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For Tampa Bay, renting is the new owning

Question: What do you call a couple who bought their Tampa Bay dream home in 2006?

Answer: Renters.

An exaggeration, to be sure. But the housing crash has thinned the herd of Florida homesteaders.

In tight housing markets like New York City's, renting is king. But in Central Florida, your stereotypical tenant has been a divorced person or a 20-something without the means to lay out a down payment for a lanai in the 'burbs.

If you weren't convinced that renting is the new owning, the Mercedeses and Cadillac Escalades parked in front of four-bedroom rental houses should prove it beyond a doubt.

Or you could read the new apartment report put out this week by the firm Real Data. The survey of more than 118,000 apartments around Tampa Bay revealed that 4,500 new units hit the rental market between May and November.

But guess what? Vacancy actually declined from 10 percent to 9.7 percent. That means tenants grabbed the excess units. Three years ago many of those renters, giddy with free-money mortgages, would have been wading into in the buyer's pool.

Developers at several downtown Tampa condo towers, including a new high-rise called the Element, accounted for some of those new units. They figure it's better to collect rent while they wait out the housing slump.

Renting actually makes sense. Apartment rents are at a three-year low and average $808 in Tampa Bay. Square foot for square foot, it's even cheaper to lease houses, if you don't mind being bounced in the event the landlord loses the house to foreclosure.

So many real estate investors bought unwisely from 2004 to 2007 that thousands of houses clamor for tenants in places like central Pasco and southeastern Hillsborough counties.

Unfortunately, the more popular the renting, the more stubborn the recovery.

Despite record-low interest rates of about 5 percent and billions of dollars in government subsidies for home buyers, Tampa Bay residents continue to abandon their houses with abandon. In November alone, lenders sued 4,200 Tampa Bay properties for foreclosure, according to a report from RealtyTrac.

Not all of these foreclosure victims are down-and-outs. A small percentage are engaged in strategic foreclosures.

These homeowners can afford their mortgages but figure it's pointless to cling to a house worth $100,000 less than they paid for it. Better to walk away from a $1,800-per-month payment if you can rent the same house for $1,000. Or so they argue.

Stabilizing the housing market will require getting a handle on rentals. Don't look for improvement soon. The recent rise in Tampa Bay home sales was born on the backs of investors scouting out foreclosure bargains.

The only Christmas decorations most of these investors will place in their front lawns will be single signs: For Rent.

For Tampa Bay, renting is the new owning 12/10/09 [Last modified: Thursday, December 10, 2009 8:52pm]
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