I have a client who bought a brand new home in South Reno in 2005. At the time we thought she was getting a great deal in a great location at a 2004 price, thanks to some flipper that fell out of contract with the builder because he couldn’t secure another buyer fast enough. So in goes my client, and everyone’s happy.
Fast forward to fall 2007. Her adjustable rate mortgage resets to some horrendously high payment that she can’t really afford. She goes through all her options and gets on the phone with the bank. After three months, four phone calls, and many pages of documentation proving income and expenses, the bank lowers her payment.
Still, the house is too big, and she’s looking for ways to reduce monthly expenses. She decides not to sell because foreclosures in the neighborhood have driven down values significantly, and she’s not ready to take that hit on equity. Fortunately she put 20% down when she bought, so she figures she can rent the house out with only a small monthly loss. She’s done the math and figures that even with this loss, she can rent a smaller place for less that’s cheaper to heat and cool and still save money, so she goes ahead and puts her home on Craigslist.
She connects with a family from LA. They’re relocating for the husband’s job but can’t sell their house there, so they’ve decided to rent out their own house and rent here as well. My client goes looking for a smaller place and finds the perfect little cottage in Old Southwest. Turns out the cottage owner couldn’t sell his house for what he wanted, so he’s renting it out as well.
Which makes me wonder… how many reluctant landlords are there now? Renting their houses instead of selling? And how many rentals like these can our market absorb? There are reports on the rental market in Reno-Sparks, but they’re based on multi-units versus single family because there’s really no reporting mechanism for the thousands of individual landlords out there. It’s definitely a shadow market that would be interesting to track.
stjoe
The problem is that NO ONE knows where the BOTTOM is. This downturn could last another 6 months or 6 years. Think how your client will feel if prices drop another 40%. For that reason, when I sell my house this fall (I am moving into the Montage), I will take whatever I can get. I learned a long time ago, that the first loss is the sweetest loss.
SJ
BanteringBear
“I have a client who bought a brand new home in South Reno in 2005. Fast forward to fall 2007. Her adjustable rate mortgage resets to some horrendously high payment that she can’t really afford. She decides not to sell because foreclosures in the neighborhood have driven down values significantly, and she’s not ready to take that hit on equity. Fortunately she put 20% down when she bought, so she figures she can rent the house out with only a small monthly loss.”
Unbelievable. Somebody should talk some sense into this woman, for her own good. It’s just one terrible decision after another for this lost soul. She needs to sell the house for whatever she can get, and NOW. She also needs to accept the FACT that the down payment is gone, vanished, never to return. At this point, it’s about salvaging her credit. Soon, there won’t even be time for that.
stjoe
I agree with BanteringBear. She needs to get out now before she destroys her credit.
SJ
smarten
Good subject Diane. It’s definitely one a number of us have alluded to in the past.
Your questions [and my observations] are:
1. “How many reluctant landlords are there now renting their houses instead of selling?”
A) Thousands [see below]. Remember Guy’s prior research that revealed nearly 50% of all listings are vacant?
But many are not actually renting. Instead, they’re advertising their SFRs for rent at bogus pricing with the option to purchase [another subject some of us have alluded to in the past]. The intent is really not to rent but instead, to “hook” some buyer under the guise of lease to own. Craigslist is overflowing with rentals like these.
2. “How many rentals like these can our market absorb?” and,
A) Interesting question. It’s a factor of supply/demand. Diane and I come from the South San Francisco Bay Area where the vacancy rate is typically under 3%. I remember seeing something in the press recently that talked about a 7% vacancy rate in Reno/Sparks. So in order to rent, the rental price has to be aggressively priced so the alternative to buying is striking. And I think that price in Reno/Sparks can’t support anything break even for the owner who purchased in 2004 with only 20% down.
3. Are the “thousands of individual landlords out there…a shadow market that would be interesting to track?”
A) Absolutely! But I don’t know how you track it! Most of the major trackers of rental housing limit their search to apartment complexes of >25 units. I did a quick search on just craigslist for Reno/Tahoe. I typed in the keyword “Reno” and turned up nearly 2,350 rental listings. Now some of these are duplicates; some are apartments; some are “near” as opposed to “in” Reno; etc. But that gives you some idea.
As I’ve said many times before, until the disparity between the cost to rent versus own is reduced; and as long as the SFR vacancy rate is as high as it is; there are few reasons to become a Reno/Sparks homeOWNER!
