It’s true that my last post included the “30% – 40%” figure, but in all fairness I did express the (personal) opinion that I was thinking more along the lines of 10% or so.
As far as rental houses being a substitute for rental apartments I’d ask you to look at it not in terms of owning the asset – which is where the upside potential for profit comes in – but in terms of renting it. Rental tenants, unlike buyers and sellers, consider rents strictly as a housing expense. There is no profit incentive or potential upside in it for them. A rental tenant makes their payment and gets their housing covered for that month. That’s it.
So yeah, if a rental tenant in 4S gets their income squeezed they might consider moving to Mira Mesa to replace the MM tenant that ended up downsizing to an apartment in North Park. Thus, a connection – indirect though it may be – can be drawn between the North Park apartment market and the Carmel Valley SFR rental market.
Like I said, it’s all connected. Some connections are just more direct than others.