I attended the Real Estate Finance Association’s (REFA) fall conference this morning. There were a series of speakers and panelists all of which had tremendous backgrounds. One guy in particular, William McLaughlin of Avalon Bay Communities spoke about apartments and the multifamily sector.

The truth is most of my readers and most of my clients wouldn’t be interested in the bulk of what he had to say because we’re talking about an organization with THOUSANDS of units and very large complexes, not exactly an ‘Independent Investor’. But one thing that was said that I think is important is that residential rents in our area are trending up. It doesn’t take a rocket scientist to figure out why either.

For a long time money was easy to come by. I used to know a Countrywide mortgage broker who had a program he said people in his office called a Pulse Loan. You guessed it, if you had a pulse, you got a loan (look where that’s got us). And the point is this, if you can walk into Countrywide and borrow $300,000 with no money down and make some ‘exotic ARM’ payments at $1250 a month or $1400 or whatever it is - why on earth would you rent at $1800? You wouldn’t, not while everyone you know is getting rich off home equity and buying boats - right? Well as we’ve discussed before that’s gone, toast, kaput, over.

There is a flight to rentals in a big way right now. You get foreclosed on, you go rent. You just got out of college and barely have a job, you rent. You had a few bumps in the road and a few late payments on your credit score - right now you are renting. Good for us! Expect this trend to continue for a while. This means that you while you still have to be cautious on your buy-side and negotiate the right deal, you can probably count on premium rents for a premium place, and you can probably count on decent rents no matter what. Finally some good news in the market.