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Bank and HUD Foreclosures Not the Only Factors Depressing Housing

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By : John Cutts    99 or more times read
Although bank and HUD foreclosures have been largely credited for pulling the housing market of Boston, Massachusetts down, analysts have reported that a further decline is possible with the presence of two other factors: overall economic downturn and rising housing rental rates.

A study released by the Boston Foundation has pinpointed these factors as possible catalysts for further instability in the area's housing industry. According to the foundation, these two factors can cause further decline in property values which have already suffered from the presence of thousands of distressed homes in Boston.

The foundation has revealed that escalating rental rates are primarily due to the growing student population. The organization's report also claimed that the Boston housing industry has been showing some form of recovery from the impact of huge supplies of Massachusetts distressed homes staring in the 2009 first half until the first six months of 2010.

However, this development is being stalled by a decline in the nationwide gross domestic product. GDP dropped in the second quarter of the year and, along with growing unemployment rates, is producing more distressed home foreclosures.

According to the study, rental housing prices in Boston are being pushed to a level that has not been seen in years, even during the time when levels of bank and HUD foreclosures were at their worst. The foundation stated that traditionally, high rental rates and declining vacancy rates can be seen during periods of strong economic development; but right now, both scenarios are present in Boston while the economy is in poor condition.

Aside from the escalating number of student renters, rental fees are also being pushed upward by the increasing number of people who have lost their homes to foreclosures. Former homeowners are now opting to rent properties instead of taking a chance to purchase new dwellings, the foundation has reported.

The study also revealed that the biggest percentage of student renters is accounted for by graduate students, most of whom prefer to live outside campuses. Housing market observers have stated that educational institutions should increase their focus on developing campus housing. Some have suggested that outside campuses, bank and HUD foreclosures will be the ideal structures to develop as student housing.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.

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