The Star Beacon; Ashtabula, Ohio

Breaking News

Local News

October 7, 2012

Ashtabula County renters are paying more after housing crisis

The law of supply and demand interacting with the foreclosure crisis has created a frustrating consequence for area renters.

“The demand is up simply because of people who lost their homes,” said Bruce Schlosser who manages the Ashtabula office of Prudential Select Properties.

“The rental side (prices and need) has increased dramatically,” Schlosser said.

The specific demand relates to many people who lost their homes to foreclosure, but are employed. He said this has created a renter that has more resources than many in the recent past.

A former Ashtabula County property manager (from 2010 to 2012) said many people came to his apartment complex after losing homes to foreclosure.

He said during that time period rents increased $105 for a two bed-room apartments (for new tenants) and $50 for three bedroom apartments (for new tenants).

“We had people come in every day. They had nowhere to go, some were at Samaritan House,” he said.

“They are still in the area and need housing,” Schlosser said.

The rental demand is likely to remain high for a lengthy period of time until some of the people are in a position to buy another house. “It’s going to be five to seven years depending on what vehicle you use to lose your home,” he said.

In most cases a conventional financial institution will wait seven years to consider lending to someone who has been involved in a foreclosure, Schlosser said. He said a short sale would likely be between five and seven years before being considered again.

The law of supply and demand has created a unique opportunity for people to buy homes and fix them up for rental possibilities instead of selling them outright.

Schlosser said investors are buying homes at very low prices, fixing them up enough to rent and earning a tidy profit.

He said an investor must have “the right mindset” to handle the challenges of being a landlord, but rental prices and low investment costs can lead to profits of 18 to 25 percent which can lead to paying off a piece of property in five to seven years.

“You can’t get that in any kind of investment vehicle,” he said.

Ashtabula County Metropolitan Housing Director Jim Noyes said you need at least two people working a minimum wage job to afford a rental property these days.

Noyes said the Section 8 waiting list is closed because it is presently five to eight years to get a rental with government assistance. He said there are 646 voucher Section 8 properties in the county and 555 public housing units available.

“Employment ends up being the key issue,” Noyes said. He said there is almost no movement in the Section 8 program because people aren’t finding a job, or better jobs and moving into another level of housing.

Noyes said about 220 of the 550 public housing units roll over annually.

Rental properties vary annually and the national Department of Housing and Urban Development lists annual fair market value rates. The rates are national and don’t necessarily take into account area market conditions, Noyes said.

Suggested rates for the last year indicate a national decline in rental costs that has not necessarily been indicative of the market conditions in Ashtabula County.

The fair market value is used by AMHA to create rental values of reimbursement for renters, Noyes said. He said the HUD rate for a one bedroom apartment dropped from $508 in 2011 to $476 this year.

The rate for a two bedroom apartment dropped from $647 to $607, Noyes said.

The outlook for home buyers is a little brighter than renters because of the availability of homes is still very high. Schlosser said home buyers are seeking quality work with extra amenities on homes that are being fixed up and resold.

He said the realty profession gauges seven to seven and a half months (to liquidate all houses presently for sale) as the equilibrium point for a balanced housing market. It is presently 11 months to reach that goal in Ashtabula.

The trend is going in the right direction, however, as it was 15 months to liquidate during the heights of the foreclosure crisis.

Text Only
Local News
Ashtabula County Alive
July 4 Celebrations 2014
Summer off to Big Start
Ashtabula County Flag Day 2014
Northeast Ohio Soap Box Derby 2014
Tour de State Line and Boating Season
Ashtabula County Memorial Day 2014
Sam Magill Sr. Memorial
Armed Forces Echo Taps 2014
Lakeside Loop Color Run
Keeping Ashtabula County Clean and Healthy
Canoe Race and Ashtabula Easter Events
The Taping of the Teacher: A sticky Sitation
18th Annual Polar Bear Plunge at Geneva State Park
House Ads
AP Video
NDN Video
Big Weekend For Atlanta Braves In Cooperstown - @TheBuzzeronFox Chapter Two: Becoming a first-time director What's Got Jack Black Freaking Out at Comic-Con? Doctors Remove 232 Teeth From Teen's Mouth Bradley Cooper Explains His Voice in 'Guardians of the Galaxy' Deja vu: Another NYPD officer choke-holding a suspect 'Fifty Shades of Grey': Watch the Super Sexy First Trailer Now! Reports: Ravens RB Ray Rice Suspended For 1st 2 Games Of The Season Air Algerie plane with 119 on board missing over Mali Diamond Stone, Malik Newman, Josh Jackson and others showcase talent Free Arturo - The World's Saddest Polar Bear A Look Back at Batman On Film Through The Years LeBron James -- Dropped $2k On Cupcake Apology ... Proceeds To Benefit Charity Snoop Dogg Says He Smoked Weed at the White House Raw: Fight Breaks Out in Ukraine Parliament Chris Pratt Interrupts Interview To French Braid Intern's Hair Shirtless Super Mario Balotelli Dances While Ironing - @TheBuzzeronFOX Whoa! Watch "Housewives" Star Do the Unthinkable LeBron apologizes to neighbors with cupcakes Justin Bieber In Calvin Klein Underwear Shoot