True, rents do not lend themselves to bubbbles very well – they are usually the side effect to a major bubble.
For example, the Japanese buying splurge of the 80’s caused rents to go up in certain places (California, Hawaii and Guam). After the Japanese financial crash, rents went down to normal.
The Internet bubble caused Bay area rents to go up. After the crash, asking rents were lowered.
I’ve been seeing some talk of a rent bubble in New Orleans, simply because of the destruction of affordable housing.
Anyways, unless there is some sort of bubble in Orange County causing rents to go up as a side effect, I would say it’s simply demand for more affordable units due to the increase in foreclosures. From what I’ve been seeing, the economy in Orange County is not excessively down, it is more or less on track with the national. With people fleeing home ownership and unwilling to flee the area in combination with the low amount of rental housing, they have no choice but to ante up for higher rents.
Besides, rents going 10% or even 15% out of whack is not considered a “bubble”.
I mean, heck, you might as well attribute the rise in rents to the Lakers being deep in the playoffs this year.
