Renters plunging into a white-hot housing market are overbidding available apartments, striking the death knell for pandemic-era deals and months of free rent — while endangering renters who can’t afford to compete.
A real estate agent in Philadelphia, for example, told him Philadelphia investigators She “broke down and cried with my client” after losing a potential rental property to someone willing to pay $500 over the advertised rental price. That’s what a renter in Los Angeles said Los Angeles Daily News She gave up over $60,000 — a year’s rent up front — just to snag a five-bedroom home for her family after being beaten on offers for two different apartments. A New York tenant related it in a similar way New York Times They were outbid on “multiple rentals” before finally securing an apartment.
The bidding trend entering the cut-throat race to sign a lease in some of America’s largest cities comes amid a housing shortage and soaring rents. While some renters can — and will — pay more than a landlord’s asking price to secure their place in the frenzy, others are just as likely to be overpriced or end up spending more than they should.
“Renters are left with few options other than paying higher rents and, in some cases, offering even more – whether they can afford it or not,” Danielle Hale, Realtor.com’s chief economist, said in a statement this month after the property sale Data released on the website shows that the median rent in the country’s top 50 metropolitan areas had reached $1,827 in April.
(Realtor.com is operated by News Corp subsidiary Move Inc., and MarketWatch is a unit of Dow Jones, which is also a News Corp subsidiary.)
““The current combination of high home prices and low inventories is making home ownership more difficult to access and is driving up retirement ratios among older and higher-income households.””
According to the Harvard Joint Center for Housing Studies, higher-income renters are increasingly entering the rental market, in part due to the rising cost of homes for sale. That means they compete with people who traditionally rent out of necessity because they can’t afford to own their own home.
“The current combination of high home prices and low inventories is making home ownership more difficult to access and is driving up retirement rates for older and higher-income households,” according to the Joint Center for Housing Studies said in a January report.
“At the same time, the influx of higher-income households into the rental market is driving up rents and potentially reducing the ability of younger and low-income adults to form renter households,” she added. “The question now is whether there will be a sufficient supply of affordable and available housing to prevent this outcome.”
The nation lacks 7 million affordable homes for ultra-low-income renters, who are disproportionately black, Hispanic, Native American and Asian, according to the report National Low Income Housing Coalition. The organization attributed this deficiency to a combination of systemic racism and income inequality.
Because rents are skyrocketing — up 17% yoy in March to Redfin – A solution to avoid bidding wars could be to stay simple. Landlords may be more lenient with existing tenants, Redfin’s chief economist Daryl Fairweather told MarketWatch.
https://www.marketwatch.com/story/the-next-phase-of-americas-competitive-housing-market-renters-facing-bidding-wars-11654016733?rss=1&siteid=rss The next phase of the hotly contested American market: Desperate tenants facing a bidding war