(Originally published 03/13/12.)
Last summer, I wrote an article reporting that residential rents in NYC were predicted to rise through 2012. (Renters Beware. Double-Digit Rent Hikes Predicted, published 6/20/11.)
The New York Post recently reported that as vacancies continue to drop, the average rent on Manhattan apartments has risen to a point close to pre-crash rates (1/12/12, Rents Soar as Apartments Dwindle in Manhattan, Industry Reports Show, by Jennifer Gould Keil and Reuven Fenton). According to Gary Malin, president of Citi Habitats, “It went from a tenant’s market to a landlord’s market.” And BOND New York believes rents will only climb higher.
Experts see this renting trend as a result of an unstable local economy and a tight mortgage market, requiring larger down payments and stronger credit. For residents uncomfortable with making a commitment to a mortgage, rentals seem like a safer option. “The tightness of credit is the key driver of the rental market today,” said Jonathan Miller, of Miller Samuel, which prepared Prudential Douglas Elliman’s quarterly report. “Rents are up because fewer people (perceive they) can buy.”
Yet while many only see the adversity in these gloomy reports, others are realizing huge opportunities.
As the costs to rent increase, the prospects of owning a home become more attractive. Plus, interest rates are still quite low, making a home purchase even more affordable. And despite the naysayers, mortgage financing is still very much available. While the mortgage industry is still experiencing its challenges, condo and coop financing is still available to qualified buyers.
Think you’re qualified? In this lending environment, it’s dangerous to be over-confident. The streets are littered with shell-shocked purchasers who’ve had transactions disintegrate because “their bank” denied their loan for reasons they don’t understand. And if you think the pre-qualification letter you got from your bank is your ticket to homeownership, you’re sadly mistaken.
As the real estate and credit industries continue to evolve, only the best Mortgage Planner can keep up with industry changes, market trends, and ensure that your new home and mortgage complement your financial plans and goals.
And guess what?
The rates and fees you’ll receive are probably the same or better than if you went to “your bank.”
Don’t entrust you’re biggest financial decisions to some smooth-talking bank salesman. Stick with the pros. Call me NOW, before you find a new home.
Warren Goldberg is a Certified Mortgage Planning Specialist and a published author. His interviews include Blog-Talk Radio, Newsday, and the Long Island Herald. Since 1992, he’s been sharing his financial knowledge and wealth-building strategies, including how to properly use your mortgage as a financial tool. His clients regularly express their trust and appreciation by recommending friends and family call when in need of mortgage, real estate, and financial guidance.