Developer Tells IBS Crowd that Rental Property Demand is Increasing
- Feb 15, 2008
Orlando, Fla.–Rents will hit a new high in the next few years, two Florida-area apartment builders told crowds at the International Builders’ Show Wednesday in Orlando, Fla., the Tampa Bay Tribune reports.”Rent increases will exceed historical averages over the next three to five years,” said Steve Patterson, CEO of Zom Inc., an Orlando-based apartment builder.As credit difficulties make it harder for people with less-than-perfect credit to obtain home loans, demand for rental units will increase, Patterson said.The increasing number of homeowners who are losing their homes to foreclosure are also expected to give the rental market a boost as they seek out other forms of housing.Many builders that have focused on creating condominiums have switched exclusively to building apartments, according to Bill Donges, CEO of Atlanta-based The Lane Co.On Wednesday, David Seiders, chief economist with the National Association of Home Builders, the annual show’s host, also questioned how much growth the recently approved economic stimulus package would inspire. Tax credit to prompt home buying would be more helpful, according to Seiders.Freddie Mac chief economist Frank Nothaft also said that homeowners face many challenges today, which may outweigh the current reasons to buy, such as affordable interest rates–which are at a 2 1/2-year low and forecast to fall more this year. The lower interest rates may cause more consumers to buy homes, Nothaft said, but only if the current credit crunch doesn’t prevent them from getting loans.”If you qualify and you are a prime borrower wanting a conforming loan, and you can make a down payment, it’s a great time to buy,” he said. “But those are big ifs.”The economists’ forecasts for 2008 varied, but most felt the housing decline would be present until the third quarter at least, coupled with falling prices across the U.S.