Hi,
i live in CA and out here housing costs on average $500,000. If real estate market goes down and houses sell cheaper, how likely isit for rent to come back down? Or will the rent stabilize in the area that it is now? Afterall, no landlord would want less rent?
2007-01-30 13:05:04 · 2 answers · asked by Mister D 1 in Business & Finance ➔ Renting & Real Estate
Because wayyyyy more people live in California than will ever be able to afford houses, the rental market is really a separate entity. During 30 yrs, I saw little correlation between the house prices and the rental market.
California ain't Ohio . . . not really any other state like it.
2007-01-30 13:16:26 · answer #1 · answered by kate 7 · 0⤊ 0⤋
The rental market in an area is usually set by supply and demand, not real estate values. About 20 years ago rents were based on the 1% rule of thumb for rates, not any more. Real estate prices have far exceeded the rental costs.
If a landlord doesn't rent for the average going rental rate in the area, he won't get tenants or he will lose them. Not a good business move.
I have a home that is worth $65,000. The old rule of thumb would be $650 a month. I get $375. Employment, cost of living and other factors in the area have caused this to happen. Bummer for me, huh?
It's just the way the cookie crumbles....
2007-01-31 07:06:40 · answer #2 · answered by Barbara 5 · 0⤊ 0⤋