CLARKONOMICS: New foreclosure data shows that the 4 states with the worst situations are Nevada (where 1 in every 54 homes is a foreclosure), California, Arizona and Florida. Rounding out that list is Colorado, Georgia, Michigan, Ohio, Massachusetts and Connecticut. Meanwhile, the nation is facing a record high number of vacancies with 3 out of every 100 houses going empty. Unfortunately, REO properties (real-estate owned) are notoriously unkempt and invite crime of all kinds.

In related news, Dow Jones recently reported that the Miami/Ft. Lauderdale area has 3 years of backlog inventory to burn through. That's if another house never went on the market again! Only 3 markets are doing well by any standards. Seattle, Houston and Dallas each only have a 6-month supply of housing for sale.

So here's the good news: This is a great time for buyers (especially first-time homebuyers) and renters. Affordability is coming back to the market after going AWOL for years.

About 10% of rentals are vacant, which means that you can steal a deal as a renter. Try to shop around about 4 months before the end of your current lease. The greatest hazard and opportunity alike is in renting from an involuntary landlord who can't sell. They usually just need the money and don't know much about maintaining a property. But you'll get cheaper rent than in a traditional rental complex. The danger comes if they stop paying the mortgage and go into foreclosure. Then you'll be out on the street too.

California has a ballot initiative that will allow voters to decide whether or not to continue rent control. Rent control is, according to Clark, an enemy of people finding affordable, decent housing and of capitalism itself. When Clark was in college during the early '70s, he paid $249/month for a rent-controlled apartment. Despite rising inflation, his rent only reset from $249 to $257 at that time. Being 19 years old, Clark loved it and thought he hit the jackpot. But if something broke in the apartment, nothing ever got fixed because the owner didn't have enough money. When you interfere with the free market by dictating rents, owners have no incentive to invest or otherwise fix the property up. As a young person, Clark didn't understand the cause-and-effect relationship between rent control and poor living conditions. But now he does. New York is a case study in the drawbacks of rent control. Whenever you try to fix the price -- even though you think you're doing something nice for people -- you're really just asking for trouble.

Renters are about to enjoy the benefits of more competition for their cable business. The FCC plans to announce that landlords can no longer rip-off tenants by dictating which TV/cable/Internet providers they can use. Landlords previously could receive huge kickbacks from little private cable companies by signing exclusive deals for their buildings. When it comes to cable service, we don't have a lot of choice in this arena to begin with thanks to monopolies. The FCC's upcoming move will afford renters a little more wiggle room. Very rarely has a landlord dictating who you can go with for cable been a positive thing. In one unusual case, Clark's executive producer Christa once lived in an apartment where the management company offered her cable service at below-market price. Right now there's no telling how soon renters will feel the benefit of the upcoming FCC decision. On a related note, renters already have the right to go the satellite route. Under the Satellite Home Viewers Act, you can get satellite if you have a clear shot of the southern sky.

The troubles in the mortgage market are having an unexpected side-effect on renters. It all starts when people who own homes and condos that they can't sell become involuntary landlords. Those folks rent out their places while waiting for the market to recover so they can sell down the road for a profit. But what happens when an investor who buys multiple properties on spec gets into this situation? Even if those investors have tenants in their properties, they usually can't recoup all their costs when multiple mortgages come due every month. So they sometimes stop paying the mortgage on one of their properties while continuing to make payments on their others. You're going to find an eviction notice on your door if you're unlucky enough to rent at a property that's facing foreclosure. Tenants in this situation have fewer rights than if they didn't pay their rent for months.

Clark was in this situation at age 22 when he rented a condo with an option to purchase from a divorcing couple. One day he came home after playing tennis and found a notice on his door ordering him to vacate in just seven days. His landlords were taking his rent every month and not paying their mortgage. So Clark called the mortgage company's lawyer and asked for more time than seven days to vacate. He was denied extra time, but wound up working out a deal to purchase the townhouse for $36,000 with a five percent down-payment. He also got great loan terms because the bank didn't want to deal with a foreclosure. His mortgage payment actually wound up being lower than what he'd paid in rent! So out of adversity there can be opportunity. Clark still owns this property, which has been long since paid off. He's been renting it out for 25 years and it's been a cash cow for him.

It's a great time to vacation at the beach -- not just because it's summertime, but because it's really a renter's market right now. Many owners are stuck with second homes on the water they can't use. So they're trying to rent them in the summer market at deep discounts. The Boston Globe recently reported that Cape Cod is now a great renter's market. For years the Cape has been a notoriously hard place to find a decently priced rental. But now due to the lack of people willing to rent, owners are offering their places at discounts of up to 20 percent. Just be aware if you're going to do a summer rental up north that the beach season there is shorter than it is elsewhere.

