sdsundevil, this is all part of the housing cycle, as I’m learning. In FL, the rents are dropping like crazy, as people who cannot sell their homes and banks with foreclosed properties are putting those homes on the rental market. FL is several quarters ahead of us in this downturn.
Rents here will flatten out or decline slightly next year, as the carrying costs of the 30% of vacant homes on the market becomes too high. Thousands of downtown condos will add to the rental pool.
Rents in SD have never gone into a bubble. They can’t. If rents get too high, people either leave town or double or triple up. Housing prices only got high because of exotic lending, but notice that housing payments cannot exceed 50% of income. People have stretched to pay 50% of income on a mortgage believing in appreciation, but they will not stretch that much for a rental.
So while your theory is interesting, it is pure folly. I suggest you google what is going on in Florida with their rents, and report back.
