Actually the demand from the bailing homeowners makes a lot of sense. Even when they leave their homes and move into an apartment, you can’t just put that empty home on the rental inventory list right away. There will be a lag. For various reasons, the empty houses aren’t put into use immediately. The houses will remain empty for several months, until the banks can unload them and an investor or buyer will put them back to use (at an appropriate price). Certainly the banks are not going to go into the rental business.
Until this (the active conversion of foreclosed homes to being used as rentals or homes) happens, you won’t see rent going down. I’ve talked to a few investors and they’re trying to do some deals, but I don’t see a whole lot of activity otherwise. Streamlining the foreclosure to rental process could lower the rents, but I don’t see that happening.
This lag is why I’ve always found fault with the idea that the large foreclosures will have an immediate impact on lowering rent here in San Diego.
