I agree with the part about the effects of outmigration and doubling up to the extent that occurs, but I disagree that rising inventory will force those units into the rental market. I think the gap between market rents and market prices is so high that the average investor wouldn’t be able to carry the nagative cash flow even if they wanted to.
Some of the high-rise developers or their successors will probably be able to carry the condos, but the SFR developers can’t possibly do it nor can most of the investors. Even a homeowner looking to downsize wouldn’t be able to justify renting out their house and moving into an apartment because of the negative cash flow on the house – they’re better off trying to make-do.
One way or another these alternatives will seek equilibrium. Either the rents will increase and/or the prices will decline until that gap reduces to something within reason. I think that unsold listings will either be retained as principle residences, be discounted until they do sell, or else they’ll go into foreclosure. I don’t think renting them out is a viable option for most would-be sellers.