Dave
stjoe, congrats on moving into the montage. I’m looking forward to checking out that building.
You’re also right about no one knowing exactly where the bottom will be, but we can use things like the ratio of rent to housing prices & models based on previous housing downturns. I’m guessing these reluctant renters are holding out in hopes the housing market improves. I think we may have stabilized at a slower rate of decline but it will be a while before we see any price appreciation.
To put these people in another perspective, their situation is very similar to purchasing a stock, watching it decline against you and just wanting to get out at break even. There’s just something dramatically psychological about taking a loss and the time it takes to come to terms with the loss.
I’m actually moving to the Reno area soon and despite my bearish views on the housing market (across the US), I did entertain the idea of buying. After running the numbers, and considering the fact that I’ll most likely be in the Reno area for < 5 years, all signs pointed to renting.
Re: The lady in your example. It’s really a case by case basis if she should sell now. If she can afford to make the payments / consistently keep a renter in place for the next 5-6 years (and maybe longer), then it might be worth holding on to the house. She also needs to take into account, that just because the house is put on the market now, doesn’t mean it will necessarily sell.
I hope this isn’t a thread hijack and if it is feel free to disregard my question. I’ll start by saying I’ve truly found the blog and all of its contributors to be extremely helpful. I’ve been trying to figure out what internet provider in reno is the most reliable & provides consistently fast speeds. After searching I haven’t really found much. Any comments/insight would be appreciated.
Sully
Dave; you’ll probably end up with ATT DSL.
Charter has its cable, but goes out a lot; wireless is available in some areas (Minden) which is better than cable but slower than DSL.
Also, the price seems better with DSL.
SmartMoney
It also shows all the hidden inventory that is out there. Once prices start to rebound, all those wanting to sell will list their houses, desperately trying to get out, this will once again put downside pressure on the real-estate market. It will be ten years before that lady sees her 2005 price again.
stjoe
If you think it is bad now, pray that oil does not sky rocket up to $200 a barrel. At that level gasoline will cost $6-$7 a gallon. Think of all the people who live in Minden, and Carson who commute everyday to Reno. Heck even the people who live in Somersett will take a beating.
Lets see a round trip commute of 60 miles a day in a car that averages 15 miles a gallon will cost $24-$28 a day; $120-$140 a week; $6,000 – $7,000 a year. That has to affect the price of housing in the outlaying communities. It makes me will good that I live less than 5 miles from my office.
SJ
sistajoy
We signed up with millenicom when our daughter was deployed and are pretty content – unfortunately where we live -no cable-so anything was better than dial-up
Dave
Sully,
Thanks. That helps a lot. Dealing with Charter’s outages would have been a nightmare.
SmartMoney,
There’s also a lot of people holding out as long as they can. Some people may not be able to hold out for prices to start rising again before they are forced to put their house on the market.
links for 2008-05-25 | The Computer Vet Weblog
[…] Reno Realty Blog: The Rental Chain […]
DERRICK
I’m curious as to at what price/sqft you folks deem a “good deal”
I recently took a drive to wingfield springs to see what some of the builders are still trying to sell pre-construction for..
what I came across was pretty hilarious…
of the 4 homebuilders I checked out NOT ONE was selling for below
$125/sqft. with some pretty pathetic upgrades to say the least.
however I have found a few listings priced $100/sqft and less.
granted a couple of these homes are being abandonded by the builder and require the owner to pay for a yard front/back, a fence, minor interior things like toilets, and some flooring ( they do have full kitchens installed with granite, nice cabinetry and beautiful tile floors)
Once I crunched the numbers it comes out to about $110/sqft
I am starting to find it awfully tempting to purchase 1 or 2 of these homes.
Sully
Derrick, 110/sq ft isn’t bad. Allen says he’s building a custom for around 134/ft.
But 194-247 a foot for a 25+ year old house that still needs some upgrades is way out of line. Which is what I’m running into. I would be happy at 134/ft.
smarten
Derrick –
You’ve stated on this blog you own one home in Spanish Springs.
Yet you state you’re “starting to find it awfully tempting to purchase 1 or 2 of these homes.”
