In another sign that things are upside down in our current economy, rents are continuing to rise for single family homes. There is an acute shortage of homes for rent in a lot of primary markets.
You might be wondering what is behind that incredible metric. In fact, some tenants are in such an acute need for the rental property of their choice, that some tenants are offering above asking rent.
What we’re seeing are two separate economies. There are home owners who have cashed out, sitting on lots of cash. They can afford to negotiate with landlords and even offer above asking rent. Then there are the working tenants who are paying what they can afford based on their salary. The economic value proposition to these two tenants are vastly different.
Really strong tenants are appearing in the market and they’re paying top dollar. They easily qualify as tenants. They have 800 credit scores. They are spending 5% and sometimes less of their household income on rent. So when they offer above asking rent, they skew that market.
Host: Victor Menasce