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Trulia Rent Versus Buy Goings On

By Al Twitty | November 7, 2012

Listings portal Trulia and Minnesota based Re/Max Results announced yesterday a partnership that will allow the Realty more visibility via the property website.

Montague review

© RTimages - Fotolia.com

Re/Max Results, a Minneapolis-St. Paul outfit, gets pretty much the same deal San Fran brokerage Alain Pinel got some time back. As reported by Inman News, the moves by major Realtors bear watching. In the larger picture, Trulia's findings released on Monday portray a real estate market in flux. In selected cities, rents are rising not quite twice as fast as property asking prices.

Looking at trends from a simply economic standpoint, the increase rate for rentals, relative to home prices, seems purely supply and demand curve logic. Cities shown also illustrate what may be an inverse relationship between those places with Y on Y sale price increases above 10%, and their rental counterparts, cities such as Houston. For that Texas city, rental prices jumped some 16.5% y on y.

Jed Kolko, Chief Economist for Trulia and many other media outlets, points to the situation as perhaps "value" related. I quote from a post by him:

"On the flip side, rents are falling in Las Vegas despite for-sale price gains of 10.9%, and Phoenix rents are rising by just 2.0%, compared with a 24.9% leap in prices. Accordingly, in Las Vegas and Phoenix, rental affordability is improving relative to owning."

As one might expect, relative value dictates a lot about trends in markets. It is no secret that disposable income going down, affects expenditures of all kinds. While there are many factors to consider, such as demographics like retired persons in Phoenix etc., clearly the downturn is a lot about finding a place to rent. At least this seems a reasonable deduction.

So this news reflects a bit of how the real estate industry reacts to severe economic downturn, even recovery from. Big, successful real estate entities turning to the most efficient and effective sales helpers, Trulia in this case. And the people who fuel the market, those seeking a roof, reacting depending on the local and national situation. The final conclusion points to the mortgage situation forcing this new rental trend too. The tougher it is to buy a home, regardless of the savings, the more pressure is put on the supply end of the rental market.

We'll keep an eye on these trends, but in the meantime agent's listings getting better air time on Trulia, would seem to be partially defeated by the rent vs. buy trend, at least some.

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