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Jeffrey Friedman, Associated Estates Realty Corp. chairman, president and CEO, on why now is the right time to rent, not buy.
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Your pockets while -- a long time well the Obama administration announced a harp program this week in an effort to help Americans stay in their homes.
But my next guest says with mounting economic concerns people are more inclined to rent more -- so than ever before.
Joining us is Jeffrey Friedman chairman CEO president of the associated estates realty corporation.
Geoffrey great to have you line year companies becoming up focal point getting a lot more attention of investors of analyst.
You're growing in market cap your expanding into it into different regions you're becoming one of the big boys.
What are the trends that -- making money off in a rental world right now.
Hi Shibani Charles nice to be with you today.
And -- day the markets up 350 is a great day and household formation is the number one driver of apartment demand.
What's -- -- is is that young households entering the market today.
The 21 to 34 year old cohort.
According to the US Census Bureau between 800001.
Point two million.
New households are being created.
These new households.
Who in the past may have thought about the dream of owning a home.
No longer have at the forefront of their mind buying a home.
And so it is that group of new households that have become.
Our prime customer and one of the reasons that occupancy has been so strong throughout the United States.
But Jeffrey let me interject here I mean we have a White House administration -- -- public policy more broadly that supports homeownership that wants to get homeownership back on track.
So what is this direction do you for the direction of your own business which is clearly benefiting from renting being more popular.
Shibani anything that's good for the economy is good for our business so to the extent that the proposal to assist people who are having trouble making their mortgage payments.
Is good for the overall economy that's good.
But it doesn't really change what young households are thinking in terms of how they're going to invest.
The available dollars that they have in terms of where they live.
At associated the states the average rent is 975.
Dollars a month.
The average age of one of our residents is 36 years old and the average household income is 65000.
Dollars a year.
We're 95%.
Occupied although many of our residents may dream of owning a home.
It's not at the forefront.
Of their minds today.
And so they have chosen to be read occurs by choice as opposed to renters by necessity even if they can afford to buy a home.
-- Jeffrey just use the word.
Invest a moment ago certainly.
I never really consider someone renting.
Renting as an investment and I'm sure this and that's the fantastic time -- -- providing a fantastic service.
You've talked a little bit about the economy but.
What are you fill in in the sense that people young people.
36 and on their.
Giving up on the American dream is there's something about that that bothers you that could be detrimental to this country down -- wrote.
Charles I I I don't believe for a moment that young people today have given up.
I just think that their priorities have changed a bit.
So today I think it's more important to young families to put a few dollars away and have the flexibility.
Of relocating for a job or relocating for a family and as a result there obligations under their leases to those of us in the apartment business.
Are about one year so they don't have.
That anchor so to speak of owning a home and then have to deal with what's happening in the markets where they may choose to buy.
As being a drag on their ability to be flexible.
So routine.
Actually adds a great deal of flexibility.
To the households that choose to rent.
Jeffrey Friedman thank you very much for joining us today chairman and CEO of the associated estates realty corporation.
We breaking news now oil closing up three dollars and 76 cents at 93 dollars.
And 93 dollars and 96 cents cents a gain of more than 4% almost a 4% gain on equities are -- rallies all across the board.
Absolutely we are Shibani you know what I think the market's focus although the news is all about Europe.
For me I think this is all about America clawed its way back and I'm calling us and I have been calling for a few weeks that a dirty fingernails rally began -- companies like -- hand.
Advantage Caterpillar last week -- of courses of in a big time -- odd company last night.
In fact there's no better example of the dirty fingernails and Norfolk Southern -- that calls itself the thoroughbred in last night well that quarter.
