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Uncle Sam wants you… to rent his house

August 11, 2011 by in Apartments, Foreclosures, Housing Market Trends, Rental Market Info
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Too many houses for sale due to foreclosureOn Wednesday the Obama administration said that it was looking for ways to turn the federal government’s inventory of foreclosed houses into rental properties that could be managed by private businesses or sold in bulk.  In a desperate attempt to clear the nation’s balance sheet of foreclosed homes, the government may now become the nation’s largest landlord.

The Federal Housing Finance Agency, the Department of Housing and Urban Development and the Treasury Department are jointly requesting ideas for sales, partnership ventures or other strategies that would help to unload approximately 250,000 properties owned by Fannie Mae, Freddie Mac and the Federal Housing Administration. Those properties account for only half of all properties that have been foreclosed upon and are still awaiting resale nationwide.

With so many foreclosed homes on the market, the sale price of occupied homes continues to be plummet.  In some condo buildings in Florida as many as 1 in 3 units are in foreclosure. When an owner goes to sell their condo for $100,000, buyers can find dozens of foreclosures for $75,000 or less. As a result, the owner must either lower their price, stay put for another decade until prices rebound or stop paying their mortgage (which they are likely upside down in) and allow the bank to foreclose on them. It’s this vicious cycle in the hardest hit parts of the country which are causing  apocalyptic real estate markets.

By taking federally owned foreclosures off the market and renting them out, the administration hopes to stabilize neighborhoods where large supplies of empty, foreclosed properties have crushed property values. In effect, the government is saying that they own a quarter million homes they can’t sell.  If they did, it would contribute to a more severe and prolonged housing price collapse.  This is unprecedented in US history.

Nominal House Prices March 2011

The party’s over – time to clean up the mess

To give perspective to the impact that Fannie Mae, Freddie Mac foreclosures could have on home prices, consider the fact that only 70,000 of their 250,000 homes are currently on the market for sale. We’ve all seen what’s happened to home prices in the past three years. Now picture three times more foreclosures in the market, and continued erosion of America’s employment base. The result, not pretty.

One thing is for sure – someone is going to make a killing when the government decides what action to take.  Unfortunatly, I can garantee you that it will be massive investors that can afford to buy thousands of homes at a time. It will likely even be the same corporations responsible  for millions of Americans losing their homes. Small business owners, property management companies and individual landlords will be left with the scraps of this deal… if that.

It’s going to be a very interesting 2012. Perhaps the Mayans weren’t predicting the end of the world, but rather, the end of an era.

 

America becoming a ‘Rentership Society’

August 8, 2011 by in Apartments, Rental Market Info
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Since the housing bubble burst in 2008, millions of homes have gone through foreclosure. But what happens to all the families caught up in the financial chaos? Apparently, millions of them have become renters. The trend towards renting has been so strong in the past few years that analysts from Morgan Stanley recently reported that the United states is quickly becoming a nation of renters.

Graph of US Home Ownership Rates 1965 to 2010

Graph of US Home Ownership Rates 1965 to 2010

In the August 5th CNN Money article, “Home ownership hits lowest level since 1965” Les Christie describes how the US home ownership rate has dropped from 69.2% in 2004 to only 59.2%. While the official numbers show the home ownership rate at 65.9%, the number drops to 59.2% when you factor in delinquent mortgage borrowers (the ones who are likely to lose their homes at some point).

Since Rochester has been fortunate to evade the worst of the housing crisis, and in the process rack up a number of top 10 placements for real estate investing and home ownership, our home ownership rates are quite a bit more steady. The rest of the nation’s real estate has not been so lucky. In fact, the average home price has declined 32% nationally. Despite the ridiculously low interest rates on mortgages, the market just can’t seem to generate buyers fast enough. The two biggest factors being the much more stringent lending practices and the overall decrease in employed people, ready to make a home purchase.

This bubble, and the consequent burst, were surprises to no one with a fundamental knowledge of economics (regardless of what the talking heads on the news have been saying for the past few years). Having been in a position where I could see this disaster coming, I have to confess that I don’t see anyone making the decisions at a national level that are necessary for us to turn this crisis around.

Perhaps the analysts at Morgan Stanley are right, America will be a much more mobile, renter-centric, society for the foreseeable future.

Rochester NY – Top 10 Cities to Become a Landlord

August 1, 2011 by in Landlord Tips, Rental Market Info, Rochester Metro Area
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Rochester NY appears to be riding on a wave of positive press this year.  The July 28th article claiming Rochester as #9 of the ‘Top 10 Cities in America to Become a Landlord‘ is proof that this city is having quite a run.  Most recently, Rochester has showed up as the ‘#1 best city in America for easy commuting‘ and the ‘#4 Most affordable city in America‘.

Rochester NY Skyline from Ford St Bridge

Rochester NY Skyline from Ford St Bridge

According to CNN Money, the study’s publisher, a combination of low home prices, interest rates near zero and climbing rents makes investment opportunities in Rochester quite unique.  Rochester was spared from the huge collapse in housing prices, and this stability means home values are expected to increase over the next three years. Another contributing factor is that unemployment in Rochester hovers around 7 percent, a rate that is significantly lower than the national average.

Here’s the core stats that they looked at in the study:

Average home price (2011): $150,500
Projected home price (2014): $155,500
Gross rent (2011): $825
Projected gross rent (2014): $947

Eyes on the Future

June 21, 2011 by in Pittsford, Rental Market Info
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We wanted you to see this little video produced by Greater Rochester Enterprise, which they showed at this year’s Eyes on the Future festival at St. John Fisher College, in Pittsford.  In this tour de force of infographics and Rochester love, Greater Rochester Enterprise highlights many of the kudos given to the region by major blogs and publications, such as The Daily Beast, and Forbes.  Of course the cynic in me was sick of the soundtrack (straight out of Saturday morning cartoons) by the time they’re touting us as the being in second place for the most renewable energy patents in the world, so if you’re like me you’ll want to watch this to the beat of your own Pandora station.  I won’t tell.

