More recently, I’ve been steadily growing the number of properties I manage for clients as their property manager in Phoenix and Scottsdale. Throughout 2008, I averaged about one new managed home a week. And over the years, I’ve nearly always rented a vacant home within 6 weeks of taking the listing. In fact, until recently 6 weeks is all I have ever asked for, because my marketing methods were rock solid, which, combined with the right price, and a property in move-in ready condition, was nearly a guarantee I would successfully get the property rented in under 6 weeks.
All of my success changed suddenly some time this fall. I can’t pin a date specifically, but we’ll call it November 1. Since then, the rental market has softened substantially. I’ve actually evicted the first 2 tenants of my 5 year management career and a third is looming eminently. As well, in December, I had 4 more tenants move out without notice, or very short notice, creating unexpected vacancy.
Compounding that, finding tenants is substantially harder than just a few short months ago. I’ve shown this rental home in Scottsdale to more than 10 tenant prospects. Prior to this fall, if I showed a home to 3 prospects, that was a lot. The quality of the pictures, along with having the correct price, often rented the home for me before I arrived to open the door. Prospects were “sold” via the marketing, and were viewing the home to confirm a decision they had already made. Now prospects are looking at many homes, not settling for the first thing they see, and then negotiating the rental price/terms. The nerve of these tenant prospects….negotiating the rental price?
For the part of the valley that I serve (Scottsdale and central/north Phoenix), perhaps I’m a victim of small numbers (I don’t manage hundreds of properties) and/or some bad luck/coincidence, but I don’t think so. The majority of other property managers I’m talking to right now are giving me similar stories (for homes with rental rates below $1500/month). And clearly MLS stats don’t lie, which show me a recent decline in asking/sold rental rates.
For now, I’m not changing anything. I’m still marketing aggressively, still showing homes to anyone that calls and wants a look, and hopefully this trend will reverse itself with the new year. However, until I can get a few more homes rented, I’ve declined taking on new property management clients unless they are via referral. I don’t like to have more than 10 rental vacancies at once, and that’s where I am right now.
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It sounds counter intuitive that people would stop renting homes. Especially since so many are moving out of their current homes because of foreclosures. My guess is that people are moving away from PHX because of the Job market, are buying homes instead of renting (LOL), staying away from expensive Scottsdale or they are going to apartments instead of homes.
@Damon, the folks that have given me a “story” primarily are telling me they are moving in with someone else…often a family member/parent. We are seeing quite a few families that are combining households, that in the past were split, which is reducing the demand for the number of housing units needed.
I am an renter and to be honest, I’m ready to move into a home that I own. My cousin bought her home through a company called Taylor Morrison and I’ve been researching them. They seem like a good place to buy a house from, and when I was on their website (http://dreambig.taylormorrison.com/?utm_source=bc) signing up to receive information I was entered into a contest to win a dream vacation. Has anyone else worked with this company?
Vacancy rates are at their highest in decades. I have close 70 units and in the last 2 months 4 people purchased a home and several lost their job. Even people who thought they had a recession immune job got laid off.
Damon, they are not going to apartment because apartment vacancies are at a record high of 13% in 4th quarter of 2008 and getting worse.
Hi Danna-
Taylor Morrison is a good home builder, that I’ve worked with in the past. I’d be happy to help you buy a Taylor Morrison home. As well, we can examine the entire housing market, looking for just the right home, whether that’s Taylor Morrison, Shea, Toll, or even a resale home.
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