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Monday, February 27, 2012

Rents on the rise in many cities across the U.S.

Observation:   Many homeowners are feeling the frustration of the recent real estate meltdown.  But in many markets across the U.S., renters are feeling a bit pinched, too, as demand for apartments—and rent costs—rise.  Click here to see a recent New York Times story on the matter.

Implications:  Could high rents be one of the stimuli that cause renters to make a move toward buying?  How long will it be before the pendulum swings back toward home ownership?  Or will apartment building development resume, therefore creating more supply for this impressive demand for rental units?  As another source of rental housing, many investors have snapped-up single-family houses only to rent them to families who lost their homes through foreclosure.  Is that a long-term trend, or will those homes be sold-off again when housing supply and demand gets back into balance?

If you sell home furnishings, appliances or improvements, this range of possibilities affects you.  If you sell furniture, the goods you sell to an apartment dweller will be smaller that the goods you sold to the big homeowner.  If you sell to a former owner that is now a renter, your transaction is more likely to be in cash rather than credit terms.  Do your goods and offers reflect the current set of realities that your most important customers are facing?

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

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