Montclair rental - gone in 1 day

Real estate is always a “good news-bad news” business. The most obvious example of this is an overheated market: great news for home sellers, lousy news for home buyers.  An article I read recently in RISMedia,  an online trade publication, discusses another good news-bad news situation: the current rental market.

The article cited a study by the Harvard Joint Center for Housing Studies, which concluded that the fledgling national economic recovery will actually hurt renters. More Americans are finding new jobs, but these jobs often pay less than their former ones, so they are choosing to rent a home instead of buying one.  In addition, the continuing foreclosure crisis means that many former homeowners can now only afford to rent. With no real increase in multifamily rental units planned by developers, rental units will almost certainly become scarcer and thus more expensive.

Montclair is already showing signs of upward pressure on the rental market – There are only 35 rental units at the moment listed on the MLS as compared to 230 that are currently for sale.  As a New Jersey Realtor, I have firsthand experience with this trend: I listed a 1 BR condo renting for $1850/month in a loft-type building in Glen Ridge, walking distance to the NYC train, on Saturday; by Monday, it was gone.

The good news in this scenario: a poor rental market often means it is a good time to buy a home. Mortgage rates are at their lowest in years, and home prices have dropped significantly from several years ago. Are you looking for more space for your growing family? Have you been considering buying a multifamily property as an investment? If you answered “yes” to either of these questions, then take advantage of the good news (for buyers) and make your move before the tide turns again.

A recent New York Times article discusses the rise in short sales in Manhattan due to the recession. One market analyst said “2010 might well be dubbed the Year of the Short Sale nationally. ‘A short sale is going to be the only way for many people who bought at the peak and who are now underwater to move on with their lives if they have to relocate or downsize.’” Like Manhattan, Montclair, Glen Ridge Maplewood and the rest of Essex County have seen the number of short sales rise. When the alternative is foreclosure, selling a house through a short sale is a way for the owner to come out of the deal relatively unscathed. I discuss the issue of short sales further in Short Sales for Buyers and Short Sales for Sellers. If you have any questions about short sales, either because you’re thinking of selling your house short or you’re interested in buying a house that’s  a short sale, please email me for more information.