarks of the frenzied housing market circa 2006, when buyers were willing to ask, “Where do a I sign?” before they even walked through a property.

But this is no bubble.

This is the beginning of the correction of the market’s radical over-correction.

Ever since foreclosures started rising, so did the demand for rental properties.

Thousands of former homeowners who either ended up in foreclosure or shed their house in a short sale are frozen out of the buyers’ market until they rebuild their credit. Perfectly creditworthy people are choosing to rent because they don’t want to gamble on values taking another nosedive.

We’re raising a generation of renters who are scared to buy after watching their parents struggle through the housing bust. At the same time, housing prices and interest rates are at historic lows.

All of that adds up to one very important fact that points – finally – to a healthier housing market: Investors can get good enough deals on houses and command high enough rents that being a landlord is no longer a losing proposition.

People are starting to make money in the real estate business again. And that’s a step toward normal in an otherwise depressed market.

Scott Hampton owns a company that manages about 500 rental properties and launched a new division that charges would-be tenants a $350 flat fee just to help them find a home.

“The houses go so fast. We’re finding 70 percent of the people sign up for it,” said Hampton of Hampton & Hampton Leasing & Management Inc.

Hampton, who owns the property management company with his wife, said they have hired seven leasing agents who charge a fee to help tenants secure a property. People are willing to pay because they often have trouble even getting a returned phone call from landlords who are overwhelmed with multiple inquiries from potential tenants.

Another good sign for housing: as rental rates increase, more people who have good credit and can qualify for loans at today’s low interest rates will find it just makes more sense to buy. With rents hovering between 75 cents and $1.50 per square foot, a monthly mortgage payment could be cheaper than rent.

“That will definitely be a factor again,” said Maria Rampy Blanchard, general manager of Olde Town Brokers.

She said the number of rental referrals she receives has shot up and that the good properties get snapped up quickly, which allows some landlords to charge a premium.

“The inventory is low,” she said. “They rent out almost immediately, definitely within a 30-day period.”

And then there’s the newest buzzword in the business, and perhaps the biggest sign that good rental properties are in demand – “foreclosure disclosure.”

Some renters are so desperate for a good property at a reasonable rate that they are willing to sign a waiver acknowledging the house is in foreclosure, and they could be forced out before the end of their lease.

“We actually have forms for that now,” Hampton said.

Source: www.floridarealtors.org
Source: Copyright © 2011 The Orlando Sentinel, Orlando, Fla., Beth Kassab. Distributed by MCT Information Services

UF: Rise in Florida’s consumer confidence

GAINESVILLE, Fla. – Sept. 28, 2011 – Florida’s consumer confidence index rose this month to 64, up three points from a revised mark of 61 in August. However, confidence still remains low, according to the University of Florida (UF) survey.

Of the five components used by UF researchers to measure overall confidence, four edged upward. Expectations that personal finances would rise in the coming year went up five points to 78, and consumer anticipation that the U.S. economy will improve in the coming year rose by one point to 52. There was also a four-point increase to 66 in the overall expectation that the country will see economic gains during the next five years. Confidence that now is a good time to purchase retail big-ticket items, such as laptops and cars, rose six points to 74.

“It is not surprising that confidence rose this month as we get further from the debt-ceiling debate,” says Chris McCarty, director of UF’s Bureau of Economic and Business Research and Survey Research Center, which conducted the survey. “Confidence actually rose this month among both younger and older respondents.”

The only component to show a decline in September was the perception that personal finances today are lower than a year ago. It fell by three points to 50.

According to the survey, Florida’s seniors, whose perceptions accounted for much of the decline in August, remain pessimistic about the economy in both the short and long run. Confidence levels of those over 60 are at “record lows,” McCarty says.

The ongoing national debate over spending cuts and entitlements is only partly responsible for sluggish confidence levels. Florida’s unemployment rate also remained stuck at 10.7 percent for the past three months. In addition, a loss of government jobs along with those in other sectors offset employment gains in a rebounding tourist industry. Moreover, tourism itself could face temporary setbacks if economic troubles worsen in Europe.

Other indicators also affect the perceptions of Florida consumers. The median price of an existing single-family home in Florida went up slightly in August to $137,500. A drop in gas prices since August was a typical market adjustment following Labor Day, McCarty says. Finally, a volatile stock market that sharply declined in July and took dramatic swings in August and September could also be taking a toll on confidence.

McCarty expects consumer confidence to remain lackluster until next year, given the looming deadline of Nov. 23 for the deficit reduction plan by the U.S. Congress’ super-commission. He thinks it will reignite debates over federal spending and again shake consumer confidence.

The UF survey measures the mood of consumers 18 or older, living in households, who were randomly telephoned Sept. 11-22. The preliminary index for September was collected from 410 respondents.

The index is benchmarked to 1966, so a value of 100 represents the same level of confidence for that year. The lowest index possible is a 2; the highest is 150.

Source: © 2011 Florida Realtors®