Home Shopping Boom Hits Landlords' Pocketbooks

Housing is a hot commodity in Madison as the trend to buy continues to grow.

But the home shopping boom is now busting the pocketbooks of local landlords.

Becky Socha has rented an apartment off of Watts Road for the last six months. She says it's the best choice for her as she doesn't know how long she'll be in Madison.

"Just getting out of college a few years ago I might not settle in Madison," she says, "I'm not sure and I don't want to get into buying a house or anything else like that right now."

She's one of a dwindling population as "Leasing Now" signs pop up all over the city.

"We have more vacancy than we've had in 30 years now," says property manager Fred Mohs.

The main culprits: low interest rates and an oversupply of rentals.

"The problem is that our apartment developers have built more apartments than are needed for the new people," says Mohs.

Historically the Madison population has been comprised of 60% renters and 40% owners. But in the last few years ownership has risen to 50%, a 10% increase. That trend continues to move toward the national home ownership average of 60%.

Stark Company Realtors West Office Manager, Nels Johnson, says, "We get to that spot and we may go past that spot, homeownership has become a very hot idea."

A hot idea even for first-time buyers.

"We're still a little lighter in homes for sale than we normally would be because we've been selling so many of them and because we have truly new buyers in the market," says Johnson.

To stop the movement of renters, landlords are offering incentives, like the resident referral rate reduction.

"We live off of Watts Road," says Socha, "And if you go down Watts Road you see left and right 'we accept pets,' 'rent now,' 'come see,' 'fun and affordable;' you see signs all over."

But Mohs says the pressure on rental real estate will get worse before it gets better.

"This is not a kind of economic situation that is quickly cured, it takes a long time to get in trouble and it takes a long time to get out of it."

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