One was a Hollywood Hills threebedroom listed for sale at $1.7 million or for lease at $12,000.
“They got a lease offer before an offer on a sale,” said Rich, who has 30 years of real estate experience.
Adding to the supply of lease houses are absentee owners and investors who haven’t been able to sell and decide to take their forsale homes off the market, put them up for lease and “sit out for
six months or a year” or more, Rich said. “They don’t want the perception that the property is getting stale or old.”
Other houses for lease are owned by people who purchased at the height of the market. The owners are keeping their homes and renting them out to cut costs.
“I know of several cases where people moved into other arrangements that cost them less,” UCLA’s Habibi said.
Downsizing is the reason that restaurant owner Benny Borsakian gives for leasing out his primary residence.
He recently signed up a twoyear tenant for his 4,400-squarefoot home in Encino with the help of Rodeo Realty agent Carol Wolfe, who also represented the renter. His family grown, Borsakian no longer needs a house of that size.
“It’s just me, my wife and a housekeeper,” he said.
Borsakian, whose house is nearly paid off, plans to re-evaluate the situation when the lease is up.
Although she doesn’t agree with the thinking, Wolfe is seeing more potential sellers choose to be
landlords rather than sell now. “They are going to hold on to the property longer and sell when the market is better,” she said.
It’s a sentiment also being expressed on the part of tenants unsure that the housing market has hit bottom. Luc Vanhal, who is renting Borsakian’s home, looked at four or five other places before settling on the Encino house.
The first-time leaser needed a place close to his children’s schools but didn’t want to buy another house. “Why make a huge commitment to something that’s clearly not worth it right now?”
said Vanhal, president of a direct marketing company.
In Orange County, Jay Gordon of OCHouseRentals.com recently leased out a house on Newport Beach’s Lido Isle, where homes can cost from $3 million to $25 million, for $9,500 a month. “You’d spend twice that to live in the same exact area” if you bought, said Gordon, chief executive of the Laguna Beach company.
“Renters are not worrying about losing money,” he said. “Leasing takes the guesswork out of where the market is going.”