Demand for luxury rental units has increased as wealthier individuals who can afford to buy are deciding not to, according to brokers and real estate analysts in affluent areas of the country such as New York City, Chicago and San Francisco.
“More affluent Americans are opting to rent as oppose to buy,” says Jack McCabe, an independent real estate analyst and CEO of McCabe Research and Consulting in Deerfield Beach, Fla. “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 they're paying top dollar to rent.
A year ago, I wrote of the nationwide trend toward high rise development in the suburbs and away from the cities. A move toward luxury rentals and away from ownership could accelerate this trend. This trend could also be increased if urban financial troubles continue to destabilize urban real estate markets.