[quote=scaredycat]all the people in the homes are renters who aren’t renting rentals. so it seems like it has to increase the number of rentals avilable on the market, assuming the people staying in the homes would otherwise have rented rentals and not just lived in their vans or crashed at friends’ houses.[/quote]
I believe that it would result in very nearly ZERO net change in supply and demand of rentals. Here’s why.
Demand side:
If they were foreclosed on, the former owner would be in the market for a new unit. Net result to demand: one new renter.
Supply side :
Once the house is foreclosed and sold it will either be owner occupied or rented out. I’ll address three cases (sold to investor for rental; sold to one who was previously in a rental; sold to move-up buyer)
1. In the case where it is rented out there is an increase of one additional rental unit. Net result to supply: one new rental unit.
2. If it is sold to someone who was previously renting, their previous rental is available. Net result to supply: one new rental unit.
3. If it sold to a move-up buyer, then they have to either sell or rent out their house. If they rent it out the net reult is one additional rental unit. If they sell then either their buyer or their buyer’s buyer (or someone further down the chain of move up buyers) is a previous renter. Net result : one additional rental unit.
