Hey, lenders and mortgage-enthusiasts: thanks ever so much for screwing up the economy for the rest of us. To show my appreciation, I will be sure to prepare an appropriate welcome when some of you move into my apartment complex. Maybe winding up the neighbor's dog at 4 in the morning? ...no, don't thank me; it's the least I can do. ;)

Sent by M.J. Kuhns | 4:11 PM ET | 08-30-2007

Wow so real estate types are looking to squeeze the extra money out of the rent market becuase the mortgage bubble burst. Good times are ahead for all of us.

My first paycheck is for rent and some food, and the second one is for bills.

Sent by Jason Smith | 4:43 PM ET | 08-30-2007

This is only half the equation. Yes, there will be more renters in the market, but there will also be a lot more properties to rent as folks give up on trying to sell their houses in this buyer's market. It may take a while, but the nation will ultimately follow Miami's lead with a glut of inexpensive rental properties available.

Sent by Mark in Atlanta | 6:19 PM ET | 08-30-2007

I'd have to second Mark in Atlanta. Rental price pressures may increase in the short term, but when specu-vestors turn to renting, and foreclosed homes are recycled back on the market there will be a drag on rental rates (and prices). Correct me if I'm wrong, but the gist of the housing bust is that housing supply outstripped demand (and housing prices could not be supported).

Sent by Paul from St. Paul | 7:27 PM ET | 08-30-2007

That seems like great news, but I can assure you there will not be a glut of inexpensive housing in the metro DC market. I'm shelling out more than $1,200 for a tiny studio in Arlington and I have no prospects of saving for a downpayment on a home. The only thing I have to look forward to is rising rent.

Sent by Ms. Stewart | 12:27 PM ET | 08-31-2007

And then there's the conversion factor; a large number of apartment complexes 'went condo' during the real estate rush, forcing people who couldn't afford or simply didn't want to buy their rental units to go shopping for another apartment in a shrinking pool of availability. This happened in the Phoenix metro area where my father lives; his apartment complex went condo and he was lucky to find another unit to rent in the area, albeit at a higher cost and not as nice. He's 76 and had no desire or wherewithal to buy a 1,000 sf condo for 300K. Of course, that complex is now sitting half empty/unsold as are most of the others, whereas before it was fully rented. Where I live in central AZ, three houses on our street were for sale for over two years. Now they're being rented. And this in a town that made Money magazine's 'most desirable' list!

Sent by Susan D-L | 3:29 PM ET | 08-31-2007

And a strong second to Susan; in one area of Minneapolis, high priced condos were being built everywhere and affordable housing went down the tubes. Now there is no affordable housing for anyone, the demand for pricey homes or condos is nil, and if renters have to put up with higher rates, there will probably be a lot more people standing on street corners. Possibly including myself. I am in a affordable (older) condo, but with no employment.
I am wondering if there is even a remote chance of improvement in the housing market----before 2012!

Sent by Lisa R | 1:48 PM ET | 09-02-2007

Sorry to say the article is way off.
Rents in SF bay area adjusted for inflation the same as back in 1997.
So rents have been flat.

Sent by Sammy | 3:42 PM ET | 09-02-2007

I rent in Chicago in by far one of the better neighborhoods surrounded by Million Dollar homes. My rent has not gone up noticeably in 3 years. With rising empty single family homes and condos everywhere how is it that the rental market is getting tighter? Even with all the condo conversions if someone is not living in them they are empty. Always negotiate with the landlord and do not listen to the housing PR machine until you see it for yourself. I have seen nothing but a very soft rental market and it is getting softer as speculators become landlords to cover at least some of their costs. Renters you have the upper hand you were not fooled into mortgaging your future, enjoy it.

Sent by Bill-P | 8:46 PM ET | 09-02-2007

In Sarasota Florida where prices went up the most in the nation, we had to cut the rent over 20% to get a tenant. There are still brand new condo, townhouses and homes in gated town center communities for around $1200 a month and no state income tax.

Sent by Howard R. Schneider | 9:22 AM ET | 09-03-2007

Bill-P,

Negotiate with the LANDLORD!!?? What?! Like have any power!!!??

Why, just drop those delusions of empowerment and come down here in victimland, where everything is the fault of "The Man" and his capitalist ilk.

Don't you know that all those people who took out loans were too stupid to read the fine print or understand a mortgage. Why those BUILDERS and LOAN officers belong IN JAIL for trying to provide creative financing and affordable housing.

IMAGINE providing a method by which two people earning just above minimum wage get access to houses, condos, and town homes approaching 2000 square feet. Don't they know that they are victims of greedy bankers and builders.

Barak Obama is my guy. He has a plan to FINE and PUNISH mortgage brokers. He's going to put those poor people who used creative financing back in their government created protective cribs, just where they belong. If he gets to be president, maybe we can see them rebuild Cabrini Green and the Robert Taylor homes, so the poor and the struggling can be put back in the warm, fuzzy hands of their government mommy.
___

The sad thing is NOT my heavy sarcasm. The sad thing is the number of people who read my words, and didn't get that it WAS sarcasm

Sent by Bruno | 12:05 PM ET | 09-04-2007

Yes, it's always nice to see the ultra right wingers who believe in the "freedom" of markets and deregulation when you can't negotiate much with anyone anymore -- the phone company, cars, all sorts of purchases come with corporate-designed contracts. The fact of the matter is that as a "consumer" it is impossible to have sufficient specialized knowledge to dabble in so many thousands of products and services with sufficient knowledge to make an informed decision. It is simply not possible.

And while I agree that the greed of homeowners/home buyers in taking crazy financing to buy cars, and live generally beyond their incomes, the risk that such credit bubbles present to the overall economy demands that government regulate this industry -- and heavily.

The free marketeers tell us regulation is bad, government intervention is bad... oh, but when all the loans go bad, can the Congress increase the caps and lower the standards on Fannie Mae and Freddie Mac so that they can buy up a lot of this bad debt BEFORE the defaults hit, oh, and please lower rates and "inject" hundreds of billions of dollars into the "financial markets" -- which essentially means print money out of thin air and then loan it at very low rates against bogus collateral that is virtually worthless.

Yes, sure that's a free market.

How can you have this sort of home price appreciation without a later SURGE in consumer prices? It's just like with the ridiculous easy money speculation in commercial buildings -- they have to try to raise rents afterwards to make up for ridiculously low rates of return -- people are buying buildings for the lowest return on investment based on prevailing rents in a very long time -- and then they try to increase the rents to cover the gap.

That's when the Fed has to either hold steady and keep the price inflation from spiraling out of control, but at the cost of watching all of the asset bubbles burst as bad debt is written down -- a severe and lasting recession. Or they let the inflation run loose and try to hide it. Either way this is going to suck and it is because the markets are not sufficiently regulated.

There are FDIC insured institutions loaning $750,000 to illegal immigrants using stated income loans. Maybe we need to see if the deregulation of ending FDIC insurance would create more runs on banks like Countrywide's little recent run and Northern Rock Plc's big run on the bank that got the Bank of England in its biggest bailout ever. Yes, let's see how bank deregulation would function if you removed both the easy Fed credit to banks and federal bailouts instead of just removing regulation of banks' profit making activities.

Sent by Sean | 2:34 PM ET | 09-16-2007