Jeff Rossi is only 25, but when he was leaving his parents’ home recently, he contemplated buying.
“My mother is a Realtor and she fought me on renting,” he said. “She told me to get an investment. I’m very hands-on, but I don’t have time and patience to do it now.”
Rossi is a renter at Harrison Station, a 275-unit building in Harrison.
He loves the pool, amenities room, business center and retail offerings. Although those choices are available in the condo market, Rossi said he likes the flexibility of rentals.
“The other great thing is that with a lot of new buildings, there are incentives to move in, you get two free months here, two free months there,” he said. “I’m a single guy, I can move around a lot. You can get a great deal.”
Rossi is one of legions of renters in North Jersey who are in no hurry to buy. Some are waiting for economic stability or for the market to settle. Many also just enjoy the renter’s lifestyle.
The rise of the renter can be seen in how home-ownership rates have dropped in recent years. In 2005 and 2006 in New Jersey, between 69 and 70 percent of people owned their own home, according to census data. In the third quarter of 2011, that number dipped to 65 percent.
Marnie Raimondo is well aware that this is an excellent time to buy a home.
She knows interest rates and prices are at record lows, and her sister — her younger sister, she points out with a laugh — has been looking at homes for months.
“She’s always telling me, ‘You should really be out there looking,’ ” said Raimondo, who has a one-bedroom apartment at 140 Mayhill, a luxury rental building in Saddle Brook.
“I do make a good living and, technically speaking, I could afford it, but I don’t feel like I have enough to put down on a house and still have money in my back pocket in the event that something happens.”
“I like renting,” Raimondo said. “It’s easy, it’s convenient. I don’t have any maintenance to worry about. They take care of everything for me. There’s a parking garage, and when it snows my car is covered. There’s no shoveling.”
Raimondo said her rent is similar to a mortgage, but she knows there are hidden costs associated with homeownership.
“If anything goes wrong, you have to foot the bill, you can’t just call the super,” she said.
Another sign of renting’s popularity is how vacancy rates are low — about 3.7 percent in Bergen County for the third quarter of 2011, according to the real estate investment-services firm Marcus & Millichap.
Those numbers are a far cry from the U.S. average, which was 9.8 percent in third quarter of 2011, but lower than the first quarter of 2010 when Bergen County’s vacancy rate hit 5.7 percent.
The recent low vacancy rates are similar to what they were in 2005 when the economy was stronger, said Michael Fasano, Marcus & Millichap vice president and regional manager.
‘A better lifestyle’
“The vacancy rates were low in 2005 because the stronger economy was driving companies to hire people out of college who needed to rent apartments,” Fasano said. “Today what’s driving it is that people now see apartment renting as part of a better lifestyle.”
Low vacancy rates mean that rents also are on the rise. In Bergen County, effective monthly rent in 2005 was $1,348. In 2011 it nudged up to $1,484, according to Fasano.
Another way to gauge the popularity of renting is to look at the buildings. The developer BNE Real Estate Group recently switched two projects from condo to rental to respond to marketplace demands.
The first originally was conceived as an active-adult condo development, then switched to a free-market for-sale product. Last month, they broke ground on a 194-unit rental project in Fort Lee called Twenty50 that should be done by September 2013. The second project, in Jersey City, also was originally slated to be condos; it’s now planned as a 139-unit rental development.
“In general what we’re really seeing is a lot of people are renting by choice now,” said Jonathan Schwartz, senior vice president for BNE. “It’s about greater mobility and flexibility and not having to worry about maintaining a home, and still living within 10 minutes of Manhattan.”
Sally Robertson and her husband, Oscar Burgos, would seem to be prime candidates for home ownership, thanks to their three children. But Robertson said they have no plans to move from their Hoboken duplex at The Shipyard, where they have lived for nine years.
“For us, it’s about lifestyle,” said Robertson, whose family loves the building’s pool, the proximity to New York City and the conveniences of rental living.
“We don’t spend any of our free time doing maintenance or mowing lawns or fixing things,” said Robertson, who is originally from London; her husband is from Colombia. “Any free time we have we spend enjoying where we live, not maintaining it.”
In the early years at the Shipyard, Robertson watched many of their friends buy homes in the suburbs. Recently, they’ve seen more staying, and some people who left have returned.
“I think in all honesty, if we did buy a place it would be in Europe or somewhere else, a place that we would live part of the year,” she said.
Robertson said her family can’t believe how much they spend on rent, knowing that none of it is building equity.
“If you stop at the end of the year and think about how much money you’ve paid in rent, that can be a little shocking,” she said. But she always comes back to the luxury features of the Shipyard — the waterfront park, the health club, the on-site retail shopping.
“Honestly, we could not afford to live in such a beautiful place if we bought,” she said.
Luxury rentals are a major driving force, said Jacqueline Urgo, president of The Marketing Directors, which does in-house sales and marketing for both condo and rental projects. In the three decades Urgo has been with the company, she has seen major changes.
“Let’s say that in 1995, if you had a lounge in a rental building, it was considered an unbelievable luxury,” she said. “Now you have buildings with a doorman, a spa, an upscale lounge, a state-of-the-art fitness center. You have an amenities package similar to a luxury condo.”
In those early days, rental buildings never trumpeted in-unit features such as finishes and appliances. Urgo said one of their newest projects, a 108-unit rental building in Elmwood Park built by Riverfront Residential, will have granite countertops and artistically designed tiling.
“The materials will be incredible,” she said.
Urgo said she’s seeing luxury rentals go quickly. At Harrison Station, about 50 percent of the homes have been rented after only three months on the market. Urgo compares that to a project she recalled in the 1990s that took 16 months to rent out.
Real estate agents say their rental clients are rising. Scott Selleck, broker sales associate for Re/Max Villa Realtors in Edgewater, said his rental clientele has increased by 50 percent in the past six months.
“There is a mindset that people would rather rent and keep their payments reasonable, and not get caught with the market dipping again,” Selleck said.