Just out of curiosity now that a barrel of oil is running $135 or more [BTW, did you take your own advice and sell oil future short?], what exactly is it you intend to do with 1 or 2 additional Reno/Sparks SFRs at $110/sq. ft. +/-? And do you intend to pay cash, or will you be applying for non-owner occupied purchase money financing [and if so, at what rate/terms]?
MikeZ
Just out of curiosity now that a barrel of oil is running $135 or more [BTW, did you take your own advice and sell oil future short?]
STOP IT! STOP IT! I CAN’T STOP LAUGHING!!
DERRICK
132/bbl not 135/bbl.. but anyways.. most likely smarten I would give my current house to my sister who lives not too far from me.. she and her husband have a big family and could most deffinitely use a bigger house.
As to the houses I mentioned I would pay cash for 1, do some work and perhaps live in it.. the other house would be more of a rental, which I would more than likely get a loan for.. what type of loan etc.. Im not sure.. this is only creative thinking I havent decided anything..
my point was that 110/sqft in wingfield springs is unheard of.
relocating buyer
hi all, thank you all for your insiteful comments. we have wanted to relocate to reno for several years, but are now concerned that any house we buy could become a lonely house, as there are so many neighborhoods with so many vacant houses. we subscribe to the campbell letter, and according to his numbers the pipeline is still full and will take a while for recovery.
hi derrick…if you shorted the clm8 or cln8 contract on the nymex, and the sellers come in this week, consider taking your profit at a 24 or 38% retracement. the 50 period moving average on the 10 minute chart is divergent, so the price may try to come back to that technical indicator.
again, thank you all for your honesty.
Lynne B
Dave- AT&T now offers ‘dry-loop’ DSL, which means you no longer have to have a land line through them, rates are $28.99 or $38.99 a month depending on which speed you choose, I agree with the OP who mentioned problems with Charter, another thing to remember about Cable Internet is that your speed will likely deteriorate when there are alot of people logged on in your area
GrandWazoo
Still waiting on the IEEE info, Derrick. As you said you were “recognized” for your work on the 802.11 wireless standard, and as the original spec was released in 1997, you must have been in high school – quite an achievement!
Futuristic Buyer
This is a great website, has been very helpful. My two cents–Renting a great house in South Reno really enabled my family not have to buy a house when we moved to Reno last year from the Portland Area–as Reno prices were way higher if you can believe that? So not only may renting a house prove further losses to the owner, they are actually helping to slow the market down and allow us reluctant buyers to wait even longer.
move to reno?
Renters can be awfully hard on houses since they are entitled to “fair wear and tear.” Not to mentioned failing to pay the rent. I would check out how hard it is in Reno to evict tenants and its cost.
I would sell the house now at a loss instead of renting. Or is I wanted to keep the house, take in a couple of boarders.
BanteringBear
I am now expecting the median home price in Reno to fall below $175k. While I’ve previously suggested it to be possible, I now believe it is probable. There is more and more evidence that banks are holding onto vast quantities of foreclosed houses, for reasons which aren’t entirely clear. Whether they are trying to wait out the storm until prices firm up, or are simply refusing to take their medicine, they’re creating a mammoth amount of shadow inventory. At a certain point they will be forced to dump it. When this happens, prices will plummet.
Add to this backlog of bank owned inventory, future foreclosures, sellers who are waiting out the market hoping for a turnaround, and new houses coming online, and there are years and years worth of inventory.
And finally, the most troubling factor of all; the economy. With skyrocketing fuel and food prices pinching consumers, there are less and less funds available for housing. As we move forward, and the job losses mount, fewer people will even consider buying a house, much less even qualify, in such uncertain times, as they are in survival mode. A rental will suit them just fine.
While a median of less than $175k may seem extreme, even something in the $140k range is entirely possible. Consider where median prices were pre-bubble and it’s not much of a stretch. I think most people are still in denial of what’s to come. Unless there is some sort of massive job creation followed by wage inflation, it’s curtains for housing for decades.
Futuristic Buyer
I agree with Move to Reno? You should see our Arrowcreek rental after 7 years being a rental, but I think the most damage was done to the house in the two years prior to our arrival. It looks like they let their toddler children wander around with melting popsicles and grape juice in every room with carpet. There are broken tiles on most of the countertops, and don’t even think about not having a lawn service or all your landscaping might be DOA. For them to even put this house on the market and get top dollar they would need to invest 100k back into this house. Of course, the previous renters did not pay last months rent or utilities because they knew they weren’t getting their $1800 deposit back! I say cut your losses and get out while you can. Good Luck.
smarten
At one end of the spectrum BB “expect[s] the median home price in Reno to fall below $175k.” At the other we have our stucco oracle from Spanish Springs who predicts the price of oil will plummet, but not the Reno median home price [which he expects to drop no lower than $240K-$245K]. Interesting fodder.
