UPDATE: There has been a juxtaposition of failed real estate strategies which created our current situation. The city orange tagged many apartment buildings in the last couple of years. Government policy wanted to make everyone and their pet a homeowner, putting hundreds of marginally financed people in houses. The crash has now reverted them back to tenants, but angry, resentful tenants. Overall, as William Bendex would say at the end of the Life of Riley, "What a revolting development this turned out to be." A fellow blogger cut and pasted several articles on our wonderful new rental environment. I thought I'd give an actual report from the front lines. If you want optimism or false solutions, go to his blog or City Hall.
Apr 29, 2011
The $25,000 House
A local blogger recently did a series of posts on the improving rental market in the Valley, and what the cities should do to prosper most from the trend. He combined a number of utopian concepts, which seem somewhat incompatible in the real world of eastern Pennsylvania. He wants affordable housing and upperly mobile housing, if not side by side, close by. The starry eyed call this mixed income neighborhoods. I think what they fail to understand is that this is Allentown, not Manhattan. We are a horizontal community, not constricted in area. Although he cites rising rents, he doesn't understand the specifics. Rents are rising in the suburbs, away from the mixed income neighborhood. Higher rents in center city are only the formula for higher vacancy and turnover rates, part of the learning curve for newer landlords. The tale of the tape is the real estate listings, and more indicative, the deed transfers. In Allentown there are currently 62 houses for sale under $50,000. This past fall and winter, the deed transfers have been dominated by dozens of homes, purchased for rental, by investors for $25,000. This low cost of entry has saturated the rental market with $700 a month homes. The house pictured above is near 12th and Linden Streets, and can be purchased for $16,000.