As more and more homeowners lose their homes to foreclosure, most have to seek rental housing. At the same time, many present renters have been hesitant to purchase homes as home prices still continue to drop and the economy softens. These renters are tuned in to concerns that their equity would be siphoned away until the housing market stabilizes.

This is creating intensity in the competitiveness of the apartment rental industry. The quest for renters now is to find affordable rent rates as rents rise. Rates have risen as much as 5.2% in areas like Santa Clara County resulting in an increase in vacancy by 1.1% in third quarter 2008. It is worthy to note that rising rents may be slowing down as increases in rental rates was not as great as the second quarter of 2008.

Another contributing factor in regard to foreclosures is that many of the homes being lost by homeowners have been sold to investors and converted to rentals, creating greater competition for apartment owners.

Information gleaned from “Foreclosures Add to Tight Rental Market” - San Jose Mercury News (10/28/08).

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Please contact me at Pete@ConsultPete.com or 925-719-3569 if I can be of assistance. To learn more about my background, visit Consult Pete. To learn more about my company strategy, visit Commercial MasterMinds.