When one considers that many landlords don’t always track FULL inflation when raising rents, the longer a tenant stays, the longer there may be a modest or even great discount in rents vs market.
=Disincentive to move = fewer properties enter rental/some of sale market
Then when they move out, the landlord is grateful as there is the potential to move to market or a windfall.
On the flip side, if they never buy, then they don’t get potential appreciation.
I would add to this that from a home owner’s (or landlords) point of view, there are a number of factors discouraging mobility (or selling):
1) You would lose any tax subsidy due to Prop 13.
2) Prices have risen so much that many people can’t afford anything near as nice as what they have, much less something better.
3) Rents haven risen just like house prices and so lots of rentals are cash positive.
4) When prices are going up so fast, why would you sell? This leads to a psychology of being more inclined to hold onto your current house.
Overall, it seems to me that the current situation has lead to a whole lot of “House Hording”.
That makes no sense. Housing demand comes from more people looking for housing than available. It’s really that the economy fundamentally changed in the last 20 years. Sure there is inflation as well, but really this is about demand growth and lack of supply. As SD’s population has increased it’s income mixed has changed even more rapidly. While there are and will be plenty of poors the upper middle income and rich have increased markedly as a percentage of the population and they are driving housing prices.
Agreed! I remember arguing with CAR et al that this place was fundamentally changing and being laughed at. This is not our parents San Diego anymore and it quickly wont be ours anymore
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