There were some interesting comments on the recent threads discussing rents over on the Calculated Risk blog today.
I now see how it is possible for rents to fall even in the face all these foreclosures turning owners of mortgages back into owners of leases.
I had been unconciously assuming household size is fixed and that mostly you have owners and renters, only affected by birth rate/population inflow or outflow. But I failed to account for people “doubling up” in hard times. That is, I was assuming household size doesn’t really change.
But if the comments on CR are correct, we have a national historic low average size household combined with a historic oversupply of housing in what could be a historic recession. This doesn’t predict anything specific for S.D. but does imply many more houses than really required on a national level.
Just food for thought. My gut says rents have to come down. Otherwise I can’t see why all these sub 200K properties aren’t being scooped up by investors. I know there is large investor interest but that hasn’t kept prices from continuing to fall.
