You aren’t going to see rents drop equivalent to Kansas City or Tulsa, or Spokane.
“Everyone wants to live here” remember ???

The affordable market rents in an area will determine the “value” of a house to a prudent investor, using a multiple of 100x-125x monthly gross rent.

The $2000 mo. rent makes that house worth $200K-$250K, it’s not worth $450K today because the value was $600K in 2005.

The biggest mistake that people are making today is using the bubble price as a measure. (Because it was $600k then, $450 must be a bargain)

Many investors aren’t “prudent” The stock market is a perfect example, except people find out that they are screwed much faster in the stock market.

I don’t care what 2000 prices were or what 2005 prices were. The “value” of a house today to an investor is based on rents today and upon the return that can be generated on the investment, also factoring in the loss of opportunity value on any down payment.

75% of landlords probably don’t know what a CAP rate is, yet call themselves “RE investors”

People bought stocks all the way down after the dot com bubble, thinking that they were cheap based on the peak prices. It didn’t work then and it won’t work now.

Many people are simply being ruled by fear or greed, without understanding how markets work.

I still predict that many properties will be short sales OR foreclosed on twice in the period from 2006-2011.