PHOENIX — We’ve heard of a bidding war when it comes to homes for sale, but bidding on homes for rent?? That’s what it’s come down to in Arizona with a hot housing and rental market, with not enough inventory to keep up with the current demand.
Natasha Smith encountered a real estate company that asked potential renters to submit their “best and highest offer” of what they could pay for the monthly rent. She bid about $2,100 which is $700 more than she is currently paying but still lost out to a higher bidder.
Smith has been struggling to find an affordable rental for almost three months now. She has lived in her current rental home for about seven years.
It is the home where she raised her children and said goodbye to her late husband. Earlier this year, Smith’s landlord came to her with tears in his eyes, to let her know that he had decided to sell the home.
“I can’t blame them. It’s definitely the time to sell, for them. So, I was advised that I would need to be moved out so they could sell the home,” said Smith.
For almost three months now Natasha had been searching for a home in Gilbert that fits the specs of the home she was leaving. She is currently paying about $1,400 for a three-bedroom, 2,000 square feet house. Most houses that fit that description that Smith was finding online were in the $2,000 and higher, and they were getting rented out fast.
“It’s been extremely hard trying to find a house that even fits your needs, let alone your budget,” said Smith.
Even with that, Smith said she was extremely surprised to see an email from one real estate company asking her to submit her best offer, and bid on a home she wanted, for rent. She posted about it on social media.
Realtor Jennifer Kovach saw the post and reached out to Smith to help her find a home.
“When I saw Natasha’s email saying that they were wanting her to kind of do a highest and best like we do in the resale market, it was quite shocking,” said Kovach.
She had known Smith from a previous job and did not want to see a friend end up on the streets, unable to find the right home, so she has offered her services and expertise to Smith.
ABC15 reached out to 4:10 Real Estate and Property management, the company behind the email asking potential renters to bid on a home. Owner Jason Geroux tells ABC15 his company had no plans to put the property up for bids, until multiple tenants reached out to them, offering more than the price listed, for rent.
“I don’t remember this particular property, so I’m going to use easy numbers, but it is advertised for $2,000 a month. I’ll give you $2,200 if you can consider my application higher than others,” explained Geroux. Upon speaking with the homeowner, they decided to see how high people would be willing to go in their bid, to live in that home.
Geroux said they planned to use a similar strategy for other hot rental properties in the future, at the request of property owners. He described the rental market as being as hot as the housing market right now.
“In fact, even more so. There is actually only one rental for about every five sales that happen, so rental inventory is extremely low,” said Geroux.
The reason behind this was simply, demand. Senior housing industry analyst Tina Tamboer, with The Cromford Report said it was because of the surge of people moving into Arizona, and they were people willing and able to pay the higher rental prices. The Cromford Report is an insider publication for realtors, showing them current housing resale trends and market analysis.
“The industries that have been attracted to greater Phoenix tend to be industries that have higher incomes,” said Tamboer. “They may not like what they can get for $2,500 a month, but they can afford it,” she added.
For renters like Smith, it has made finding an affordable home difficult. “It’s just frustrating you know when you wait four-five days and hear back that you didn’t get it,” said Smith.
Realtors say the average price of a rental in Maricopa County was about $1,950 right now. That is about $1,000 higher than the average cost of a typical home mortgage.