The changing face of the American dream…

Home ownership used to be part and parcel of the American dream but this is no longer the case. The American dream has found a new direction that according to experts, is here to stay for the foreseeable future. In a slow recovering economy property sales have plummeted and it seems renting is the way forward.

The American real estate market has suffered greatly over recent years and with employment higher than ever and credit agencies still unwilling to lend, buying a property is no longer an attractive prospect or sometimes even an option for those looking to settle. People are understandably cautious about the future and are either choosing not to buy in a distressed market or simply cannot get a mortgage. The rental market in the majority of cities has recently taken a dramatic new direction as more and more people are choosing to rent on a long term basis.

Trulia.com previously released a list of the top ten American cities with the largest increases in rentals by comparing change from the third to the fourth quarters of 2010. Additional data, including unemployment, median incomes, home values and rents is from City-data.com.

San Diego-Carlsbad-San Marcos, CA
Rise in renters: +5%

San Diego statistics:
Median income: $59,901
Unemployment: 10.1%
Median house or condo value: $445,500
Median rent: $1,242

The vacancy rate for rental apartments in San Diego went down to 4.6 percent in the last quarter of 2010, from 5.0 percent the previous year, according to data from the property research company Reis. Home prices in the San Diego metro area are expected to rise 3.5% this year, according to a forecast from Real Estate Solutions.

Memphis, TN-AR-MS
Rise in renters: +6%

Memphis statistics:
Median income: $34,203
Unemployment: 10.2%
Median house or condo value: $ 101,400
Median rent: $745

Many rental properties in Memphis are owned by out-of-towners, says Jim Reddy of Memphis Investment Properties, in an article in the Memphis Daily News. He puts his own company’s extra-Memphis owners at about 80 percent, including investors from New Zealand and Australia. The article also notes that in January the average home in Shelby County sold for $50,000 or less.

Charlotte-Gastonia-Concord, NC-SC
Rise in renters: +6%

Charlotte statistics:
Median income: $49,779
Unemployment: 8.7%
Median house or condo value: $175,600
Median rent: $811

It’s a good time for investors in rental properties and not so good for renters in Charlotte, because increased occupancy in rentals means fewer enticements, higher rents, and possibly even shortages, The Charlotte Observer reported last month.

New Orleans-Metairie-Kenner, LA
Rise in renters: +6%

New Orleans statistics:
Median income: $36,468
Unemployment: 9.1%
Median house or condo value: $192,600
Median rent: $882

The picture painted by the Department of Housing and Urban Development is not a bright one. Median rent has increased since Katrina—from $662 to $882 (adjusted for inflation). Supply of available, intact rentals plummeted after the storm, so perhaps this increase in rentals is a good sign for a troubled city.

Worcester, MA
Rise in renters: +6%

Worcester statistics:
Median income: $47,415
Unemployment: 9.5%
Median house or condo value: $230,100
Median rent: $833

When single-family homes won’t sell for significantly less than their purchase price, many owners turn to renting them out, notes the Worcester Business Journal. The renters of these homes, in turn, are those reluctant to enter this home-buying market, and the high-end rental market has seen an uptick as well

Columbia, SC
Rise in renters: +8%

Columbia statistics:
Median income: $38,807
Unemployment: 15.2%
Median house or condo value: $165,700
Median rent: $756

The Columbia housing market continues to “remain in hibernation” until the third quarter of this year, according to studies by Fiserv and Moody’s Economy.com cited in a report by The Mather Company. Prices are expected to drop before possibly stabilizing by year’s end.

Syracuse, NY
Rise in renters: +9%

Syracuse statistics:
Median income: $30,075
Unemployment: 9%
Median house or condo value: $84,400
Median rent: $668

It’s the same old story you’ve heard in other cities: buyers are reluctant to risk buying in Syracuse, and New York’s loss of residence is being felt in this city, which has more than the usual amount of vacancies, says Housing Predictor.

Bakersfield, CA
Rise in renters: +10%

Bakersfield statistics:
Median income: $52,677
Unemployment: 11.5%
Median house or condo value: $196,300
Median rent: $919

Houses are being built in Bakersfield, and perhaps they’ll even be owned by their occupants: Kern County had the most housing starts in 2010 of the Central Valley markets, reported Bakersfield Economic and Community Development. In addition, the U.S. Department of Housing and Urban Development forecasts: “Increasing population and a slowdown in the shift to homeownership are expected to support the demand for 2,400 new market-rate rental units during the next 3 years.”

Greensboro-High Point, NC
Rise in renters: +11%

Greensboro statistics:
Median income: $38,694
Unemployment: 9.6%
Median house or condo value: $143,800
Median rent: $714

The number of homes for sale in Greensboro has decreased by 12% from a year ago, and the number of newly listed homes is down by 22%, according to the Greensboro Home Market Report.

Toledo, OH
Rise in renters: +16%

Toledo statistics:
Median income: $32,325
Unemployment: 11%
Median house or condo value: $92,900
Median rent: $602

Rents are up and vacancies down—so goes the by-now familiar report from The Blade in Toledo, Ohio. Vacancy rates are down at year’s end to 7.7% from 10 earlier last year. This is attributed to the region’s high foreclosure rate.

This is all great news for those wishing to invest in rental property in the U.S. Low property prices, reluctance to buy, higher demand for rental properties and higher rents in most cities means that the face of the real estate market is changing for the better for smart investors. Don’t miss out!