Housing woes drive many to rent

The Bradys are benefitting from one byproduct of the housing bust -- a greatly expanded selection of rental properties, many offered by owners who either can’t sell or don’t want to at reduced prices.

“Many people are choosing to rent because they feel more in control of their finances,” said Pam Yarbrough, an agent with Harry Norman Realtors, who is helping Brady find his next rental. “And more people are dual-listing homes, meaning they are being listed for rent and for sale at the same time.”

The rental market is getting hotter as the for-sale market continues to struggle. Companies that used to focus on listing sales are now paying more attention to the single-family home rental market.

In addition to boosting the number of homes for rent, the soft sales market has also boosted quality, real estate agents say. Homes on the rental market now rival those that used to be known as corporate and executive rentals.

“I think you are finding a richer set of inventory in the suburbs and I think that is for a number of reasons,” said Stan Humphries, the chief economist for Zillow.com. “One of those reasons is the condition of the housing market.”

Zillow.com started tracking rentals in December and is watching listings grow daily, he said. In the five core metro counties, more than 4,000 single-family homes and condos are listed for rent on the site.

“Relative to the height of the housing market, I think people are approaching the rent-versus-buy scenario with more pragmatism,” Humphries said.

Marcus Marshall, who is in the restaurant industry, knows both sides of the coin. Marshall listed his home for either sale or rent in March 2009 when he left Atlanta for a job in Chicago. He got more responses from renters than from buyers, he said.

The experience prompted Marshall to opt for renting himself when he came back to Atlanta ahead of schedule.

“We do hope to sell our home one day,” he said of the original residence in the Briarcliff area, “but for now it is doing great as a rental.”

Zillow expects to see the number of people trying to rent their homes -- and the number of people looking for rental homes -- to continue increasing because of the rising foreclosure rate and other housing factors.

“Our forecast is that the housing market will continue to remain challenged for a number of years, which will be compounded by high unemployment,” Humphries said. “We’re predicting falling home values for the rest of this year, then we’ll have to work back through the supply and demand to get to a stable market.”

Rental prices for single-family homes, unlike that for traditional apartment complexes, are all over the map, experts say.

That’s because owners are factoring in a range of costs they need to cover including their mortgage payment, association fees, utilities and maintenance. What their neighborhood market will bear also affects rates.

In Alpharetta, for instance, Zillow.com shows a number homes for rent. Prices range from $600 a month, for a one-bedroom, one-bathroom condo, to $4,500 a month, for a 3,000 square-foot, six-bedroom, six-bathroom home in a neighborhood where homes are listed for sale at about $460,000.

In Marietta more than 100 single-family homes and condos are listed for rent. Those prices range from $595 a month for a two-bedroom, one-bathroom home to $5,500 a month, for a 7,000 square-foot, five-bedroom five and a half bathroom home.

Humphries thinks the market is realigning for the long term into a more even balance of renters and owners.

“There are a lot of situations were buying a home still makes the most sense,” he said. “But at the height of the housing the default decision was to buy, and that’s not the case any more.”

Many financial experts still encourage homeownership, even in this housing market. They say prices are so low it won’t take long for appreciation to occur once the market stabilizes. Tax deductions from mortgage interest also make buying attractive.

On the other hand, renting may be the best solution for people whose finances are unstable or who need the ability to move quickly. Waiting for a lease to end, or even breaking one, may be faster and less costly than trying to sell in this market.

Brady isn’t second guessing his decision, citing constant home maintenance costs and current resale prices as two reasons he and his wife continue to rent.

“Sure when you own it is yours, but the problems are also yours too,” he said. “With renting we can cut out a lot of those financial responsibilities and that’s the kind of flexibility we want to enjoy right now.”