Author Topic: Rental market implosion in Lakewood- implications  (Read 8669 times)

Offline cmey

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Rental market implosion in Lakewood- implications
« on: May 01, 2017, 07:41:30 PM »
There are currently hundreds of rental apartments looking for tenants in Lakewood. Basement rental apartments have been particularly hard hit. There are dozens of units that have been vacant for more than six months, and some that haven't had a tenant in close to a year. Some homeowners have given up and have stopped advertising their vacant units. Consequently, rental prices have crashed to levels not seen since the 1990's. Three bedroom apartments with central air, high end kitchens etc. can be had for under $700 a month in some developements. The crash is filtering down to townhouses as well, where prices have dropped substantially.

For several years the demand for rentals outpaced supply, and rental prices rose to the point where the rental of a townhouse and basement apartment would fully cover the mortgage and taxes plus a hefty profit. Many homes were built with two rental apartments and investors bought homes by the dozen to turn into rentals. Low interest rates help fuel the building boom.

The supply of rentals began to outpace demand, yet hundreds of homes were in the approval/ construction phase and were completed adding to the oversupplied market. At this point, despite the massive oversupply of rental units, there are still hundreds of additional units being built including large scale apartment buildings, and even more in the pipeline in various stages of the approval process. It isn't always feasible to pull the plug on a project that is underway, even though the fundamentals have changed. Eventually the market will balance itself out as the natural population growth helps absorb the excess supply, but judging by the units in the pipeline, things are likely to get much worse before they get better..

What are the implications of the rental implosion?
The most obvious will be the impact on the home construction/ real estate market. With the rental income potential drastically lower and the financial incentive in place to rent there will obviously be an impact on demand and consequently prices. The Toms River and Jackson markets stand to gain in the short term since most homes there do not have a rental basement making their lower price point more attractive than a higher priced home in Lakewood with a rental.

Will there be even more young couples moving to Lakewood to take advantage of rental prices that are a fraction of what they will find in almost any other market?

Will it be easier for parent to promise support for young couples since they will be spending thousands less on rent each year?

What are some of the other potential implications? Thoughts?


Offline Iz

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Re: Rental market implosion in Lakewood- implications
« Reply #1 on: May 01, 2017, 07:44:11 PM »
Kudos on the beautiful coherent writing! :D

Offline skinfarrock

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Re: Rental market implosion in Lakewood- implications
« Reply #2 on: May 01, 2017, 07:51:36 PM »
Kudos on the beautiful coherent writing! :D
+1

Offline Moshe123

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Re: Rental market implosion in Lakewood- implications
« Reply #3 on: May 01, 2017, 07:52:59 PM »
If the community wasn't growing so quickly, it would likely have lead to a major recession.

The hardest hit areas in the 2009 recession were the boom areas, with explosive growth, like Florida and Las Vegas. They all bounced back.

Offline skinfarrock

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Re: Rental market implosion in Lakewood- implications
« Reply #4 on: May 01, 2017, 07:56:42 PM »
I'm hoping to get a house for real cheap after the crash! :)

Offline coralsnake

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Re: Rental market implosion in Lakewood- implications
« Reply #5 on: May 01, 2017, 08:03:28 PM »
Greeeeeeeaaaaaaat.........another Lakewood thread.....
"Here at DansDeals we donít do buses." -Dan

Offline aygart

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Re: Rental market implosion in Lakewood- implications
« Reply #6 on: May 01, 2017, 08:11:03 PM »
This has happened before and will happen again. It is all cyclical.
You have the right to remain silent. Anything you say can and will be used to start a religious discussion.

Offline Dr Moose

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Re: Rental market implosion in Lakewood- implications
« Reply #7 on: May 01, 2017, 08:28:10 PM »
I'm hoping to get a house for real cheap after the crash! :)
Me too. Looking to buy all the homes from the many Kollel families who are no longer able to afford their mortgages because they dont have the rental income. 
Hey there! I am using DansDeals Forums.

