Rent Market

[EconProf]

Rental markets are dependent on local conditions, so I cannot comment on the Hawaiian situation, but my recent experience in San Diego suggests it is weak here.
I had remarkably low response to my aggressive marketing of a University Heights/Normal Heights house. Quickly lowered the rent & have a likely tenant as I believe in quickly adjusting to market realities. Noticed a lot of competing houses languishing on the market for a long time.
Prospective landlords should lower their revenue expectations in recognition of the deflationary environment we are in, at least for high/middle range houses.

[Ren]

There are so many variables that it’s difficult to predict what will happen in any rental market.

What if the bubble investors stop making payments, but still rent their properties while awaiting foreclosure, and at a steep discount? That would mean downward pressure on rents in the area.

Investors plan on buying up huge numbers of these foreclosures (both former investment properties and buyer residences) in the next several years. How will tens of thousands of new rental properties affect the market? More downward pressure.

How will a HUGE flood of former “owners”, now foreclosed upon and needing to rent, affect the market? Upward pressure.

I don’t know which has more influence, so I have no idea. I do know that the houses we’ve been looking at to rent in north county have been overwhelmed with prospective tenants, most of them foreclosure victims.

[Ren]

There are so many variables that it’s difficult to predict what will happen in any rental market.

What if the bubble investors stop making payments, but still rent their properties while awaiting foreclosure, and at a steep discount? That would mean downward pressure on rents in the area.

Investors plan on buying up huge numbers of these foreclosures (both former investment properties and buyer residences) in the next several years. How will tens of thousands of new rental properties affect the market? More downward pressure.

How will a HUGE flood of former “owners”, now foreclosed upon and needing to rent, affect the market? Upward pressure.

I don’t know which has more influence, so I have no idea. I do know that the houses we’ve been looking at to rent in north county have been overwhelmed with prospective tenants, most of them foreclosure victims.

[Ren]

There are so many variables that it’s difficult to predict what will happen in any rental market.

What if the bubble investors stop making payments, but still rent their properties while awaiting foreclosure, and at a steep discount? That would mean downward pressure on rents in the area.

Investors plan on buying up huge numbers of these foreclosures (both former investment properties and buyer residences) in the next several years. How will tens of thousands of new rental properties affect the market? More downward pressure.

How will a HUGE flood of former “owners”, now foreclosed upon and needing to rent, affect the market? Upward pressure.

I don’t know which has more influence, so I have no idea. I do know that the houses we’ve been looking at to rent in north county have been overwhelmed with prospective tenants, most of them foreclosure victims.

[Ren]

There are so many variables that it’s difficult to predict what will happen in any rental market.

What if the bubble investors stop making payments, but still rent their properties while awaiting foreclosure, and at a steep discount? That would mean downward pressure on rents in the area.

Investors plan on buying up huge numbers of these foreclosures (both former investment properties and buyer residences) in the next several years. How will tens of thousands of new rental properties affect the market? More downward pressure.

How will a HUGE flood of former “owners”, now foreclosed upon and needing to rent, affect the market? Upward pressure.

I don’t know which has more influence, so I have no idea. I do know that the houses we’ve been looking at to rent in north county have been overwhelmed with prospective tenants, most of them foreclosure victims.

[Ren]

There are so many variables that it’s difficult to predict what will happen in any rental market.

What if the bubble investors stop making payments, but still rent their properties while awaiting foreclosure, and at a steep discount? That would mean downward pressure on rents in the area.

Investors plan on buying up huge numbers of these foreclosures (both former investment properties and buyer residences) in the next several years. How will tens of thousands of new rental properties affect the market? More downward pressure.

How will a HUGE flood of former “owners”, now foreclosed upon and needing to rent, affect the market? Upward pressure.

I don’t know which has more influence, so I have no idea. I do know that the houses we’ve been looking at to rent in north county have been overwhelmed with prospective tenants, most of them foreclosure victims.

[(former)FormerSanDiegan]

[quote=Ren]There are so many variables that it’s difficult to predict what will happen in any rental market.

What if the bubble investors stop making payments, but still rent their properties while awaiting foreclosure, and at a steep discount? That would mean downward pressure on rents in the area.

Investors plan on buying up huge numbers of these foreclosures (both former investment properties and buyer residences) in the next several years. How will tens of thousands of new rental properties affect the market? More downward pressure.

How will a HUGE flood of former “owners”, now foreclosed upon and needing to rent, affect the market? Upward pressure.

I don’t know which has more influence, so I have no idea. I do know that the houses we’ve been looking at to rent in north county have been overwhelmed with prospective tenants, most of them foreclosure victims.
[/quote]

These factors actually sum up to nearly zero. Homeowners moving out because of foreclosures pretty much cancel out the houses scooped up by investors to rent them out.

What matters is the total number of housing units produced and the total number of net new households formed. Since housing production is pretty much stymied, that leaves us with net household formation.

[(former)FormerSanDiegan]

[quote=Ren]There are so many variables that it’s difficult to predict what will happen in any rental market.

What if the bubble investors stop making payments, but still rent their properties while awaiting foreclosure, and at a steep discount? That would mean downward pressure on rents in the area.

Investors plan on buying up huge numbers of these foreclosures (both former investment properties and buyer residences) in the next several years. How will tens of thousands of new rental properties affect the market? More downward pressure.

