[quote=Rich Toscano][quote=sdsurfer]I’m really curious. My logic is that if prices were to fall then rents will go up because more people will choose to rent while they attempt to time the bottom of the market. What does everyone else think? Thanks![/quote]
I don’t know, you are focusing on just one supply/demand factor among many. For instance, if the price decline is driven by a recession, that would also negatively impact rental demand and pricing power.
Rents were somewhat strong during the GFC because so many people were booted from their homes they had owned. But that was a pretty severe situation, with mass foreclosures… barring that, I don’t think you can reliably predict rents going up in a housing downturn. Just my .02.[/quote]
Thanks Rich! I don’t know either and would love some data that goes through multiple downturns because there are always multiple factors. I’ve been looking for the data without success so here I am working from theories. I guess I thought this might be an interesting topic for anyone that is interested in long term investing tied to Real Estate in SD. I’m trying to use actual data to learn from the past rather than predict anything here.
I absolutely agree that a decline driven by a recession would negatively impact rental demand/PP, but to what extent? I guess it depends on how bad it is, but people would have to stop coming here AND leave for the rents to go down…just my opinion of course.
