RE/MAX Premier Realtor Peter Beckford joins Yahoo Finance Live to explain the challenges renters are facing in the housing market, mortgage rates, alternatives to permanent housing, and how renters are trying to stand out to landlords.
DAVE BRIGGS: Are bidding wars a staple of the pandemic housing boom now coming for the rental market? The median asking price surpassing $2,000 for the first time ever. Peter Beckford is a realtor for Re/Max Premier in the Atlanta area and joins us now. Nice to see you, Peter. What are you seeing in the rental market there? Have bidding wars come to Atlanta?
PETER BECKFORD: They have. They followed the bidding wars for purchases. But indeed, a lot of the folks who are not able to purchase have now found themselves bidding for rental homes. And we've got quite an influx of applicants, and it's getting pretty hectic.
RACHELLE AKUFFO: And as we've seen, I mean, monthly rent hit $2,000 a month there, a record in May. But despite that, we even saw that Gary Berman, Chief Executive of Tricon Residential, he says in any given week, they get 13,000 leads for only 200 homes available. Is this something we can expect to continue for the long haul as we continue to see these mortgage rates go up?
PETER BECKFORD: It's definitely possible. As the market continues to hopefully balance, folks are making decisions between whether or not they want to continue their pursuit of purchasing versus tapping out of that market and going into the rental market and the influx of folks entering that area. I can tell you I've personally had rentals myself up to $3,500 per month that I've seen 50 to 75 applicants within the first 12 hours. So it looks like it's something that will be continuing in the foreseeable future.
SEANA SMITH: Peter, how much are people paying over asking? If you had to average it out with what you're seeing right now in Atlanta, are we talking $500, are we talking $1,000 a month? I mean, put this in perspective for us.
PETER BECKFORD: Me personally, my experience, I've seen offers of like $100 or $200 over what the list is. But I would say probably more importantly is the large applicant pool in the over qualification of that pool has led owners, landlords to be a lot more selective. So those who may be marginally qualified for certain rental at a certain price point or area or whatever the circumstance may be, may be pushed out in favor of someone who may be more qualified than them.
DAVE BRIGGS: And uniquely qualified as in Atlanta, and that is the second highest city in the country in terms of long-term extended stay hotels more than 30 days. People are actually turning to extended stays because they can't afford the rental market. Who is this impacting the most? And are there any solutions?
PETER BECKFORD: Right. I would say that the average blue collar everyday worker is the ones who are experiencing this situation the toughest. Again, as they're being priced out of the regular purchase market, of course, they have a need for housing, good housing, whether it be close to good schools, job transfers, first time home buyers, it makes it very difficult for those folks. So that's who I feel and see it impacting the most currently.
RACHELLE AKUFFO: And in terms of what people are doing to try and sweeten the deal, obviously, people recommending that you go over asking in terms of rent to try and lock it in. But then you also mentioned also seeing people even asking their previous landlords for recommendations as if they're applying for a job. What should people try and do to really increase their odds of locking in a rental space?
PETER BECKFORD: I would say number one, being incredibly responsive. The moment that you see something on the market, you want to approach it. If you can, speak with a listing agent and/or the apartment complex manager on site directly. See what it is that they are looking for that's important to them, and get it to them as soon as possible. Make sure that your credit profile is clear. Make sure you speak with your previous landlord and let them to expect a call of reference going towards them, so they're not caught off guard or miss that call. And yeah, that's really as much as you can do.
DAVE BRIGGS: The purchase price there in Atlanta up 23% year to date. Are you seeing softening of the prices there or any expansion of inventory, or is this just what we're stuck with?
PETER BECKFORD: Yes, funny you mentioned softening of the market. I do see some softening of the market, thankfully. As you know, of course, with the recent increase in mortgage interest rates, it has directly hit home on Front Street and we do see folks that are pulling away from the market, and sellers as a result, decreasing their prices to hopefully get their homes sold in a timely fashion and move forward.
It brings some level of optimism for those who are in the market that instead of having to bid against 20-plus people, they may be bidding against five or less folks now. So it is softening to that extent. Hopefully, and likely, it will continue to do so as the months come close.
RACHELLE AKUFFO: I know a lot of people could really use some of that optimism. Thank you for joining us today. Re/Max Premier realtor, Peter Beckford, thanks so much.