New Construction Craze

[Smiling JOe]

I notice that some of the vacant new homes near us appear to have been rented. How is the rental market (for long-term rentals) holding up? I see the ads in the Sun, and the prices seem healthy - is this the case?

I guess that depends on the eye of the beholder. In most cases on the newly constructed homes, the rents don't come close to covering expenses, so from an owner's perspective, no, rents are not high. From a rentor's perspective, there is much to chose from and yes, rents do seem high.

 

[Indigo Jill]

Coming from someone who was forced to rent for about 8 years in several cities around the country (we moved, on average, every 1 1/2 years) - the rents here, when compared to the wages/salaries of those who typically need to rent, are way out of whack and prohibitively expensive. It's just a conundrum all around- the people who bought at the height of the frenzy or built have terribly high carrying costs but renters, typically, don't have the kind of money (thus why they rent) or make the kind of money to carry those costs through renting.

 

[Here4Good]

I know of alot of builders that are furnishing and renting their spec homes.
We have a rental house and have had it for years....We have never had a problem renting it but now we are. We dont even get calls on it. There is so much to choose from. When you say healthy do you mean expensive???

Well, I guess I meant expensive. I was just wondering if houses are actually renting for that, or if (as is happening in a lot of markets) it's a "renter's market" out there.

We have a house in Freeport we will be trying to rent soon, and I see people asking $1200+ for houses up there. Seems a little high, was wondering what the real market is (it's a nice, 3/2 with a 2-car garage, three years old, in a great neighborhood).

 

[InletBchDweller]

I dont know what the rental market is anymore since there has been such an abundance of long term rentals. Our house, close to the beach for $1100 has always been no problem. Now it is at 1000 and still no biters. I have no idea about Freeport. Good luck !!!

 

[SHELLY]

It's just a conundrum all around- the people who bought at the height of the frenzy or built have terribly high carrying costs but renters, typically, don't have the kind of money (thus why they rent) or make the kind of money to carry those costs through renting.

Over the last couple years, the majority of rental properties were flipped for higher and higher prices. Now the market has reached its inevitable conclusion. As a result, there are many folks in Florida who can't afford the higher rents on the meager service-worker wages they make (there's more retail/fast food jobs vs. high-wage jobs in Florida). In addition to the huge run-up in housing prices, their salaries haven't kept up with the increases in gas, food, insurance and utilities (they've all increased substantially over the last couple of years).

On the other hand, I know several folks who have substantial sums of money and choose to rent now...they're waiting, patiently waiting, for their entry point. In the meantime, they're quite content to bank the difference between what they pay for rent and what it would cost to carry a similar house/condo (surprisingly substantial amounts in some cases).

So what we've got is a stagnant housing market--something has got to give, my money is riding on more than modest price decreases (however long that takes).

 

[Liv'smom]

Over the last couple years, the majority of rental properties were flipped for higher and higher prices. Now the market has reached its inevitable conclusion. As a result, there are many folks in Florida who can't afford the higher rents on the meager service-worker wages they make (there's more retail/fast food jobs vs. high-wage jobs in Florida). In addition to the huge run-up in housing prices, their salaries haven't kept up with the increases in gas, food, insurance and utilities (they've all increased substantially over the last couple of years).

On the other hand, I know several folks who have substantial sums of money and choose to rent now...they're waiting, patiently waiting, for their entry point. In the meantime, they're quite content to bank the difference between what they pay for rent and what it would cost to carry a similar house/condo (surprisingly substantial amounts in some cases).

So what we've got is a stagnant housing market--something has got to give, my money is riding on more than modest price decreases (however long that takes).

Tell me about it. The highest wage increase my company offers is 3% annually. Doesn't the cost of living go up about 2% each year. There is a definate imbalance here.

 

[SHELLY]

Tell me about it. The highest wage increase my company offers is 3% annually. Doesn't the cost of living go up about 2% each year. There is a definate imbalance here.

Current inflation is running at about 5.5% (it's really way over 8% without the smoke and mirrors), but the Core Consumer Price Index (which removes food and fuel) is around 2.4%--so you're doing Okie-Dokie if you walk or bike; don't eat; don't buy insurance (medical, housing); don't have to pay college tuition; and don't use utilities.

The best one-liner I've read about inflation: "...I'd weigh 110 if I don't count chocolate and pizza." :funn:

P.S. This productivity figure reported today is somewhat troubling.

 

[rapunzel]

Current inflation is running at about 5.5% (it's really way over 8% without the smoke and mirrors), but the Core Consumer Price Index (which removes food and fuel) is around 2.4%--so you're doing Okie-Dokie if you walk or bike; don't eat; don't buy insurance (medical, housing); don't have to pay college tuition; and don't use utilities.

The best one-liner I've read about inflation: "...I'd weigh 110 if I don't count chocolate and pizza." :funn:

P.S. This productivity figure reported today is somewhat troubling.

My understanding is that the CPI model was changed at some point in the not so distant past control the perception of inflation. It went from being and average of a whole comprehensive list of consumer items to being based on a median item? When did that shift happen?

 

[Paula]

I dont know what the rental market is anymore since there has been such an abundance of long term rentals. Our house, close to the beach for $1100 has always been no problem. Now it is at 1000 and still no biters. I have no idea about Freeport. Good luck !!!

IBD: Our cottages don't seem to be renting as much this fall/winter, but I'll know better when I see the end-of-year statement from the management company. They rented fine spring and summer (similar as the year before), though some of the rentals came in later than usual and we didn't raise our rates since last year. We also offered discounts for fall/winter. I think there are so many places to choose from.

Fortunately, we took our accountant's advice when we bought the cottages. He said that we should never count on renters to pay the mortgages, etc. So, I take on extra jobs at work to pay for the part of the mortgage, etc., that rentals don't cover. Fortunately, I really like my job and have the opportunity to do take on more work. So far, the cottages have been worth the extra work. But it sure would be good to see the rental/buyer market get back on track.

 

[Mango]

My understanding is that the CPI model was changed at some point in the not so distant past control the perception of inflation. It went from being and average of a whole comprehensive list of consumer items to being based on a median item? When did that shift happen?

Late 2003, Greenspan mentioned that the government could save money by switching to a Chain-Weighted CPI rather than the traditional fixed CPI. The problem is that most people don't know what a chain weighted CPI is.
This is considered a much more accurate because it takes into account weight shifting.

An example of weight shifting would be that I used to have a kettcar, 2 scooters and a big horn that was bought from Bozo's web site , but now that I telecommute, I only need one scooter, the Bozo horn (so I sell the kettcar, one scooter and spend it on a spycam ).

Using the chain weighted approach, VOILA, inflation figures are lower.