Nicholas Cozza of Spokane is a real estate agent and investor in Washington State. In the article below, Nick Cozza discusses what landlords really think of the real estate housing market craze.
If you’re a renter looking to find a new home in the current real estate market, we have one word for you—yikes! With housing prices soaring roughly 40% in a year alone, apartments being fought over left and right, and rents going up to match, is now a good time to rent asks Nicholas Cozza of Spokane?
During this massive real estate boom, there’s one group we haven’t heard from—landlords. With so much happening all at once, Nicholas Cozza of Spokane County discusses this topic from a landlord’s perspective, and how landlords are being affected from the housing craze.
Bidding Wars Equal Big Profits
Nicholas Cozza of Spokane explains that the United States is facing a housing shortage. Although real estate developers are quickly working to rectify a decade of slow builds, there are now more buyers and renters than there are available homes. This has led to fierce bidding wars between young renters hoping to secure a home explains Nick Cozza.
While this may sound like a nightmare for first-time renters, it’s proving to be a goldmine for landlords. With rental prices already higher than they were pre-COVID, constant bidding wars are driving up prices even further, with many analysts worrying that they’re above true value explains Nicholas Cozza.
From a landlord’s perspective, this is nothing short of a miracle. Without much effort, they’re able to raise prices simply because a handful of buyers are fighting to secure a property. This has become such an issue that NPR is even requesting renters to share their stories. Where it all ends, no one knows but, for the time being, landlords are winning.
Resentments Linger from COVID-19 Policies
Nicholas Cozza of Spokane explains that despite the sudden influx of buyers desperate and willing to pay anything for an apartment, many landlords are still trying to recoup losses from existing tenants due to policies initiated during the peak of the COVID-19 pandemic.
At the time, many people were unable to work and faced evictions and rent hikes. To protect families from eviction during a pandemic, Congress passed the CARES act, which prevented landlords from evicting or raising rents without just cause. Essentially, it gave renters a grace period to miss their payments without any repercussions says Nicholas Cozza of Spokane County.
Yet, despite not paying their rents, many landlords have reported tenants expecting the same level of maintenance and care as pre-pandemic. For landlords, they feel robbed of their livelihoods and resentful of tenants who have no desire to pay back their missed payments explains Nicholas Cozza of Spokane.
Although they are now making their money back from the boom, they feel unable to raise prices on existing tenants despite the losses they sustained during the pandemics peak.
Landlords are Seeing the Housing Shortage as an Opportunity
Nicholas Cozza of Spokane County says that with firsthand knowledge that the current rental craze is a side effect of housing shortages, many landlords—especially national corporate landlords—are seeing this as an opportunity to get into the real estate development market. This has led to several investment firms buying up a majority of the new builds with the intent of renting them out or outright investing in construction according to Cozza.
According to the National Association of Home Builders, roughly 5% of new builds are being sold directly as rental units, which represents an increase from 2.7% just a few years ago. Although these numbers may seem small, they represent roughly twice as many built-to-rent homes. Many of these homes are being contracted and built by corporate landlords such as:
• Taylor Morrison
• Toll Brothers
• DR Horton
Nicholas Cozza of Spokane County says that although they represent a larger, more institutional side of land-lording, this increase in production signals that many small-time landlords may also consider investing in development. With property prices so high and renters fighting to secure a home, it seems that now is exactly the right time for landlords to expand and diversify their holdings.
The Bottom Line
Although the rental market has always been cyclical, the current market is unlike anything we’ve seen before says Nicholas Cozza. With housing prices up and inventory low, now is the perfect time for landlords to cash in. However, it’s important to remember that this won’t last forever. At some point, the market will reach a saturation point where there are more renters than there are homes available.
When this happens, prices will drop, and landlords will be forced to lower their prices to attract tenants. So, if you’re a renter looking for a place in the current market, our best advice is to act fast. Find a place you like and be prepared to put in a competitive offer says Nicholas Cozza of Spokane County.