“A growing number of people who can afford to buy trophy homes are, instead, opting for a more temporary solution: the trophy rental,” write Candace Jackson and Lauren Schuker Blum. Luxury renters are opting to invest in other markets and ventures, rather than “tying up their money in steep down payments” they add. Families and singles alike are opting to rent instead of buy and are even willing to make substantial investments in perfecting their interim abodes.
The outcome of this shift? High-end rentals in coastal gateway markets in states such as New York, California and Florida have seen an uptick in prices, mirroring a larger national trend. Apartments in luxury towers, penthouses, condos and million dollar homes in prime locations within cities such as Los Angeles, Miami and San Francisco can cost anywhere from $10,000 to $90,000 a month to rent. And, "[t]he relatively low inventory and high demand means unsolicited rental offers on for-sale properties have become commonplace," explain Jackson and Blum.
“The rise of the trophy rental comes as many Americans continue to abandon ownership in the wake of the country's housing crisis and credit crunch,” add the authors. “The U.S. homeownership rate was 65.3% in the third quarter of 2012, its lowest level since 1996, according to the Census Bureau. In the midst of the housing boom, in 2004, the homeownership rate reached 69.4%.”