Dave
Lynne,
Thanks. Glad to know they have dry-loop DSL as I most likely won’t need a land line.
——
Re: Where we may be in the housing cycle
A link from The Big Picture
Re: Housing price to rent ratio: http://bigpicture.typepad.com/comments/2008/05/housing-price-t.html
——
And Re: Crude. I was talking about Crude oil here a few weeks ago and a few people thought I was a bit crazy. I’m really surprised anyone would want to step in front of that freight train and attempt to short it. There have probably been more people than would like to admit that they’ve been trying to short & pick tops in crude. They are then forced to cover their shorts and only push the price higher.
I couldn’t agree more with Dennis Gartman who says crude is a non-trade at this point (at least for me).
BanteringBear
I know the oil thing is totally off topic, but billionaire investor George Soros came out this morning to say that he believes oil is in a speculative bubble which will burst as the US and Britain are knocked into a recession.
http://www.canadianbusiness.com/markets/headline_news/article.jsp?content=b052659A
Phil
If things are so doom and gloom here, why is the city of Reno even considering the Winnemucca Ranch project? There are so many things wrong with this project it will be very sad and make me wonder if the politicians are making something on the side.
I can understand the developer making a community for the retirees of California. But is this a healthy way to grow? Call the developement for what it is is!
High paying jobs are needed to create the growth healthy for this city. We have a University, I still wonder how many graduates end up working here? My guess not very many, and this is an indicator of something wrong. Why pay for schools for jobs in other states?
And I have cable, it has never given me problems, nor is slow at times. Maybe I am just too far off the beaten path?
Gina
This has nothing to do with Reno, but I just had to share it with you guys:
FORECLOSURE: South Bay politician has three homes that have gone into default.
DERRICK
“Just out of curiosity now that a barrel of oil is running $135 or more [BTW, did you take your own advice and sell oil future short?]
STOP IT! STOP IT! I CAN’T STOP LAUGHING!!”
Sure is funny huh MIKE!! .. oops did oil drop below 129 today? down 4.00? awwwww//..
stop it stop it stop it I can’t stop laughing!!!
smarten
Hey Derrick; did you or did you not take your own advice and sell oil futures short? If so, at what price did you sell?
And for your benefit since you’re so bullish on stocks, I’m pasting in a posting on ChaseNation: “The S&P 500 stock index finished the Friday before Memorial Day in calendar year 2000 at 1378. Now 8 years later, the index closed at 1376 last Friday, a change of just 2 points over the entire 8-year period (i.e., the change measured is the movement of the raw index and does not include the impact of dividends). The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the US stock market (source: BTN Research ).”
NVMojo
We are still renting and have been for almost two years and we’ve had cable the whole time. Never had an outage or slow service. Half that time we lived at the Sparks Marina and the other half of the time we lived on the southside of town.
MikeZ
did oil drop below 129 today?
Yes, it did. Good luck, you just a few dozen more days like that in a row for your $90 short.
Dave
Derrick,
If you keep picking tops, eventually you’ll be right. And to add to smarten’s question: After you disclose your entry price, would you like to share where your initial stop was?
Phil & NVMojo,
Thanks. That’s good to hear. I called up AT&T today and they told me I won’t be able to get DSL in the downtown area (@ The Riverwalk).
DERRICK
if I keep picking tops I will eventually be right? funny considering every pick in respect to the stock market has been dead on ..
you just havent been around dave.
called ori, and pmi a buy: next day=36% gain.
Called to short several home builders LAST YEAR= EASY 40% gain
Called to short the nymex crude contract at 129…= we shall see what happens!
Called the RE bottom (in respect to median price) at no lower than 240-245k if that!
sorry dave but it appears to me my calls have been more right than wrong! .. my bank account concurs as well.
DERRICK
p.s. hey dave, your “freight train” is down 8.00 now in the last 2 weeks! uh oh !
smarten
You’re so full of yourself Derrick.
