Planning to rent a house or apartment within the coming semesters? Due to market trends, students may end up spending much more money than they originally bargained for.

"The rental market is generally a substitute for home ownership; that is higher rents encourage more home ownership, and higher home prices encourage more renting.  However, this scenario is different, as prices are coming down on homes, people are afraid to buy," said Dr. Stephen Rubb, associate professor of economics.

He said that since many people can no longer afford their mortgages, they have been forced to sell their homes and therefore they must rent property.

"Sacred Heart University students come to me looking to pay $500 a month with a maximum of six roommates, potentially four, and expect to pay $2,500-$3,200 a month.  However, with re-sales and the mortgage fallout, there is going to be more competition," said Dr. Rubb. 

According to Nicole Etzold, realtor for Al Flippone Associates in Fairfield, people have had to sell their homes due to adjustable rate mortgages, and they are not looking to get back in, which results in an increase for rentals. Also, the price of rentals are going up and becoming more competitive.

"Bridgeport had 4,600 homes under first-lien sub-prime mortgages, with a residential neighborhood a few miles northwest of downtown totaling 1,500. That was the highest figure of any neighborhood in Fairfield County," said the Fairfield County Business Journal.

Still, the demand for rentals continues to soar.

"Based upon the review of current data regarding residential rental stock within the Sacred Heart immediate area it appears that rentals are going to continue to escalate throughout the foreseeable future," said Richard Piazza, president of Premier Appraisal Group in Norwalk.

He also said that demographics throughout all of Fairfield County have been projected over the next five years to be relatively flat for younger job seeking persons, as well as senior long time residents within the community.

"The stagnation of population contributes to the level demand for all forms of services including rental and home ownership.  The anticipated decrease in home ownership resulting from increasing mortgage debt service, real estate taxes, property maintenance as well as cost of energy will continue to restrict purchases that have been affordable under highly speculative sub prime mortgage instruments," said Piazza.

The most likely alternative to ownership is rental stock, which appeals to transient business people and students who want to reside in a specific area.

"The rapid transition of home ownership to rental stock will result in upward pressure on the limited amount of rental space translating into higher rentals until equilibrium or economic conditions provide for an appropriate balance between home ownership and rental properties," said Piazza.

As far as rents go, he said that students should be prepared for stronger competition and higher rents this coming semester.

"I think the current state of the economy will affect students negatively," said sophomore Emily Gumbs. "So many students want to live off campus, and with it being so expensive, many cannot afford that."

If you have any further questions, feel free to contact realtor Nicole Etzold at (203) 256-3265.