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Rental market meltdown around the corner?
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TEXT OF STORY
SCOTT JAGOW: We’ve measured the housing slowdown every which way but Tuesday, yet the numbers keep rolling in. A couple new ones this morning: first, the number of people who are losing their jobs in real estate, construction and mortgage lending. A survey out today says those job cuts jumped 300 percent in the first quarter over last year to 21,000 jobs.
Another report says the rental market was pretty strong in the first quarter. Rents were up 1 percent to $939 a month on average. But could the rental market be the next victim of the housing fallout? Here’s Ashley Milne-Tyte:
ASHLEY MILNE-TYTE: Until now the rental market hasn’t felt the effects of the subprime mortgage meltdown.
But Sam Chandan, chief economist at Reis, the firm that conducted the survey, says going forward demand for rental properties is likely to increase. But rents may not be affected.
SAM CHANDAN: The deterioration in the subprime market hast the potential to bring more condos into the condo-for-rent arena, competing with multi-family space and undermining the capacity of landlords to raise asking and effective rent.
He says although it’s too early speculate on the size of the impact on the rental market, there will certainly be one. As more and more people have to give up their homes, they’ll turn to renting.
In New York, I’m Ashley Milne-Tyte for Marketplace.
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