Posted by Jonathan J. Miller -Monday, September 12, 2011, 6:00 AM
I’ve always viewed the rental market as a leading indicator for the purchase market since rentals are more reactive to changes in the economy than sales are. Rental demand is generally strong across the US right now.
Does this mean higher demand for sales is close behind? No.
The increase in rental demand is not because the economy is improving, it’s because credit is so restrictive right now and getting tighter.
The angle to the rental market story is that people who are unable to sell their home are considering renting them out until the sales market improves. What’s unique in this cycle is that higher quality homes are now on the market for rent causing people on the fence between purchase and rent to consider renting since the available product is of a higher quality.
A friend of mine just sold his big house in our town and decided to rent for a year and look for a smaller home. When he was looking for homes to rent, the market was very tight…just what homeowners want to hear.
A few weeks ago the reporter for this segment, Jeanne Yurman, called me when I was hunkered down in my town library when we lost power at home the day after Irene. Being a good reporter, she “outed” me for using the hurricane as an excuse to work from home since, as it turns out, she lives in my hometown and was perfectly able to go to work in Manhattan. LOL. We had a good laugh about that. On Friday she interviewed me for this segment a few blocks from my house.