How will a HUGE flood of former “owners”, now foreclosed upon and needing to rent, affect the market? Upward pressure.

I don’t know which has more influence, so I have no idea. I do know that the houses we’ve been looking at to rent in north county have been overwhelmed with prospective tenants, most of them foreclosure victims.
[/quote]

These factors actually sum up to nearly zero. Homeowners moving out because of foreclosures pretty much cancel out the houses scooped up by investors to rent them out.

What matters is the total number of housing units produced and the total number of net new households formed. Since housing production is pretty much stymied, that leaves us with net household formation.

[(former)FormerSanDiegan]

[quote=Ren]There are so many variables that it’s difficult to predict what will happen in any rental market.

What if the bubble investors stop making payments, but still rent their properties while awaiting foreclosure, and at a steep discount? That would mean downward pressure on rents in the area.

Investors plan on buying up huge numbers of these foreclosures (both former investment properties and buyer residences) in the next several years. How will tens of thousands of new rental properties affect the market? More downward pressure.

How will a HUGE flood of former “owners”, now foreclosed upon and needing to rent, affect the market? Upward pressure.

I don’t know which has more influence, so I have no idea. I do know that the houses we’ve been looking at to rent in north county have been overwhelmed with prospective tenants, most of them foreclosure victims.
[/quote]

These factors actually sum up to nearly zero. Homeowners moving out because of foreclosures pretty much cancel out the houses scooped up by investors to rent them out.

What matters is the total number of housing units produced and the total number of net new households formed. Since housing production is pretty much stymied, that leaves us with net household formation.

[(former)FormerSanDiegan]

[quote=Ren]There are so many variables that it’s difficult to predict what will happen in any rental market.

What if the bubble investors stop making payments, but still rent their properties while awaiting foreclosure, and at a steep discount? That would mean downward pressure on rents in the area.

Investors plan on buying up huge numbers of these foreclosures (both former investment properties and buyer residences) in the next several years. How will tens of thousands of new rental properties affect the market? More downward pressure.

How will a HUGE flood of former “owners”, now foreclosed upon and needing to rent, affect the market? Upward pressure.

I don’t know which has more influence, so I have no idea. I do know that the houses we’ve been looking at to rent in north county have been overwhelmed with prospective tenants, most of them foreclosure victims.
[/quote]

These factors actually sum up to nearly zero. Homeowners moving out because of foreclosures pretty much cancel out the houses scooped up by investors to rent them out.

What matters is the total number of housing units produced and the total number of net new households formed. Since housing production is pretty much stymied, that leaves us with net household formation.

[(former)FormerSanDiegan]

[quote=Ren]There are so many variables that it’s difficult to predict what will happen in any rental market.

What if the bubble investors stop making payments, but still rent their properties while awaiting foreclosure, and at a steep discount? That would mean downward pressure on rents in the area.

Investors plan on buying up huge numbers of these foreclosures (both former investment properties and buyer residences) in the next several years. How will tens of thousands of new rental properties affect the market? More downward pressure.

How will a HUGE flood of former “owners”, now foreclosed upon and needing to rent, affect the market? Upward pressure.

I don’t know which has more influence, so I have no idea. I do know that the houses we’ve been looking at to rent in north county have been overwhelmed with prospective tenants, most of them foreclosure victims.
[/quote]

These factors actually sum up to nearly zero. Homeowners moving out because of foreclosures pretty much cancel out the houses scooped up by investors to rent them out.

What matters is the total number of housing units produced and the total number of net new households formed. Since housing production is pretty much stymied, that leaves us with net household formation.

[peterb]

It may be a seasonal thing, but I have been closely following rentals in NorCal and the volume is growing while the prices are coming down. This has been evident in the last 3 months.
Foreclosures and unemployment will probably cause the “substitution effect” to come into play as demand destruction is starting to gain speed. In other words, people may go from homes to apartments or start sharing homes and apartments as a substitute for what they were doing before the problems happened. This will probably cause downward pressure on the rental markets as this trend continues.

[peterb]

It may be a seasonal thing, but I have been closely following rentals in NorCal and the volume is growing while the prices are coming down. This has been evident in the last 3 months.
Foreclosures and unemployment will probably cause the “substitution effect” to come into play as demand destruction is starting to gain speed. In other words, people may go from homes to apartments or start sharing homes and apartments as a substitute for what they were doing before the problems happened. This will probably cause downward pressure on the rental markets as this trend continues.

[peterb]

It may be a seasonal thing, but I have been closely following rentals in NorCal and the volume is growing while the prices are coming down. This has been evident in the last 3 months.
Foreclosures and unemployment will probably cause the “substitution effect” to come into play as demand destruction is starting to gain speed. In other words, people may go from homes to apartments or start sharing homes and apartments as a substitute for what they were doing before the problems happened. This will probably cause downward pressure on the rental markets as this trend continues.

[peterb]

It may be a seasonal thing, but I have been closely following rentals in NorCal and the volume is growing while the prices are coming down. This has been evident in the last 3 months.
Foreclosures and unemployment will probably cause the “substitution effect” to come into play as demand destruction is starting to gain speed. In other words, people may go from homes to apartments or start sharing homes and apartments as a substitute for what they were doing before the problems happened. This will probably cause downward pressure on the rental markets as this trend continues.

[Author]

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