The number of houses occupied by renters rose by 749,000 in the fourth quarter over the same period in 2011, according to the Commerce Department. Meanwhile, owner-occupied homes fell by 91,000 in the fourth quarter.

Demand for rental housing continues to grow, helping to boost rents and landlords’ returns. New households are being formed at a higher rate, but they are increasingly choosing to rent, rather than purchase a home. Lending criteria are still tight, and unemployment remains high—although jobs have been steadily increasing in recent months.

Some economists expect home prices to continue to fall until foreclosures slow, and available homes on the market start to decline. For now, would-be homeowners are not willing and able to take the plunge.

The vacancy rate for rental homes was 9.4% in the fourth quarter, which was the same as last year.

The founder of GTIS partners, Thomas Shapiro, says the his firm will spend up to $1 billion by 2016, because they see a “billion dollar opportunity to buy rental housing.”

This announcement follows that of a $1 billion investment by GI Partners and $450 million from Oaktree Capital Management, LP.

Federal Reserve Chairman Ben Bernanke recently said that increasing rentals may reduce lenders’ losses on foreclosed and underwater properties. He also indicated it could stop the continuous slide in home prices.

The Federal Housing Finance Agency will be offering some of its 180,000 properties to private investors as rental properties in the first quarter of this year. And the Federal Housing Administration will be involved in the project, as well.

The program will possibly include rent-to-own opportunities for tenants and private/public partnerships, where the government guarantees financing.

With average annual returns of 8.1% since 1990, it’s no surprise that private equity firms would be interested in the strong rental market. And often, renting a property will reduce losses more than reselling a foreclosed home in a down market.

According to reports, GTIS expects to hold the home it buys for about five years. They expect that by then, housing prices will recover and they can sell at a profit. The firm will hire staff in each area to manage their rental properties, starting in Nevada, Arizona, California and Florida—all states with high foreclosure rates.

The laws keep half the rents in the city artificially low. Many say they have also kept the supply and quality of rental housing low. James Harmon petitioned the U.S. Supreme Court to hear his case that the practice should be prohibited under the Constitution. Two lower courts refused.

Harmon’s case is based on a clause in the 5th Amendment to the U.S. Constitution, which prohibits the government from taking private property for public use without just compensation.

The Supreme Court has expressed an interest in the case, by asking New York State and the city of New York to respond to his argument. However, the Court has not yet announced whether it will hear the case.

The “glass-half-full” outlook:

+10.7% in the Northeast

+2.9% in the South

+8.3% in the Midwest

+2.6% in the West

• Milder-than-normal December weather may have helped home sales.

If low prices and mortgage rates and rising employment continue, the good news may just continue to roll.

• CoreLogic released its MarketPulse report yesterday, saying that there is “a lot to be positive about” for 2012.
• The National Association of Home Builders reported that builder confidence rose to 25 in January. This is up from 21 in December—and it’s the highest level since June 2007. The confidence measure is up four months in a row.
• First-time claims for unemployment dropped by 50,000 in the week ending January 14 to 352,000—the lowest level since April 2008. The figure was below the 384,000 average forecast of 41 economists in a Bloomberg News survey. December jobless claims were at their lowest level since 2008.
• Freddie Mac’s U.S. Economic and Housing Market Outlook survey reported year-over-year home sales this year are expected to rise from 2 – 5%.
• The Mortgage Banker’s Association issued a new report in which 80% of households said now is a good time to buy a home. Only 7.6% of respondents said that now is a good time to sell.

The bottom line is that we may be right at the bottom of the housing dip, and now could indeed be a great time to add to your real estate investment holdings.

The contents of this article are intended for general information purposes only, and should not be relied upon as a substitute for obtaining financial investment advice applicable to your situation.

Fees have increased by nearly 600% in one year, the landlords say, from about $11 per unit to $75 per unit. And the city won’t give clear answers about why the hike was necessary. So they filed a lawsuit to challenge the rate increase.

Records show 2010 revenue from the fees increased to $1.9 million, from $557,000 under the old structure. The cost of running the program, however, was budgeted at $1 million, and includes administrative expenses and fuel, parking and other vehicle expenses for 11 rental housing inspectors.

The Mayor of Allentown, Ed Pawowski, said the rental inspection program was making a big difference in the quality of housing. Landlords say they have no problem with inspections—just the huge fee increase. While the fee is due annually, landlords say the inspections don’t occur on a yearly basis. In some cases, units are inspected only every five to eight years.

The suit asks the court to declare the fee unconstitutional and to refund the past three years of fees to the plaintiffs.

Interestingly, a spokesperson said that high rental rates are to blame—or to thank, as the case may be—for the jump. Low prices and historically low mortgage rates were also helping consumers choose buying over renting, he indicated.

