[quote=Ren]There are so many variables that it’s difficult to predict what will happen in any rental market.
What if the bubble investors stop making payments, but still rent their properties while awaiting foreclosure, and at a steep discount? That would mean downward pressure on rents in the area.
Investors plan on buying up huge numbers of these foreclosures (both former investment properties and buyer residences) in the next several years. How will tens of thousands of new rental properties affect the market? More downward pressure.
How will a HUGE flood of former “owners”, now foreclosed upon and needing to rent, affect the market? Upward pressure.
I don’t know which has more influence, so I have no idea. I do know that the houses we’ve been looking at to rent in north county have been overwhelmed with prospective tenants, most of them foreclosure victims.
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These factors actually sum up to nearly zero. Homeowners moving out because of foreclosures pretty much cancel out the houses scooped up by investors to rent them out.
What matters is the total number of housing units produced and the total number of net new households formed. Since housing production is pretty much stymied, that leaves us with net household formation.
