Patrick Ellis felt at home in the three-bedroom Meridian ranch house he shared with his fiancee and their infant son. There was a backyard for the dogs and a roomy garage where he could do weekend projects. At $975 a month, it was on the high end of the couple’s budget, but it was worth it.
Ellis, 28, and his fiancee, Tiffany Maldonado, were saving up for a down payment on a house. After their lease ended in February, they decided to stay in the house on a month-to-month basis until later this year.
Two months later, Ellis got a call. Like many other Treasure Valley renters, he was informed that his landlord was putting the house up for sale.
Renting or buying, this is not a good time to be house hunting in Ada County on a short deadline.
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It is a seller’s market, especially in Boise. Even a fixer-upper in a traditionally less desirable neighborhood will generate a bidding war. Buyers who have enough cash are even promising to cover the difference if their bank doesn’t think the house is worth as much as they do.
There isn’t solid data on how many rental properties are being turned into “for sale” houses. One local property manager said his company isn’t seeing any landlords deciding to sell, and another said it’s happening only occasionally.
“About 85 percent of our inventory is single family homes, and some of them are taking advantage of the current real estate prices,” said Courtney Wolfe, owner of TPD Property Management. “However, it is not a significant amount, roughly about 4 percent of our inventory.”
Rents are at historic highs, and vacancy rates are low.
The average rent for a single-family home in the first quarter of this year was $1,500 in Ada County and $1,099 in Canyon County, based on a survey of 16 property management companies. Just 2.5 percent in Ada and 3.5 percent in Canyon were vacant, the survey found. Apartments were cheaper in both counties, but still had single-digit vacancy rates.
When a homeowner takes a house off the rental market, it accelerates that trend. And it puts renters like Ellis in a bind.
Affordable rentals are scarce, and having just 30 days’ notice makes it almost impossible to buy a house, which takes weeks to months.
‘IT’S JUST AS BAD AS THE SELLER’S MARKET’
Boise resident Summer Wright-Reed was on the hunt this month when her landlord wanted to sell.
Her family of five lives in a four-bedroom, 2,300-square-foot house on “a huge lot” in the North End.
The rent was a steal for the area: $1,100 a month.
Wright-Reed’s landlord is a friend of the family, so she gave her a head’s up a year ago that she planned to put the house on the market. She gave the family notice this past month.
“As far as finding a rental, it’s insane,” Wright-Reed said. “It’s just as bad as the seller’s market.”
The best option she found by mid-June was a house in South Boise that costs a couple hundred dollars more a month. But the property owners said the family would be responsible for home maintenance, such as sprinkler blowouts.
Wright-Reed asked to stay in the North End house a little longer. To her relief, the owner agreed to rent for another year.
“Looking for something in your budget, and the amount of family members you have, it’s next to impossible, especially if you have pets,” Wright-Reed said.
RENTERS OUT OF LUCK
When Ellis went on Facebook to vent about the tight deadline of having to find a new home within 30 days, he learned that several of his friends were in the same tough spot.
“Since we’re moving, I’m trying to sell a bunch of stuff ... and somebody came and bought something. Just chit-chatting, they said, ‘Oh my gosh, that’s happening to us right now,’ ” he said.
Idaho law does not offer tenants much protection from the uncertainty of losing a rental home.
If renters are in a lease, they generally can stay in the home until the lease expires. When the lease is up, tenants may not realize they become month-to-month renters. In that situation, landlords are required simply to give just 30 days’ notice if they want the renters out.
And in some cases, landlords might not follow even those rules in their rush to sell.
“I get a lot of calls of, ‘My landlord is selling the property. He gave me 30 days,’ ” said Drew Dickerson, a staff attorney who specializes in landlord-tenant law at Idaho Legal Aid Services. “Tenants are tending to move out thinking that they have to, when they might not.”
Other jurisdictions have added tenant-friendly laws to their books. The District of Columbia’s law guarantees tenants the opportunity to buy their home. The Portland City Council this year passed an ordinance that says landlords must cover moving costs if they end a lease early or raise the rent by 10 percent or more.
HOME SUPPLY: GOOD FOR SELLERS, BAD FOR RENTERS
There was one house for sale in Meridian that fit within Ellis’ monthly budget — $750 to $1,000 — and zero rentals. Boise prices were out of the question.
“Everywhere that allows dogs is basically a house, and all the houses that I was finding were $1,200 or $1,300 a month,” he said.
The owners gave Ellis an extension on the move-out date in exchange for doing work on the house to get it in shape for listing.
Ellis understood the property owners’ motivation — selling while the real estate market is hot — but it “kind of dropped a bomb on us,” he said.
“I looked for two weeks before I gave up and decided I was going to have to buy a house, because there wasn’t any other option,” he said.
Ellis and Maldonado closed earlier this month on a house in southern Caldwell. It’s cheaper and larger than their rental, but it’s going to double the couple’s daily commute.
“We went from living and working within a 5-mile radius, to now I live an hour away, basically,” said Ellis, who works at a Meridian lumber company. “It kind of just uprooted our whole lifestyle.”
But the rental crunch may be easing some, according to Wolfe and another local property manager.
“We are seeing properties sit on market a little longer, and some rent concessions, which have been something of the past,” said Tony Drost, chairman of First Rate Property Management in Boise.
Drost isn’t sure if that is temporary or the start of a long-term softening in the rental market.
Boise’s rental cycle follows the school year, so there tends to be more turnover and more availability in the summer as leases expire.
But one possible reason could make things easier for people whose landlords decide to sell their home in the future.
“All of the new construction has perhaps increased supply faster than our employment and population growth,” he said.
Tips for renters
Pay attention to your lease. If it’s about to end, you can ask to sign a new one. (Be ready for a rent increase.) If your lease already ended, you’re probably on a month-to-month or “at will” agreement. That means your landlord can give you 30 days’ notice to move out.
Watch for signs. Is your landlord making long-neglected repairs? Painting the house? Replacing the roof? Hiring landscapers to fix up the yard? Did the couple upstairs move out, and now their part of the house is empty? Your landlord may be getting ready to sell the house.
Have a plan. This is especially important for renters with a list of must-haves — a backyard, three bedrooms, a certain neighborhood. Ask friends to send you tips on rental vacancies. If you’ve been toying with homeownership, start researching mortgages and homebuyer programs like those offered by the Idaho Housing and Finance Association. Whether you plan to buy or rent, make sure your credit report is clean and don’t take on new debt.
Know your rights. Get educated by reading the Idaho Attorney General’s handbook or Idaho Legal Aid Services brochures on landlord-tenant law. Call Idaho Legal Aid Services housing hotline at 844-804-0386, 10 a.m. to 4 p.m. Tuesdays and Fridays.