I’ve asked you two times to confirm you took your own advice and shorted oil futures, and you’ve gone out of your way to avoid answering the question. The only conclusion I can reach is you DIDN’T!
You take credit for calling PMI and ORI and the next day they were up 36%. Yet you neglect to point out that the day after that they were down close to 20%. When I called you on this fact of life [those who live by the sword die by the sword], again you declared yourself the winner – you asserted you were savvy enough to place stop orders that saved you from plummeting all the way back down with your picks.
You take credit for calling the local SFR bottom, yet you refuse to share your definition of “bottom.”
You assert Reno/Sparks median prices will get no lower than $240K-$245K [and we’ll soon learn if your prediction is accurate].
Why don’t you take a look at today’s RGJ Business Section [pages 5A-6A]. According to Wayne Capurro, President of the Reno/Sparks Association of Realtors [a true real estate professional]: “Median home prices will likely continue to see declines in the next couple of months…With increasing sales numbers and decreasing median prices – those two things can’t continue very long…I’m not ready to say that this is the end (of the housing decline), but this sure looks to me like the beginning of the end” [you’ll recall the end takes place on January 11, 2009].
And according to Brian Kaiser [also quoted in the article], housing and real estate analyst for the Center for Regional Studies, “I don’t think we’ll truly be able to say we’ve found the bottom of this market until we see several consecutive months of data showing flat or increasing sales volume AND flat or increasing transaction PRICES.”
Other than your Spanish Springs purchase, why don’t you share with us anything else you’ve purchased as an investment that WASN’T right on the mark?
And while you’re at it, please explain to me how your call of the Reno/Sparks housing market bottom has improved your bank account [which you assert concurs with your predictions]? Did you buy futures in regional housing?
My experience is 27 year olds generally think they know everything about everything. But as they get older, they learn [generally the hard way] otherwise. But what do I know? You’re Derrick!
Doofus
I’m shorting DERRICK futures!
Phil
Talk about a thread all over the place…..
Diane Cohn
Okay, enough. Can you all please stop fighting with Derrick about his oil futures, identity, assets, whatever? People are starting to complain, and it’s making the blog look bad. Please, let’s keep it on topic, minus the personal attacks. Thanks!
BanteringBear
Diane posted:
“People are starting to complain, and it’s making the blog look bad.”
It’s totally pathetic that people would waste your time by complaining about comments on your blog. Have these people ever heard of freedom of speech, and better yet, learned how to gloss over what they don’t like? Unbelievable.
DERRICK
smarten, why is it that you forget to mention my call to SHORT the homebuilders stocks LAST YEAR?
was I wrong on that as well?
DERRICK
sorry diane, they can’t help it… they only dream of one day being the oracle of sparks!
I agree however.. Someone asks my advice on an investment, to which I simply gave my opinion.. yet now everyone is just dying to know my financial status, investments, retirement/401k, how many homes I own, my investments that haven’t paid off, etc.. etc.. // next thing they will want my social security number!! ( unless ofcourse mikez AKA stalker alreadys knows that??
KB
Derrick,
Not a lot of people appreciate your investment style; I however think that your style has merit and everyone on this blog can learn from it (myself included) Right now you are shorting oil, similar to those who shorted the tech stock in late 2000 or those that sold houses in early 2006, at the time you would have been called a fool as everyone knows that the tech have created a new paradigm or that real estate never goes down. But if you can spot the inflection point of the market you will make tidy profit. The contrarian view described in an earlier post as standing on the track of a freight train is especially apt when looking at the prices and sales volume of our local real estate market where everyone knows that prices can only go down and that a flood of foreclosures is going to hit the market and everyone is going to loose their jobs and the dollar is going to be worthless and on and on and on. Now is the time when the smart money is buying. If one was to wait until the market has turned, you will loose out on the best possible return. I would be the first to admit that you should not risk what you can not afford to lose, but it you truly are an investor with a well diversified portfolio, the only better time to buy than today was yesterday.
DERRICK
Thank you KB I truly appreciate the fact that you can understand my position..
many on this board told me to keep quiet when I mentioned it was a truly great time to make money by shorting several homebuilder
stocks.. Ie: “stocks have nothing to do with this blog etc..etc.”
fast forward to now and I couldn’t have been more right.
