patrick.net

Is anyone aware of an inverse correlation between a housing bubble of massive proportions popping and subsequently rising rents?

My thinking goes something like this: after all the suckers who go bankrupt lose their houses and are back in the rental market, they will drive vacancy rates in typical rental properties lower (supply and demand).

*Or* do all those illegal in-law suites all over the place absorb a lot of those ex-property owners, and do all those empty houses now rented after foreclosure or whatever depress the market?

As house prices go down over several years (by not appreciating or actually coming down, whatever), and rent gets more expensive (lower vacancy rates), these same people will start to think about the money they are wasting renting and thinking about buying again, and the cycle begins anew.

My vote - I have a feeling rents will be going up as housing prices go down.

Any thoughts?

by tsusiat

#housing