Sometimes the absence of news is what the news really is. Buried deep in today's RealFacts announcement of continued flat average rents across the Sacramention region are a couple of lines that just jumped out at me:
"Today's headlines are about the troubles on Wall Street that were triggered by the subprime mortgage crisis. How has this loan crisis affected large apartment complexes? To date there have been almost no foreclosures on apartment buildings thanks to the stability of rents and occupancy."
I called Caroline Latham, owner of Real Facts, a Novato-based researcher that tracks the apartment industry nationally, and asked her why apartments aren't being foreclosed upon. (We'll have more on this subject in Friday's Home Front column)
Latham said: "There are reasons for that. One is the standards for lending on investment real estate are somewhat different and have been for quite awhile compared to residential real estate.
"The standard of investment lending was you have to put at least 20 percent down. None of this nothing down. You had to be able to show it was going to cash flow enough money to pay off the loans. There were stricter standards."
It's not a breakthrough concept by any means. Just simple common sense. And the apartment sector now never makes headlines for repossessions and renters getting spilled into the street. As I am saying in the lead off to tomrorow's column: Here's to 800 square feet of serenity - two bedrooms, one bath and a plant on the deck.
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