I also made a call a while back on a couple mortgage insurers, the VERY next day they both were up a combined 38%.. Any smart investor sets a stop loss on ANY purchase they make.. . smarten goes on to claim… BUT they went down almost 20% the following week.. So I’m assuming an 18% gain in 1 week is BAD? heh heh ofcourse its not..
Now I mention that I am shorting oil (129).. and YET AGAIN I get a rash of Sh*t, excuse the language.. and once again I have a feeling it will turn out to be a very good call..
keep in mind KB these are the ONLY 3 investment suggestions I have ever posted on this board…its obvious that people often get upset, frustrated, perhaps even jealous to hear advice and not act on it. knowing they would of made a hefty profit in doing so. interestingly I am the ONLY one here who has put my reputation on the line, with ALL of these calls..
Allen Murray
I must say that I do respect Derrick for putting himself on the line like he does, he’s not afraid to put his money where his mouth is. Also, keep in mind that some of us younger investors have a higher risk tolerance than you old guys, as we should. KB makes a similar point that I have in the past, that most people are lemmings and follow the news headlines. This Doomsday talk is just as bad as all the hype of the boom. The trick to making money is knowing when enough is enough, and to be on the leading edge of a turn around. With that comes risk, that’s part of the game. Just like Monopoly.
Sully
Although the oil shorts don’t have much to do with this blog, they show a good example of supply/demand. As prices at the pump go up, demand goes down.
I was in Carson the other day. A mini mart in the middle of town had gas at 4.15; islands were vacant. At the north end of town, an Arco had gas at 3.84; islands were full!
Here in our RE market; under 300K is active and over 400K is just short of inactive. I’ll be very surprised if the May sales show much action in the 400K+ range.
smarten
Diane asks us to stop hitting on poor little Derrick. Yet it’s DERRICK who invites our hitting. If he shut up about his stock picking acumen, some of us wouldn’t respond and Diane wouldn’t have to intervene. The problem’s Derrick Diane, and if you want some of us to stop responding, you really need to go to the source of the problem.
The problem with Derrick’s predictions is at least twofold. First, this ISN’T a stock market blog. It’s Washoe County real estate. When posters go off topic, it’s appropriate to call them on their transgressions. I did this nicely a couple of times with Derrick and look where it got? So once he stepped over the line, the gloves are off.
Two, Derrick’s real good at talking the talk. But he really doesn’t follow his own advice. He’s an armchair Monday morning quaterback. It’s one thing to actually risk your own dollars on an investment. It’s guite another to talk as if you did and then claim credit after the fact.
And BTW, Derrick’s NOT the only person on this blog who has allegedly “put himself on the line.” BB, RI, Lindie, myself and others [even Allen] have repeatedly done so. But it’s always with respect to the purpose of this blog – Reno/Sparks/Washoe County real estate!
So please Allen and KB, stop encouraging this person to dis Diane’s blogsite. And Derrick, please honor Diane’s request to stop the commentary regarding your stock market investing skills. You’re the real cause of the problem. As long as you don’t bring up the tangential subject, the rest of us won’t expose the truth about you. Why can’t you understand and abide?
Sorry Diane, but if you want to put a stop to all of this maybe you need to exercise editorial control over his posts?
DERRICK
smarten with all due respect you have NO IDEA where I invest my money. monday morning quarterback? your a complete idiot.
DonC
The problem with being short is that there is no limit to the downside. It’s the opposite of being long, where your losses are capped but your upside isn’t.
I only mention this here because with the Shiller/Case index you can go short or long in the housing market.
DonC
Forgetting about investments for a moment, there was a timely (for this thread) article in the NY Times this week about renting versus buying. I’m sure some here saw it.
The basic idea is that you can calculate a “Rent Ratio” which gives you the relative extra cost of buying versus selling. In this case they derived the ratio by simply dividing the sales price by the annual rent.
The ratio can of course also give you an idea of how over or under heated a housing market is. If the historical ratio is 15 and the current ratio is 30 then it’s a very hot market. If it’s 10 then it’s not.
Unfortunately Reno was not a city for which they calculated the Rent Ratio. But you can find the article, along with a nifty program which will graph how long it takes for ownership to pay off, here:
http://www.nytimes.com/2008/05/28/business/28leonhardt.html?_r=1&scp=7&sq=renting&st=nyt&oref=slogin