Tag Archives: Rentals

Rental prices

107 Summit Rd

107 Summit Rd

I don’t spend much time on rentals, dipping into that market mostly to accommodate clients who want a short-term stay while building or looking for a house to buy, but my general impression and experience has been that rents are way down from a few years ago. So this reported rental today surprised me: $10,000 per month for a renovated but small home on the railroad tracks in Riverside. Wow. At that rate, investment properties could start making sense again.

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Rent vs. sell?

A number of readers have sent in this link to today’s Bloomberg article, written by my friend Oshrat Carmiel, on spec builders who are renting their creations when they can’t sell them. The story starts with the lady who built 63 Maple Avenue, discussed here from time to time, who finally threw in the towel and rented the place out for $13,000. Her carrying costs are $15,000, but she hopes to make up the loss when she puts it back on the market next March for $4.9 million, $500,000 higher than it was when it failed to sell this year. Good luck with that, ma’am. As I’ve written before, the house is built below grade on a very busy street with cheap(er) houses behind it. Neither of those conditions will change in the next nine months, so why should its price? The place will be older, used, and otherwise the same.

Carmeil closes her report with this quote, which I think nicely sums up the delusions of these builders:

Renting may not be wise for owners who eventually want to sell, said Mark Hanson, president of M. Hanson Advisors, a housing and mortgage research company in Menlo Park, California.

“It’s really doing nothing but delaying the inevitable,” Hanson said. “These houses are not going to double in price.”

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So this is what my fellow realtors have been eating

I thought I’d check up on the current rental situation. We have 441 rentals (condos, co-ops, single family) on the market, ranging from $950 to $55,000 a month for a beautiful house at 414 Round Hill Road. In the past 90 days 152 have rented, with a price range of $1,200 (acc. apt. on Huckleberry Road, off of Cherry Valley) to $20,000 (601 Lake, that brick Gorgian spec house). Considering that many more units must go via Craig’s list, this activity is much more robust than our sales. Lots of price reductions, though.

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A spec house moves out of inventory

268 Palmer Hill Road

268 Palmer Hill Road

This was a well constructed house that came up for sale in September for $3.195 million, which in this market was probably too aggressive for Palmer Hill. No takers, so yesterday it was rented for $9,500 per month. I can’t tell you whether that represents a sum sufficient to carry the place but certainly it’s not going to return great profits to the builder, and I assume he’s just waiting for better times.

I’ll be back in a minute with an exact count of new spec houses currently for sale but I do know that we have over 50 priced over $5 million and 22 priced at $8 million and above. In that latter class, we sold four in the pst six months and zero this year. If they all end up being rented, and many of them are also listed for sale or rent, we’re going to see a further attack on rental prices – these are very luxurious homes, compared to most of our older stock – and a rather miserable year for builders. We have too many houses for the quantity we’re selling, if you hadn’t heard.

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Accidental Landlords

Homeowners can’t sell so they rent. Advantages and pitfalls outlined in this Hartford Current article.

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