I always value your opinion and am glad you are watching this post.
So, if rentals go down and fall to more historical levels will this further depress the housing market? Will decreasing rents make it even more attractive to rent vs. buy in the short term, causing housing to overshoot?
According to government HUD data a 2 bed fair market value in Orange County is $1595 for 2008. A quick poll of my personal friends verifies that this is pretty average for inland North Orange County. So, while you mention that there are some San Diego areas where a 2 bedroom can be had for $1000, I don’t think that’s the case in Orange County.
I am young(very young for this board) and my next home purchase will be my first. I don’t want to ruffle any landlord’s feathers here, I just want to know if rents detached from reality just like homes did. A 30% increase over inflation in the last 7-8 years seems to indicate that is did, unless it was under-priced in 2000.
If rents do go down, will housing go down even further in response?
