The glut of unsold property in the US has started to drive down rents again as sellers seek to cover costs on the rental market. The US has fewer empty properties than Ireland accounting for about 9% of the total stock as compared to 15% in Ireland.
Rents Peak in Housing Glut; New York Escapes Decline (Update3)
By Kathleen M. Howley
May 2 (Bloomberg) – The glut of U.S. properties for sale is about to hit the rental market.
A record number of homeowners who can’t sell condominiums and houses are competing for tenants with the country’s biggest apartment owners led by Chicago-based Equity Residential, said Jack McCabe, the founder of Deerfield Beach, Florida-based McCabe Research & Consulting LLC. Metropolitan New York, where demand for housing exceeds supply, may be the only place where rents increase, albeit at a slower pace, he said.
Increasing vacancies does not bode well for rental incomes,'' said Nabil N. El-Hage, a professor at Harvard Business School in Boston, across the Charles River from Harvard University's main campus in Cambridge, Massachusetts.We’ve seen a softening in apartment REITs as a result.’’
Frustrated sellers who become landlords have created an inventory of for-sale properties that could derail a housing recovery next year, Chandan said. If home sales improve in early 2008, as predicted by Freddie Mac, the No. 2 mortgage buyer, properties now being rented could reappear in 12 months time to flood the spring market.
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GM arm hit by weak US housing market
GM, which Toyota Motor displaced as the world’s largest carmaker in the first quarter, said profit fell to $62m, from $602m a year earlier.
GM chief financial officer Fritz Henderson said weaker GMAC results were the major reason earnings missed even the lowest of Wall Street expectations.
The company, which sold a majority stake in the financial services firm last year, realised a loss of $115m in the first quarter from the 49% interest it still holds.
Yesterday, GMAC posted a first-quarter loss of $305m as the pressure in the US mortgage market forced it to take charges at its housing finance unit.
GM must regret getting involved in this market after this horrendous set of results
