Hit hard by foreclosures, Prince George’s County has become the site of the latest residential land rush in the Maryland-D.C. area. 2012 saw the median home value in the county up from the previous year, turning around a five-year downward trend, and cash sales have risen dramatically. And that means that more investors are snatching up houses to flip.
The economic irony, as explained in the Washington Post, goes like this. The collapse of the housing market meant those who would otherwise be homeowners were now renting, which drove rents up as home values continued to fall. High rents and low buying costs is the kind of temporary market condition that inspires one to become a landlord.
So we’ve got a flood of people buying foreclosures and vacants in Prince George’s County to flip and then rent until the market rebounds enough to make it profitable to sell. Which is all well and good, except that “absentee landlords who lack a strong connection to a community have been known to create problems every bit as serious as empty properties in foreclosure,” stated as fact in the Washington Post article without citing any data. But I’m inclined to agree. As absurd as this might sound, house-renting should be a vocation. To be a positive force in the neighborhood and larger community, a landlord needs to do more than the legal bare minimum to maintain his property. And that requires an uncommon altruism — very uncommon in my experience.
So, though this kind of land rush stands to bring property values back up to where fewer homeowners are underwater, I pity the renters who will have investors for landlords.