East Avenue Neighborhood Rental Market Overview

June 3, 2011 by in East Avenue, Featured, Rental Market Info
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Tudor Mansion on East AvenueWhether your a native of the greater Rochester area or you’re moving here from out of state, it doesn’t take long before you start flirting with the idea of renting in the East Avenue Neighborhood.  Not only is East Ave a cultural hub of the city, but it’s also where Rochester’s earliest businessmen chose to locate their palatial homes.  Eastman Kodak founder, George Eastman‘s mansion is one of the most spectacular and has been preserved as a present day museum.  True to Eastman’s passion for photography and film, the Eastman House features film and animation exhibits, and houses the Dryden Theatre where rare movie titles are often screened for the public.  As you stroll down East, mansions modeled after Bavarian chateaus and Tudor castles dot the tree lined avenue.  While some of these gems remain single family estates, many have been converted into apartments and condos. In years past many fell prey to the wrecking ball, but their land has since been redeveloped with higher density towers and apartment buildings.

Eastman HouseThe apartment inventory in this part of the city has some of the most breathtaking units in the city.  Renowned architects such as Frank Lloyd Wright and J. Foster Warner, who designed the Eastman House, spared no expense appointing rooms with hand carved fireplace mantels and inlaid hardwood floors.  (J. Foster Warner’s own home was recently listed on Newdigs, but has since been leased.) These details, that were once reserved for the area’s elite, now find themselves in very reasonably priced apartments packed with charm and historic details.  Some larger ‘owners units’ may be 2 or 3 bedrooms, and rent for $1500-$3000 per month, but there are plenty of units to be found for $700-$1200 per month.  If you prefer ‘professionally managed’ properties over architectural details in private homes, you may want to check out some of the apartment buildings like 1600 East Ave managed by Tri-City Rentals, or Regency House managed by The Cabot Group.

1600 East Avenue, Rochester NYLife on East Ave is incredibly convenient. To the north of the East Ave neighborhood, is Neighborhood of the Arts. The neighborhoods blend together seamlessly from the grandeur of the mostly residential East Ave neighborhood, into the artsy hot spots along Art Walk, like the Memorial Art Gallery, Village Gate, and Starry Nights Cafe in the adjacent Neighborhood of the Arts. At the eastern most edge of the East Avenue neighborhood lies the ultimate convenience: the City of Rochester’s only Wegmans. Across from Wegmans lies another rare convenience, a 24-hour gym, World Wide Gym. The East Ave neighborhood is directly adjacent to the shop & restaurant-dense Park Avenue neighborhood, as well as the “East End,” which is known for being the city’s main nightlife hub and overlaps the Western end of East Ave neighborhood, and an Eastern slice of downtown Rochester.  On several occasions during the summer, the club district holds the East End Fest where thousands of revelers come out to drink and enjoy live music.  Local favorites like The Old Toad, The Blue Room, Mex, Monty’s Corner and Murphy’s Law are all located within a block of East Avenue and Alexander Street.

East Avenue Rochester Greek FestIf nightclubs aren’t your thing, you can always drop by the Rochester Museum and Science Center at 657 East Ave or the adjacent Strasenburgh Planetarium. The planetarium also features a 12.5-inch diameter reflecting telescope, which is available for free public viewing on Saturday evenings, when weather permits.

During the cold winter month’s you’ll love the proximity (and short drives) to all the action downtown. In the Summer, East Ave turns into one of the more popular running/biking corridors, with VIP-like front-lawn access to festivals.

You are a Community Storyteller

May 24, 2011 by in Events, Featured, Neighborhood Guide, Newdigs, Rental Market Info, Restaurants, Rochester Metro Area
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Dinosaur BBQ, Rochester, NY If you’re not already familiar with the Newdigs story, we are a humble local start-up with large aspirations. We want to simultaneously bring you the best apartment search experience you’ll ever have, the easiest way for landlords to market and manage their properties, and a robust blog that will help our users get to know the rental market intimately, so that they’re capable of making very informed decisions. Its a lot on the plate of a budding, incubated, locally boot-strapped start-up… so we’re reaching out to you, the Rochester community, for some help.

We need all hands on deck, and we know you’ve got a story to tell! Whether you’re an active member of your neighborhood, or a passive enjoyer of its restaurants & boutiques, you could probably tell us something about what it is to live where you live. Your stories will help not only fellow Rochestererians get to know the other neighborhoods near them, but they’ll help future residents decide where to live when they get to town. Plus, becoming a community storyteller will give you a creative outlet to share your opinions on the finest and funnest things that Rochester has to offer: events, cafes, restaurants, parks, concerts… the list could go on for miles. Your stories shape our neighborhoods. And, whether you’re doing it just for fun, or because you like to write and need an outlet, or because you’re looking to become better known in your community, becoming a Newdigs storyteller can help open doors of opportunity, sometimes in totally unexpected ways.

If you’re interested, contact the chief storyteller (that’s me) Kristin Munson:
You can reach me by email: kristin@newdigs.com
On twitter: @mrsmunson OR @newdigsROC OR @newdigs
On Facebook: Newdigs

I can’t wait to hear your stories! Thanks for helping us grow Newdigs into a great company that can make Rochester proud.