Foreclosures Increases Demand For Rented Accommodation

Posted in Foreclosed House, October 21st, 2008 |

Rise in foreclosures have led to an increase in demand for rented accommodation. The story of Praga and her family are one of the many across the country. She was living with her husband and four children together with her sister’s family in the Evergreen region of San Jose in a four bed roomed house. But in June the house was foreclosed upon. Although they have not yet vacated the house they are desperately looking for rented accommodation. Simultaneously they are trying to ward off foreclosure. To make matters Praga has recently lost her job. Praga has made a dozen applications for renting a house since July and is willing to pay $3,500 each month for a four bed roomed unit. But so far she has not met with success.

Silicon valley has noted a record number of foreclosures this year. Most of those who are evicted try to find rented quarters. Tenant occupied houses undergoing foreclosure also entail eviction of the occupants. As such there is a high demand for rentals. Taking a leaf out of the past bitter experience many are reluctant to buy houses and prefer to be tenants rather than house owners. The whole concept of American house ownership has undergone a sea change – thanks to the foreclosure crisis.

This has resulted in competition making things difficult for those who are hunting for rentals within modest means. Times are good for landlords. Martin Eichner of Project Sentinel, Sunnyvale said, “The rental market has definitely become tighter in the sense that rents are going up.” His firm resolves disputes between landlords and tenants apart from giving assistance in foreclosure related matters.

In Santa Clara County the average rent increased during the third quarter by 5.2% according to RealFacts. The average rent per month is $1,708. The second quarter had seen the highest increase in rents and perhaps this spells hope that the economy is softening. The apartments showed 95.6% were full during the second quarter. It was less from 96.7% noted during the same period in the previous year. This is because occupancy of apartments is going down and single-family houses are coming up. Many houses have undergone foreclosures.

Joshua Howard of California Apartment Association said, “That’s providing competition to multi-unit buildings. The rental housing economy has more options available right now.” For example, Michelle Harris at Willow Glen got a good response to her advertisement regarding renting out her unit.