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Foreclosures and the Dream of Homeownership: Housing Downturns Lead to Thriving of Rental Markets

The subprime loans mess which caught many mortgage companies and banking institutions red handed have also contributed to an oversupply of properties in places such as California, Florida, Phoenix, Las Vegas and elsewhere. At the same time, many industry observers are reporting that the glut of properties has definitely put the brakes on rent hikes in many cities. With the exception of coastal cities such as San Francisco and Miami, many rental companies and property management firms have a lot of vacancies. But this is not going to be this way for a long time. As more and more people are losing their homes, they will have to find some cheap, affordable apartments to move into. Thus far, many homeowners are trying to ride the foreclosure waves. They have washed off their hands and take off. While they have to wait until the housing market rebounds, landlords can afford to increase their rental fees over time. Depending on the location of these rental units, they may have to try to keep their tenants by offering them some freebies. Many tenants are getting out of their leases in order to live in houses that have been sitting empty for a long time.

There is no doubt that the sinking of property values and the rise of mortgage payments have caused many Americans and international investors to miss the American Dream. For many of them, these forces constitute a real nightmare. These problems surface at a time when the economy is going on the brink of a recession. The rental market Rebounding is not too far away, according to many specialists.

What goes up must come down. That is what many flippers knew. So they went around on a shopping spree in Las Vegas, Phoenix, Arizona, California, Austin, Texas and Florida. The stories of these fly-by-night investors wanting to pay cash for hundreds of homes to be built are now being examined by the federal authorities who want to check for any inappropriateness and illegal activities. According to reports published by NPR and many other news-collecting and reporting agencies, the market was ripe for fraud by all kinds of people. When the homes were growing in value, they became cash machines. Homeowners refinance their homes every so often. They pull money out for all kinds of shopping expeditions. Now, they are about to lose their homes in foreclosure. The out-of-town investors or flippers cared only about buying homes which they flip for a quick profit. When caught by the housing downturn, they run away as fast as they can. So now many blocks of houses are left vacant and are amassing dirt. The grasses are already turning brown. The fences are coming down. The weeds are taking over. Many cities do not know what to do with them. At the same time, property tax fees are not being collected. Some city officials are enacting laws to deal with this rash of vacancies and flights. Who was supposed to know? The banks were too busy making money. The real estate agents were too busy bragging about their commission rates. Everybody had something to gain except the poor, ill-advised homeowner who did not know the name of the game.

Go to any U.S. neighborhood and you will see the ruins left behind by the high spike in house values over the past few years. Complete neighborhoods seem to become ghost areas. At the same time, those who continue to live in those neighborhoods, those who are riding the bad times, are seeing their properties being devalued. Foreclosures are like infections. They happen in the best of neighborhoods as well as the shantytowns, the ghettos or flavelas. Recession is looming.

PureSense Is Coming to Fresno: PureSense is Relocating its Headquarters to the Central Valley

PureSense sells systems that measure soil-moisture levels by using wireless sensors, then analyze and present the data to customers on an easy-to-use Web-based interface. It is a company that develops water management tools and is present at this year's Wold Ag Expo in Tulare. Developing high-tech tools for farming and tending livestock is becoming a growing industry. The World Ag Expo features quite a few of them this year. A few blocks away, I observed the best all-in-one lawnmower is developed and marketed by an African American. The World Ag Expo gives a chance to everyone with a good idea. The manufacturer of this lawnmower is able to make contacts with various foreign investors. At the same time, he is being offered so much money to sell his inventions. He has refused. PureSense has just landed some $4.5 million in investment capital. The company can only grow with this type of investment.