So what's the best way to take advantage of this soft market for rentals? Clark recommends a website called Vacation Rentals by Owner. As the name suggests, it helps you rent directly from owners -- whether it's a home, condo, cabin, villa or apartment! For extra value, be sure to look at "fill in the gap" deals where you rent accommodations that are available in between other renters. But be wary of pictures supplied by the owner. Photography can cover up a lot of sins, as Clark says. He recalls when he was in the travel business and someone showed him a brochure with a picture of a hotel next to a picture of a beach that was nowhere near the hotel! Meanwhile, if you're renting an older property, look to see that it's been renovated within the last three years. And don't be shy about asking for more pictures from the owner. What you get initially may be misleading, so watch out!

The rental market is not going where people thought it was going. Owners of apartment complexes thought they’d be sitting pretty, with apartment construction slowing down and conversions to condominiums. But vacancies are actually rising, and landlords have found that incentives may be needed again. Why? According to the National Association of Realtors, the inventory of condominiums is up 38 percent in one year. That’s how many condos people are trying to sell and can’t. People who own condos are stuck in a tough bind right now. So, many condominium owners have become reluctant landlords. Some of these are converted apartments, while others are brand new high-rise type condos. So, if you’re a renter, you should consider renting a condo. Just remember that the landlord probably didn’t want to become a landlord. And reluctant landlords don’t care about the property. They also may have trouble paying the mortgage, so you could be evicted in a hurry if that happens. But you can make lemonade out of these lemons. Maybe suggest that you’ll keep the home in great shape and pay for maintenance issues if you get a cut in rent. Work it to your advantage.

About a third of people rent instead of own these days because renting has been a great deal lately in a lot of cities. Interest rates have gone up so much in the past year that people have decided to keep renting or start renting for a change. As a result, rents are going up between 10 to 30 percent. The Wall Street Journal evaluated 69 markets in the country, and 60 of them are experiencing rising rents. So, if you’re renting, your landlord could boost your rent. If you shop the market and are willing to leave for good, you still have a lot of power. Use the leverage of what other more vacant properties are offering and your landlord may not raise your rent. But you have to be willing to walk. Then, if a landlord isn’t willing to match a deal you’ve found, you can leave. The best deals going right now are from speculators who bought condos or homes solely to “flip” them. They haven’t been able to do that, so these “involuntary landlords” are not getting any money and are probably willing to make a deal. That kind of landlord won’t be the most responsive, but that’s something you may have to deal with to get the good deal on rent. So, check out speculative condos for the best deal!

Clark has defended Wal-Mart for years, despite the fact that the company continues to enrage people. He’s always believed that by making things more affordable for everyone, Wal-Mart has kept inflation from increasing more and has helped the economy. But Clark is not very happy with Wal-Mart today. The company wants to build a new distribution center in Florida, according to the Orlando Sentinel. That wouldn’t be such a bad thing, but the company is trying to get families to sell off their land so the state can build roads leading to the center. The Sentinel reports that Wal-Mart has been out threatening people to sell their land for the money they are offering or suffer the consequences. If people refuse, Wal-Mart plans to use its government power to make move them anyway and give them a tiny fraction of what they would have gotten. If the story is true, there is no reason for one of the largest companies to behave like a bully. Clark is appalled at this and hopes Wal-Mart realizes it is in the wrong.

The run up in real estate has been a very hit or miss kind of thing. Values on both coasts, parts of Florida and a couple other places have gone up much faster than people’s incomes. So, it’s hard to know whether to buy or sell if you’re moving. Clark has some good news for you on that front. If you’re moving to an area that has “bubbleized,” the New York Times has found that renting could cost you about half the cost of owning. A typical dwelling in San Francisco, for example, costs $5,000 a month to own. The same home would cost $2,500 a month to rent. The same is true in Boston, LA, New York and Miami. In the Mid-West, however, the cost of renting costs more than the total package of a mortgage, taxes and insurance. Dallas and Atlanta are also good places to own. So, if you’re going to be in a home for 10 years or more, go ahead and buy, no matter where it is. If it’s less than that in a bubble market, you’re better off renting.

People have been able to get really good deals on apartments over the past few years. But that is about to change. In the past six months, the market has shifted from the tenant having the advantage to the landlord having the advantage. The vacancy rate in apartments is 6 percent, which means 94 percent of apartments are filled right now. That rate is slowly going to decrease, though. One in three condominiums is being rented out, as well. You might not think of renting a condo, but you could find a great deal. There are advantages and disadvantages to doing this. You have no maintenance company, for example. So, getting things fixed will take longer. But there is a sense of community in a condominium complex because it is mostly owner occupied and people there care about their community. So, when one door opens another closes.

Clark often gets questions from people about whether to rent or buy a home. His answer is usually pretty linear: You should only buy if you’re going to stay in a home for five or more years. But there is a clear exception to the rule going on right now according to the Wall Street Journal. In many areas of the country, there it’s an even better idea to rent rather than buy. The reasons for this include the fact that prices in certain markets have risen significantly in recent years and because “speculators” are buying homes and renting them out. So, there is an oversupply of affordable rentals in many areas of the country while home prices in these areas have gone up. The major markets where this is true include Boston, Charlotte, Chicago, Denver, Las Vegas, Los Angeles, Miami, Minneapolis, New York, Orlando, San Diego, Phoenix, Seattle, San Francisco, Tampa and Washington D.C. In San Diego, for example, it will cost you 40 cents to rent for every $1 it costs you to buy. That means if you pay $1,000 a month for a mortgage, it will cost you only $400 to rent. On the other side of the spectrum, buying sometimes makes much more sense. They are few and far between, but they exist. Indianapolis, Dallas and Atlanta are areas where it would make more sense to own rather than rent. The cost to rent in these areas is roughly equivalent to the cost of owning. You should still abide by Clark’s rule even if you are moving to an area where it’s smart to buy, and that is to rent for about six months before you buy. That way you can weigh in traffic, schools, and other factors.

