By Gloria Sanchez
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If you think the area’s housing market is mess, trying renting.
When Martha Casares and her family lost their house in Chevy Chase, Md., three years ago, she never imagined she would end up caught up in local rental roulette, an impossible mix of rising prices and fewer choices, that has resulted in her moving three times in a simple search “to find an affordable rental in a neighborhood that has good schools and it is safe.”
For $1,400 a month, Casares’ family of four is renting an apartment with three bedrooms and one bathroom in Bethesda, Md. She can’t afford it, and is now moving to an apartment in Montgomery County, Md. “It’s a headache to be moving often, but we need to make sure that we can afford to pay the rent,” Casares said. “It is a challenge.”
The Washington-area housing market was one of the strongest in the country during 2011, and rental prices are going up as well, according to the Greater Capital Association of Realtors. Last year, it was ninth in the “Twenty-Five American Cities with the Biggest Rent Hikes,” as listed by Bloomberg Businessweek. Bethesda ranked 25th.
The average monthly rental price in the last quarter of 2010 was $2,589, and in the last quarter of 2011 was $2,644, a 2.15 percent increase. Montgomery County had a rental price increase of 5.29 percent, with an average rental price of $2,058 in 2010 and $2,166 in 2011.
This is good news for landlords and property investors, but not for people like Casares, who no longer qualifies to buy a house and must rent.
“In some areas, renting can be cheaper than buying, but if you can qualify for a loan and have the money for the down payment, buying can be a better option in the long run,” said Alfredo Rodriguez of Rodriguez Realtor. “Now is a good time for home buyers, and we are seeing a slight increase in the market.”
Despite low interest rates and a slight improvement in the economy and job market, consumers are cautious about buying a home. Renting has become more appealing for many, and as demand increases, rental prices climb, too.
The Federal Housing Finance Agency (FHFA) recently announced its Real Estate-Owned (REO) Initiative pilot program to sell homes repossessed by government agencies to private investors to convert into rental units. The initiative is targeted to hardest-hit metropolitan areas — Atlanta, Chicago, Las Vegas, Los Angeles, Phoenix and parts of Florida.
“Increasing the number of rentals can slow down the recovery of the housing market,” Rodriguez said. “We need to revive our economy by helping home buyers stay in their homes. The government and lenders should do more to help homeowners to refinance or modify their mortgages loans.”
Casares still struggles when she thinks about her housing future and the lose of her home. “I wish that the help that is there today for homeowners to keep their homes existed three years ago,” Casares said. “ I don’t have another choice now, but to rent only.”