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Featured Advisor

Srbo Radisavljevic
Managing Principal/Investment Advisor

Edge Portfolio Management


State: IL

At Edge, a low client to advisor ratio allows for personal and customized service for each individual.  Our goal is to work as a team for each client to provide not only portfolio management but wealth coordination and financial planning.  We make every effort to have frequent communication with our clients and to provide timely response to calls and emails.  I also enjoy spending time with my wife and three kids, following Chicago sports, enjoying ethnic cooking, and serving as a school board member for Norridge School District 80.

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Rising Rents May Help Housing Market

Rising rents could boost demand for housing

A few years ago, a prospective tenant could get a free TV or month’s rent for signing a lease. Sadly for renters but happily for landlords, those days appear to be numbered. Demand is up and rents are on the rise as apartment occupancy rates return to pre-Recession levels.

The trend could ultimately pull the housing market out of its five-year slump. Economists predict rising rents will eventually make homeownership look more attractive as the costs of renting match or exceed the costs of buying.

Occupancy rates are increasing in cities across the country, according to Axiometrics, which tracks the rental market. Rates rose above 95 percent in the Denver, Austin and Seattle areas in April, while rental housing in the Boston and San Jose areas are, respectively, 96 percent and 97 percent full. Appraisal Research Counselorspredicts occupancy rates around 98 percent for 2011 in the Chicago area. Increasing demand will drive area rents up as much as 8 percent in 2011, following the 7 percent increase that took place in 2010, the group said.

“The vacancy rate is back to early 2008 levels, and is not far above the rate of 2006,” reports the finance and economics website Calculated Risk. Renters now make up 33.6 percent of U.S. households, up from 31.16 percent at the peak of the bubble, according to the website rentbits.com.

While rental rates are increasing, homeownership rates continue to drop and are approaching rates typical of the market before the boom and bust years. The rate of homeownership was 66.4 for the first three months of 2011, according to the U.S. Census Bureau, after reaching a peak of nearly 70 percent in 2004. The sharpest declines took place among Americans younger than 35, who saw homeownership rates fall 5.2 percent from 43.1 percent at the end of 2005 to 37.9 percent in March. Rates fell from 69.7 percent to 64.4 percent for Americans 35 to 44 years old.

In the aftermath of the housing market collapse, fewer Americans think buying a home is a good investment. Investors surveyed by Spectrem Group say the Recession has taught them a hard lesson about homeownership. About 40 percent of both millionaires and non-millionaires surveyed in December say they have learned their home is not a stable financial asset.

The trend is especially true for younger Americans, who are ambivalent about the benefits of home ownership. Nearly half – 49 percent – of Americans aged 18 to 29 said owning a home is too risky, while an equal percentage said owning a home is a sound investment, in a poll released in March by Allstate Corp.