How would you like to spend less on your rent? Apartment vacancies have remained high over the past few years. In part, that’s because many people bought homes or condos when mortgage rates dropped so low several years ago. That soaked up part of the rental market and demand for apartments. The latest data shows that landlords are having just as much trouble renting places as they did a year ago. So, it’s clearly a renter’s market. If your lease is about to end and you’re planning to get a better deal somewhere, make sure you know how far in advance you have to notify the landlord that you are vacating. And do it in writing. Use that time before your lease is up to go out and shop the competition. Ask your friends what they’re paying and where they live. The key to getting a good deal on a rental is to be ready to walk. Get offers from several places and, if the landlord doesn’t budge, walk out. You have the power to decide, within reason, what you pay for rent. These deals will eventually end because the supply will dwindle and contractors won’t keep building the apartment complexes that they have been. Not to mention the fact that mortgage rates will likely rise and more people will go back to renting. So, get a deal now and think about signing a two-year lease. You may get a much better deal.

We’ve been through a period of terrible dishonesty and amoral behavior among banks, brokerage houses and other financial institutions. It has caused a lot of distrust and frustration among the American people, who now seem to distrust corporate America in general. Apparently, it’s continuing. The nation’s largest apartment company owner, Equity Residential Properties, is the target of a huge lawsuit in Florida for duping tenants out of rent money they didn’t know. The company owns apartment complexes in 33 states and it has just lost a case for improperly collecting money from former tenants. Let’s say a tenant had to terminate a lease early for some reason. The company would tell the tenant that he or she would be responsible for the remainder of the lease until and unless someone else moved into the apartment. But Executive Residential and several management companies were holding people liable for rent on an apartment that had been re-rented. So, essentially, the company was collecting “double rent” on apartments, which is against the law. Even worse, the company didn’t tell former tenants that they owed the money. So, when that person goes to buy a home, there are unpaid debts on that person’s credit report. So, the apartment complex was using that fact to force former tenants to pay money they don’t owe. Apparently, this is just the tip of the iceberg in the apartment industry. So, what can you do? Make sure you go by the apartment or home to see if it’s been rented, or ask your friends to watch out. Then, take a picture of the place – with people or furniture inside – to show it’s been re-rented. If possible, an automatic date will be imprinted on the picture as proof.

Many people have bought vacation homes in the past few years and – even with increase in travel and improvement in the economy – renters are getting fantastic deals. When you buy a place at the beach or the mountains, real estate agents always talk about “rental income potential.” People who buy want to think of these homes or condos as an investment. They want to rent out their place often and possibly make money on these places. Revenue projections say you will make a decent amount. But right now supply and demand are completely out of whack. It’s the fourth year in a row that renting is sluggish at resort properties. Prices are down about 20 percent when renting a home or condo at the beach or in the mountains. So, you can get great deals if you look around.

Clark gets calls from landlords who are having terrible problems with tenants who don’t pay rent or trash the properties. He often sends them to landlord.com. But now there is something even more helpful for landlords and possibly hurtful for tenants. There is now a database listing questionable tenants called the “Tenant Black List.” Landlords can search the database for your name and refuse to rent you an apartment because you are on it. But there are potential red flags with this system. The UD registry, as it’s officially called, has had some mistakes. A name can appear on the list by mistake or out of spite by a former landlord, and that person may be completely in the clear. There is also no appeals process, which bothers Clark. So, some states are fighting back. Minnesota has implemented a law saying you can have your record purged from this list if it’s found that you were not at fault. Computer technology has become so affordable and sophisticated that data mining companies are able to develop customized reports for various industries. So, take action if you are blacklisted.

Clark has talked in the past about the opportunity available to the one in three people who rent homes today. The opportunity now is the best it’s been in decades. New data from the Census Bureau shows that the vacancy rate in apartments is the highest it’s been since the bureau started collecting the information five decades ago. It’s not true of all areas of the country. But, in many, you can be shopping the marketplace and finding a great deal. You also need to remember that many leases have “automatic renewal” clauses. So, if you don’t give enough notice, you could be stuck in the same place. Tell your landlord that you’re giving notice because there are great deals. Make a list of the offers you get and then go back to your landlord and negotiate. Some landlords are giving DVD players, televisions and some are giving free rent. There are drawings and contests all the time for a year of free rent. That’s fantastic. Rents are also down in many places as much as 25 percent. So, get out there and work a deal. It's a win-win for everyone because landlords don't want empty properties.