More than half of current renters plan to be homeowners within 5 years

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More than half (52 percent) of current renters said they anticipate buying a home in the next five years, according to a survey conducted by ORC International.  Tenants with children under 13 are most likely to buy a home with 69 percent of them responding that they anticipate becoming a homeowner in the next five years followed by single family tenants in general, with 60 percent of those tenants anticipating buying a home and just 44 percent of apartment renters planning on buying a home within five years.

Top three reasons tenants don’t want to own a home: Continue reading “More than half of current renters plan to be homeowners within 5 years

Apartments and Residents Contribute $11.6 Billion to Missouri’s Economy

Dennis Norman, St Louis Investments,Apartments and their residents in Missouri contribute $11.6 billion to the Missouri economy and support 276,000 jobs, according to a report by The National Multi Housing Council (NMHC) and the National Apartment Association (NAA)The report says there are 409,198 residents living in 271,500 apartment homes in Missouri with spending power of $4.6 billion.

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Source: weareapartments.org


 

Number of homeowners becoming tenants on the rise

Saint Louis Realtor, Dennis Normanst-louis-real-estate-realtor-dennis-normanOver 35 percent (35.1) of tenants were previously homeowners, according to a survey by Apartments.com conducted in the 4th quarter of 2012.  This is a fairly significant increase from a year ago when  33.6 percent of tenants reported they were previously homeowners.  The most common reasons given for the change from homeowner to tenant were affordability and the flexibility in location.  While it was just 5th on the list, it is worth noting that the loss of a home due to foreclosure or divorce increased nearly 90 percent in the past year as a reason for converting from homeowner to renter.

Top Five Reasons Why Previous Homeowners Now Rent: Continue reading “Number of homeowners becoming tenants on the rise

Demand for rental property likely to increase over next two decades

dennis-norman-realtorIf you have tried to buy a rental property lately in St. Louis then you have discovered you are not alone and the competition for good rental property is quite intense.  The reason is simple, experienced investors as well as new ones see real estate as a safe investment and, in many ways, a much better alternative to other investments.  Part of the reason for this is the demand for rental housing, brought on as a result of many former homeowners that have been forced, or have chosen, to rent instead of own and “would-be” homeowners that are unable to meet tougher requirements for mortgages thereby forced to remain tenants.  According to information just released by the Bipartisan Policy Center, the demand for rental housing is not going to subside anytime soon as  five to six million new renter households are expected to form in the next ten years alone.

Continue reading “Demand for rental property likely to increase over next two decades

St. Louis Area Renter Occupied Housing On the Rise While Owner Occupied Housing Declines

st-louis-real-estate-realtor-dennis-normanThe St. Louis area has seen a fairly dramatic change in the make-up of the housing occupants with a shift from home-owners to renters over the past six years.  After the crash of the real estate market we have experienced, as well as massive unemployment and a weak economy, this is not surprising, but is something that I think needs to be recognized.  The five-county St Louis core market (St Louis County, St. Louis City, St Charles County, Jefferson County and Franklin County) as a whole saw owner-occupied units drop almost 3.5 percent during the period while, at the same time, renter-occupied units increased almost 15 percent resulting in renter’s making up almost 31 percent of all the occupied housing units in 2011, up 13.14 percent from 2005 when they accounted for 27.29 percent.

As we drill-down to the county level, we can see that the results vary fairly significantly by county.  For example, Jefferson County saw the largest increase in renter-occupied housing units with a 35.38 percent increase during the six-year period, while Franklin County had a decrease of almost 9 percent in renter occupied units during the period.  Continue reading “St. Louis Area Renter Occupied Housing On the Rise While Owner Occupied Housing Declines

Homeownership in St. Louis is 53 percent cheaper than rent according to Trulia report

saint-louis-real-estate-dennis-normanShould I rent or buy a home in St Louis?  This is a question that I’ve been asked dozens of times over the past couple of years and one that given the fact that home affordability is at an all time high and mortgage interest rates at an all time low, is generally easy to answer with “buy if you can”.  I guess I many not have realized just HOW much sense that made financially, until a report came out a few days ago that looked to answer this very question and found that home ownership was 45 percent cheaper (on average) than renting in all 100 largest metro areas in the U.S.  In St. Louis, with an average monthly cost of home ownership of $593 and rental cost of $1,251, according to Trulia1, there is 53 percent less cost owning a home versus renting a home.
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1Trulia looks at homes for sale and for rent and calculates the average rent and sale price across all listed properties in a metro area. Then, Trulia factors in the total costs of homeownership (e.g., closing costs, maintenance, insurance, taxes, etc) and total cost of renting (e.g., renter’s insurance and security deposit). The starting assumptions are that a prospective homebuyer can get a low mortgage rate of 3.5 percent, itemizes their federal tax deductions, is in the 25 percent tax bracket, and will stay in their home for seven years. People in the 35% federal income tax bracket are also assumed to pay 5% state income tax. To account for the opportunity costs, Trulia calculates the net present value of the payment streams for renting and owning.

Should you buy or rent a home in St. Louis?

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As long as you plan to stay put for at least 2.5 years, you are better off financially to buy a home in St. Louis versus renting a home, according to a new report by Zillow.  On a national level, the average that you needed to stay in a home before buying a home made sense over rental was 3 years.

In calculating the “cost” of owning or renting a home, Zillow took into account the down payment (or deposit), mortgage and rental payments, transaction costs, property taxes, utilities, maintenance costs, tax deductions and opportunity costs, while adjusting for inflation and forecasted home value and rental price appreciation. The table below shows the results for the 30 largest metro areas in the U.S. Continue reading “Should you buy or rent a home in St. Louis?

St. Louis home prices falling;  St Louis rents on the rise

dennis-norman-st-louis-realtor-A report just released by Trulia today which is based on the for-sale homes and rentals listed on Trulia, shows that asking prices for Saint Louis homes for sale decreased 2.4 percent from a year ago however Saint Louis rental rates increased 3.2 percent during the same period.

Nationally, home prices increased 0.3 percent in June from a year ago and rents were 5.4 percent higher in June than a year ago. Continue reading “St. Louis home prices falling;  St Louis rents on the rise

Report says housing market recovery to be led by demand by investors for rental property

dennis-norman-st-louis-realtor-According to a new report, The Shifting Nature of U.S. Housing Demand, by The Demand Institute, average home prices will increase by up to 1 percent in the second half of 2012. By 2014, home prices will increase by as much as 2.5 percent. From 2015 to 2017, the study projects annual increases between 3 and 4 percent. Since the real estate market is very local, it is not surprising that the report says this recovery will not be uniform across the country, and the strongest markets could capture average gains of 5 percent or more in the coming years. Continue reading “Report says housing market recovery to be led by demand by investors for rental property

St Louis makes list of 100 best places to invest in rental property

st-louis-realtor-dennis-norman-best-places-to-buy-rental-propertySt Louis made the list of the “Best 100 U.S. Markets to Invest in Rental Property“, developed by HomeVestors and Local Market Monitor, coming in right in the middle at number 50.  Las Vegas was in the number 1 slot and California was the star of the show with 12 metros on the list

There are good opportunities for investors in every one of the top 100 markets,” said HomeVestors’ co-president, David Hicks. “But investors would be wise to take into account other dynamics for the ideal timing to enter the market.” Hicks sites job growth as a key indicator of a market prime for investment. “Higher job growth rates normally indicate a stronger market for rentals,” he said. “Strong growth rates and higher risk-return premiums usually point to the best markets to invest in now.” Continue reading “St Louis makes list of 100 best places to invest in rental property