Apartments In Demand Over Last Quarter

May 21st, 2008

Michael Ryder, who is a middle-aged information technology business analyst, has claimed to have slept on the floor of his unheated Winston-Salem home in North Carolina before getting evicted last December. Just like several other homeowners, Ryder had felt flush with equity during the housing boom. At that time, he had impulsively taken a $30,000 loan to build a pool and a deck for his new home. The property itself was bought in 1998 when he even bought a fixer-upper country home where he had in fact decided to reside. However, as Ryder’s marriage collapsed, his wife won the ownership of the county house leaving him with the other property.

As the real estate market softened over the years, he still could not sell off the remaining portion of his house for enough money to offset the rising mortgage bills. He could not even work out a deal in his favor that would have allowed him to stop paying the regular monthly mortgage installment, and therefore, the inevitable followed. As he stopped paying off his mortgage, he soon ended up with his property being foreclosed. So, after foreclosure, now he has nothing left to choose from other than living in a two-bedroom flat that seems a trifle cramped when his son and daughter pay him a visit.

Not only does he miss the pride of owning his own garden home that he can decorate and fix up at his own style, he now has to look forward to paying up and sorting out credits, in the hope of finding another garden house. The mere simplicity in fixing up the lawn of his own garden and painting his own fences gives such owners the pleasure that can never be replaced with owning a flat. He also wishes to leave something behind for the sake of his children.

This rush of accidental rent has seen a rise right after the foreclosure crisis, of which once-property owners like Ryder played a major part. However, this has also come as a boon to the multi-family apartment style housing system. They had previously been undergoing a drop with high rising condo buying. The chief executive of Lane Co. in Atlanta, Bill Donges, reports that his company owns or manages more than 26,000 units across 10 states. In 2006, about half of their units were rental apartments while the remaining half consisted mainly of condos. Now just 95% of rent is for apartments while the condos get a meager 5% of total rent.