A recent article on CNBC’s website claimed that because of the uncertainty of the housing market, even wealthy Americans are giving up their mortgages in favor of renting.
Apparently the risks of owning during this economy have now outweighed the costs of pricey luxury rentals for many of the country’s richest citizens. The article gave the example from Aaron Galvin, of Luxury Living Chicago, who had rented 30 percent more luxury apartments this year over the last.
“The cachet that came with owning seems to be gone now,” he said.
And from Jack McCabe,of McCabe Research and Consulting in Deerfield Beach, Florida,
“More affluent Americans are opting to rent as oppose to buy. Within the last year, so many people have seen their family and friends get burned in real estate. They don’t see it as being a risk free investment as they used to.”
And the trend seems to be consistent in many cities with the most high-end real estate. In Manhattan, for example, the article quotes one expert who says that there were 200 new leases signed for rentals with a price tag of $10,000 a month or more during the third quarter of 2010. That is more than twice the number signed the previous year.
The same is true in San Francisco. Just across the bay in Marin County, rentals are now hot commodities among the wealthiest residents, a huge shift from last year when there was very little demand for homes renting for monthly payments of $7,000 or more. This seems to be a popular choice among the technology industry elite there.
“They’re entrepreneurs. They would rather put their cash in their business,” said Darcy Barrow of Foundation Rentals & Relocation.
“And get a greater return,” added husband Christopher Barrow.
So, at least we can take comfort knowing that its not just the poor and middle-class who are worried about losing our homes or at least losing the value of our investments. It’s the rich too. We’re all worried together.