To add to HLS’ comments, the rent multiplier would be even lower in Downtown San Diego where HOA is $500/month (or areas with mello roos).

I know someone who is renting a studio downtown that has carrying costs of $800/mo (HOA + property taxes only). The rent is $1,300. That leaves the condo owner only $500 to make the mortgage payment on $280,000. Interest only on that amount is $1400/mo. So the montly loss is $900/mo, not including vacancy.

My example is only a studio. Think of the more expensive properties. The losses are staggering and owners will have no choice but to give up unless the market recovers as they are praying for in 2008. Fat chance that will happen!!