It’s not as though speculation would lead to higher rents.
What mechanism could cause a bubble in rent ?
It seems to me that rent is probably more firmly grounded in market fundamentals than prices. That goes for both commercial and residential. It’s driven by supply and demand.
As for the discrepancy in incomes and rents, doesn’t the 17% increase from 2000 to 2001 seem suspect ? Especially for the start of a recession. It seems to me that we need a longer time frame of data to make sense of this. Most of the “bubble” in rents is attributed to this strange jump. Perhaps the metric changed or they use models and adjust it with census data.
