Why are rent going down?

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Gohabsgo_IHB

Gohabsgo_IHB

New member
I don't understand why rent would go down.



My logic is as follow: As people lose their homes, they move into apartments creating more demand for rents and causing rent increases.



Can someone shed a little bit of light here?
 
[quote author="Roo" date=1208905577]I don't understand why rent would go down.



My logic is as follow: As people lose their homes, they move into apartments creating more demand for rents and causing rent increases.



Can someone shed a little bit of light here?</blockquote>


When the homes are empty...they will need to rent it out :)



Off setting...eventually the price to rent will be more than a mortgage and that is when the IHB gospel signals



BUY BUY BUY!
 
A lot of people can't sell their home so they decide to rent it. The landlords for the home we are currently renting bought their retirement house outside of Orange County. They couldn't sell this house so they are renting it. I also have a friend in Phoenix who was relocated with his job. He couldn't sell his house, so he now rents it out as well.
 
[quote author="optimusprime" date=1208905661]

When the homes are empty...they will need to rent it out :)

</blockquote>


But the homes are currently vacant?



Even if that was true, the total number of housing unit (apartments, condos, and homes) didn't decrease, so the overall demand should be similar.
 
this is what an IAC leasing agent told me a couple of months ago, the number of applicants for rentals increased but that didn't translate into leases - many were denied due to the information that came back on the credit check (foreclosures, late payments, etc).
 
[quote author="anela" date=1208906030]this is what an IAC leasing agent told me a couple of months ago, the number of applicants for rentals increased but that didn't translate into leases - many were denied due to the information that came back on the credit check (foreclosures, late payments, etc).</blockquote>


That's one thing about IAC...they actually run a thorough credit check and multiple x income to figure if you can afford the place.



No deadbeats in Irvine baby lol
 
Paying rent requires income. I noticed that after the New Century, etc went under, many of the young people driving fancy cars have disappeared from my rental complex. With the unemployment rate up, perhaps more people are leaving rentals and going to live with friends or parents?



Also, there is the rent a room phenomenon. Ex. homeowner can't make their new payments, calls mortgage servicer and asks for suggestions, mortgage servicer suggests cutting back on expenses and renting a room out. So they do - and that empty room is now full, freeing up a rental apartment.
 
[quote author="Roo" date=1208905907][quote author="optimusprime" date=1208905661]

When the homes are empty...they will need to rent it out :)

</blockquote>


But the homes are currently vacant?



Even if that was true, the total number of housing unit (apartments, condos, and homes) didn't decrease, so the overall demand should be similar.</blockquote>


Have you asked why it's vacant? Is it on the market, is it in the processed of getting REO?



Unless the owner is independently wealthy and can keep paying a mortgage on an empty pad....etc



The house will get rented out or be sold at a nice discount.
 
People are moving to cheaper areas...nothern Cali, san diego, and out of state. People are also getting roommates. The One bedroom IAC units have been dropping like rocks.
 
Spoke with a friend who works for IAC.



Said that occupancy rates were dropping so they lowered rents and now occupancy rates are somewhat stabalized.



Unscientific I know. No quoted numbers. Just my friends observation.



Her other comment was that many renters were leaving California all together. Couldn't afford a house and the rents were too expensive why stay.



The friend is also in process of leaving California.
 
[quote author="lendingmaestro" date=1208914093]People are moving to cheaper areas...nothern Cali, san diego, and out of state. People are also getting roommates. The One bedroom IAC units have been dropping like rocks.</blockquote>


Dual Master Bedrooms FTW!!
 
My IAC went down $ 110.00 a month for my 1 Bedroom off what IAC wanted

on my renewal.

You got to haggle with them and show you are willing to move.

The IAC place I live in is at least 10% empty. And now they want

like 3 months for a lease break fee? I just dont see a pool of

tenants that are going to qualify and can "afford it" getting better

anytime soon either. I see rents continue to decrease as the supply

of IAC units increases. New IAC props in Woodbury. And the pool of

willing renters continue to move out of state or to cheaper cities..



Remember RE prices and rents never go down in Irvine.
 
Rents are going down because vacancy is going up.



Vacancy is going up because speculation has slowed if not ceased and previously vacant homes held be speculators that were removed from the housing inventory for living, are returning to the housing stock. The appreciation bubble in prices pulled numerous units out of the supply squeezing available rentals. They are now returning and because of the artificial inflated rents, development has also increased for rental units.



So while the housing price bubble is going to collapse, it's going to get hit with a double whammy of softening and decreasing rents because rental stock will increase.
 
When IAC decide to start advertising Apartments on Craigslist you'll know they're desperate :cheese:



Also, when they decide to hold existing Renters hostage with a $5k lease-break fee you'll know they've gone mad :vampire:



Oh wait.....
 
[quote author="PeterUK" date=1208954526]When IAC decide to start advertising Apartments on Craigslist you'll know they're desperate :cheese:



</blockquote>


I swear I just saw them advertising The Village on TBS last night. Did they always do that?
 
[quote author="awgee" date=1208983243]Roo - What is your Avatar? It looks like a pier piling with something on it, but I can not tell.</blockquote>
Those would be starfish, awgee.
 
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