2008-07-31, 10:03

Foreclosure Crisis --- What Effect on Apartment Renters?

By: Multifamily Real Estate Industry Team
Each day we hear more sad stories about people who have lost their homes to foreclosure. The statistics are staggering: for example, just this morning NPR reported that 1 in 25 homes in Stockton, CA are in foreclosure.

Needless to say, property managers have been keenly interested in how many new rental applicants are dispossessed homeowners forced into the apartment sector. Not many, it turns out, according to new research performed for the National Multi-Family Housing Council (NMHC) by Bruce Innes of Innes Works Consulting (http://innesworks.com/). It seems that evicted home owners only account for between two and six percent of apartment applicants, which is surprising given the number of foreclosures occurring every day.

The research, presented in a new NMHC white paper titled "Renter Credit Quality in a Volatile Housing Market", also examined whether the creditworthiness of apartment applicants has declined based on mortgage defaults or inability to pay home loans, and found that mortgage problems appeared to affect only 5.4 percent of rental applicants.

Overall, it appears that the foreclosure crisis is having a positive impact on the apartment sector in at least one way. There has evidently been a huge slowdown in the number of renters moving out to become homeowners, and that fact alone strengthens the financial health of the apartment industry.

To find out more about the research, go to the NMHC's website, http://www.nmhc.org/.

(This entry posted by Karen Estelle Carey, a member of the Real Estate Development group and multi-family housing team)

0 Comments:

Post a Comment

<< Home

back to top