Lennar also reported:

• Net income of $30.3 million for the quarter, the company’s seventh straight quarterly profit.
• The average home’s sales rice rose to $243,000, up from $238,000 in the same period of 2010.
• The company’s backlog increased 35% to 2,171 homes.

Meanwhile, KB Homes, the country’s fifth-largest homebuilder, said their orders in December increased by 38%. Securities analysts were impressed with both companies’ performances, as they expected Lennar’s growth to top out at about 6%.

Other signs that the housing market is stabilizing:

• Pending home sales are at their highest level since April 2010.
• Homebuilder optimism has risen for three straight months.
• Housing prices could now be at or near the bottom, according to JPMorgan Chase CEO Jamie Dimon.
• Employment numbers are starting to increase, with an additional 200,000 jobs in December.

Homebuilders are an economic bellwether. While new homes represent only one-fifth of the market, each new home generates about $90,000 in taxes and creates an average of three jobs, according to the National Association of Home Builders.

And if homebuyers are starting to become active again, landlords should plan accordingly. Later in 2012, it may be time to maintain rents and offer good tenants incentives to renew leases.

By checking with some of the other victims of the tenant’s scams, under the name Global Academy Online, Inc. the landlords discovered he was very “savvy” and knew just what to do to “dodge the bullet.” In this particular case, the tenant filed court documents or neglected to appear in court in an attempt to prolong the eviction process.

In court, the tenant claimed that the landlords did not live up to their end of the lease, because all utilities—including Internet access—were to be provided, and on three occasions the Internet service was interrupted.

The judge ruled for the landlords, and signed an eviction order. The landlords say they are not “after the money,” and they just want the tenant out of their house.

There are a few lessons to learn from this case:

• If a tenant wants to rent your property under their corporate or business name, consider it a red flag. Not in every case, but do check it out.
• If you run proper tenant background checks and credit checks, it’s more likely you will find out about landlord-tenant disputes and court filings before you sign the lease. It’s not a stretch to assume there were no credit checks or inadequate checks run in this case.
• A quick Google search can reveal a great deal about a prospective tenant, as well. This particular company raises a few red flags.
• Finally, don’t roll over and let a scammer get away without paying what is owed. Fight for the money you have coming to you.

Of course, the answer depends on whom you ask. Economic experts are always making predictions. Based on indicators such as unemployment rates, factory productivity, retail merchant sales, construction spending, and of course, new residential sales and construction, they can predict what 2012 will bring in the housing market.

According to several economists, the market should begin to pick up in 2012, especially if jobs start growing again. Europe’s debt problems are an unknown, and could even tip the economy back into a recession, according to an economist with IHS Global Insight. Otherwise, the economy should grow at a rate of about 1.6%.

Prices should continue to decrease through 2012, as foreclosures begin to ramp up and distressed properties flood the market. Lower prices hurt sellers, but homebuyers could likely benefit from low-priced properties through the end of 2012.

Another economist, from the National Association of Home Builders, predicts that home construction will not return to “normal” levels until 2015, due to widespread job uncertainty. In 2012, builders are expected to to construct only about 40% of the units needed to keep up with population growth. By 2013, that rate should increase to about 60% of normal. The U.S. population grows by about 3 million a year, so the housing market needs about 1.5 million new homes per year. But builders won’t ramp up to that level until mid-2013, o4 2014, according to the IHS Global Insight economist.

Multifamily construction, however, is on the rise, in response to a high demand for rental housing. Millions of Americans abandoned homeownership and turned to renting, as the homeownership rate dropped from 2004’s 69.2% to 66.3% in the third quarter of 2011.

Did we hit bottom? Probably. Economists are saying that while the housing market should begin to see some activity in 2012, a significant rebound is not likely this year.

In California, smoking anywhere—indoors or out—is becoming harder to accomplish. Restaurants, bars, bowling alleys, stores and most other public buildings are smoke free. Some municipalities extend smoking bans to city streets, parks, bus stops, commercially zoned sidewalks, common areas in shopping centers and outdoor dining areas; other cities include private homes that are licensed as family day care facilities.

Now, the entire state is covered by the new law, which was signed by Governor Jerry Brown on September 6, 2011 and hailed by landlords who choose to restrict smoking. The law leaves no question about whether or not they can legally do so, and includes inside units, parking lots, balconies and other common areas. Landlords are required to list in leases and rental agreements where smoking is prohibited.

Multifamily residences account for more than 30% of California housing. 88% of the state’s residents do not smoke, according to data announced by the State Department of Public Health last July. Alex Padilla, who wrote the bill, said “Living in multifamily housing should not compromise the health of renters or their children.”