patrick.net

Logan, why are rents shooting up?
One tenant of ours gave notice to move, and in less than 24 hours I found a very well qualified family even with a 5% rent increase. No exaggeration.
My explanation is, they have not built enough homes for the last 8 years to serve a rising population. What is your explanation?

Rental market needs to catch up with booming demand

If we break them together on a moving average, when gave a lot love for Single Family right at a time when the capacity to own the debt had big a big question market

Look at it this. If we knew 10 years ago how strong the rental demand was going to be from 2008-2015 would we have really built that much SFR to Multifamily. Playing catch up now, the equilibrium is just off. A natural hangover from a financial housing bubble that crippled our economy

Call it Crazy says

Strategist says

Logan, why are rents shooting up?

Any chance it's because people don't have enough money saved up for a down payment, don't make enough in wages to afford mortgage payments and closing costs on expensive houses, have crappy credit and can't get approved for a mortgage? They have to live somewhere, so they're forced/trapped to pay the higher rents or live in a refrigerator box under a bridge.

Not really. The family I mentioned:
$10,400 monthly income. 80% of it was steady.
700+ FICO
The bread winner has a very stable job.
They have a car payment, and a bit on the credit cards.

Strategist says

$10,400 monthly income. 80% of it was steady.

700+ FICO

The bread winner has a very stable job.

They have a car payment, and a bit on the credit cards.

Remember my thesis on CA ( 3X median income) and you should be fine that is 190K, 10,400 isn't good enough in some places in California to make it with other
debt liability and non debt liability cost

Call it Crazy says

Strategist says

My explanation is, they have not built enough homes for the last 8 years to serve a rising population.

There are still millions of houses sitting empty across the country, so I don't think it's a shortage in housing except for a few special areas. Have you noticed the increase of multi-generational housing the last few years? Do you think kids still want to be living in mom's basement at 28 or mom and dad want to move in with their adult children?

Why would this be happening?

Rents are increasing everywhere.

Logan Mohtashami says

Rental market needs to catch up with booming demand

Population guys, population. We have 20 million more people than we did 8 or 9 years ago. This trend ain't changing. Even if the home ownership rate is declining, the population increase will still create a need for SFR housing. And renters still need to live somewhere. Many prefer to rent houses and condos, instead of apartments.
They will need to build, and build like crazy, which is why I love homebuilder stocks.

http://www.multpl.com/united-states-population/table

Logan, forget Dunkin Donuts and go for homebuilders. it's a no brainer.

Rent prices are going up even here in the Midwest!

Strategist says

homebuilders. it's a no brainer.

If you want to make a cases for home builders I would use a better population data center

http://www.census.gov/popclock/?intcmp=home_pop

Logan Mohtashami says

Strategist says

homebuilders. it's a no brainer.

If you want to make a cases for home builders I would use a better population data center

http://www.census.gov/popclock/?intcmp=home_pop

Poor Mother Earth.

Strategist says

Poor Mother Earth.

You can see how much that census data line website is

Strategist says

We have 20 million more people than we did 8 or 9 years ago

From 2000, 282 million to 320 Million

So the young are coming on line

Age 23, 24, 25 are the biggest group we have in America today. Now this group will be taking longer to buy homes is that gap supply in rental needs is trying to be met right now with the expansion on rentals.

It all falls back on the capacity to own the debt and dual income families look so much better on paper than single households

Logan Mohtashami says

Playing catch up now, the equilibrium is just off. A natural hangover from a financial housing bubble that crippled our economy

What if:

What if instead of giving loans to people in poor communities, we would have created Community Jobs Act, which would have taught a trade and taught basic business skills to those with low incomes and poor credit? Was there a better way to get people to middle class.

I remember having to forgo nice cars for ~20 years to afford a house. Now I am able to drive a luxury car - a Ford Escape.

Logan Mohtashami says

So the young are coming on line

Age 23, 24, 25 are the biggest group we have in America today. Now this group will be taking longer to buy homes is that gap supply in rental needs is trying to be met right now with the expansion on rentals.

It all falls back on the capacity to own the debt and dual income families look so much better on paper than single households

Informative chart. I think the birth rates are down though. Also don't forget immigration.

Strategist says

Informative chart. I think the birth rates are down though. Also don't forget immigration.

This is why I said use a good demographic webstie when you look at this census population data line ( forward in line forward demand)

Look at 18-28 ... that is a big portion of people needing shelter and not single family homes until they get married

http://www.census.gov/popclock/?intcmp=home_pop