Offline Iz

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Re: Rental market implosion in Lakewood- implications
« Reply #8 on: May 01, 2017, 08:33:28 PM »
Greeeeeeeaaaaaaat.........another Lakewood thread.....
Boy, if I would open all the threads I have no interest in, and post to complain about them... ::)

Offline jye

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Re: Rental market implosion in Lakewood- implications
« Reply #9 on: May 01, 2017, 08:52:41 PM »
This has happened before and will happen again. It is all cyclical.
Actually specifically in Lakewood, it hasn't. (If you are referring to Las Vegas, Miami etc. that's more accurate.) If I recall correctly, around the early 2000's there were some basement vacancies, but they were concentrated in the (then) outlying areas and the glut was not long lived. A few years after that there was an excess of rentals, but not for such a duration, and not with such an impact on prices, and certainly not on such a scale, even relative to the current population. There have been several housing bubbles as well. But I can't recall anything coming close to the magnitude and impact of the current situation. Sure everything is cyclical but this has the look of a situation never yet experienced in Lakewood and it is unlikely to have hit the bottom yet. Unlike rental bubbles in other cities , few of the landlords are investors with deep pockets; many are yungerleit struggling to make their primary mortgage each month so the impact is greater...
« Last Edit: May 01, 2017, 09:06:23 PM by jye »

Offline aygart

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Re: Rental market implosion in Lakewood- implications
« Reply #10 on: May 01, 2017, 09:05:36 PM »
Actually specifically in Lakewood, it hasn't. (If you are referring to Las Vegas, Miami etc. that's more accurate.) If I recall correctly, around the early 2000's there were some basement vacancies, but they were concentrated in the (then) outlying areas and the glut was not long lived. A few years after that there was an excess of rentals, but not for such a duration, and not with such an impact on prices, and certainly not in such numbers even relative to the current population. There have been several housing bubbles as well. But I can't recall anything coming close to the magnitude and impact of the current situation. Sure everything is cyclical but this has the look of a situation never yet experienced in Lakewood and it is unlikely to have hit the bottom yet. Unlike rental bubbles in other cities , few of the landlords are investors with deep pockets; many are yungerleit struggling to make their primary mortgage each month so the impact is different....
You are not remembering correctly. There are more vacancies now but the community is also larger. Apartments were going for 500 or even less.
You have the right to remain silent. Anything you say can and will be used to start a religious discussion.

Offline aygart

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Re: Rental market implosion in Lakewood- implications
« Reply #11 on: May 01, 2017, 09:06:11 PM »
I'm hoping to get a house for real cheap after the crash! :)
With enough people thinking like you the downturn will end.
You have the right to remain silent. Anything you say can and will be used to start a religious discussion.

Offline jye

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Re: Rental market implosion in Lakewood- implications
« Reply #12 on: May 01, 2017, 09:11:18 PM »
You are not remembering correctly. There are more vacancies now but the community is also larger. Apartments were going for 500 or even less.

I remember a few apartments going for $495 but that was over 15 years ago and only in specific outlying areas. I don't remember which. Maybe village park and a couple others? Not in almost every neighborhood. Now, pick a neighborhood and there are houses sitting. Even on Forest near yeshiva...

Offline Iz

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Re: Rental market implosion in Lakewood- implications
« Reply #13 on: May 01, 2017, 09:12:22 PM »
Even on Forest near yeshiva...
What are they asking over there?

Offline aygart

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Re: Rental market implosion in Lakewood- implications
« Reply #14 on: May 01, 2017, 09:12:41 PM »
I remember a few apartments going for $495 but that was over 15 years ago and only in specific outlying areas. I don't remember which. Maybe village park and a couple others? Not in almost every neighborhood. Now, pick a neighborhood and there are houses sitting. Even on Forest near yeshiva...
It was like that before too
You have the right to remain silent. Anything you say can and will be used to start a religious discussion.