Despite the cheap prices of foreclosed and repossessed properties for sale, more and more people in Texas are choosing to rent apartments rather than purchase a dwelling no matter how low the offer price is. In the big areas of the state, not only are vacancy rates declining, but rental rates are also rising.
Repo homes in McAllen and foreclosed houses in various areas of Texas are being offered at very affordable rates. However, not a lot of people are taking advantage of these offerings. Most of them prefer to rent, causing apartment markets to thrive as home selling declines. In Austin, for example, occupancy rates in the apartment market have surged in 2010, causing supplies to decrease and rental fees to jump.
According to realtors, even those who are brave enough to purchase Texas repo homes and other distressed properties are converting their acquisitions into apartment buildings. For 2011, occupancy rate in the rental market of Austin is projected to jump by 2.2%, with rental rates expected to increase by 6.8%. Based on these projected figures, Austin will likely become the second best performing apartment market in the U.S. in 2011.
While a big percentage of the metro area's foreclosed and repossessed properties for sale remain unsold, its apartment industry recorded a revenue increase of 9% in 2010. This is second only to San Jose, California which posted a revenue growth of 10.2% during the same period. San Jose is also the only metro area projected to outperform Austin's apartment sector in 2011.
Properties offered at bank and government foreclosure auctions continue to suffer as buyers stay away from the home selling market. This benefited the apartment industry as people looking for homes change direction from homeownership to renting. Occupancy rate for the city's apartment sector rose to 93.5% in 2010, translating to a percentage point jump of 3.6. The figure represents one of the strongest occupancy increases in the whole U.S. during the period, analysts have reported.
And although foreclosed and repossessed properties for sale are being offered at record low prices, people still preferred renting, even when rental fees rose by 2.4% in 2010 compared with 2009 levels. Average monthly rent in Austin last year was at $854.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.
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