Quote:
Originally Posted by freemkt
Sure, rents can (theoretically) go down, but how often does that happen? (Rents are going up in my area.)
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How often? I don't know. If you're a Baby Boomer, most of your adult life has been spent in an inflationary economic environment, with perpetually increasing levels of private debt (and therefore wages, rents), so it wouldn't be common. It is clear that this process has been halted, and will be stopped for some period of time. We don't really know what things will look like from here on out, but I think that America from 1950 to the present does not constitute the entirety of global economic history, and that long-term deflation is a problem that other modern economies have dealt with.
where i live -- around 08, rental rates dropped sharply, while real estate sales dropped off a cliff.... but real estate prices stayed high, falling only very slightly between 08 and 09. The mood among developers, builders, agents, homeowners, was to ignore the hard questions about primary and secondary mortgage markets, labor markets and wages, etc., and remain optimistic.
by late 2010-2011, rents had found a bottom, maybe even risen slightly off that bottom, and real estate sales followed the same trend (risen slightly from their bottom)... but real estate prices had begun a very sharp decline, still in search of a bottom... and are currently sliding. I'm looking for a place to live as we speak --- and for the first time in years, buying is cheaper than renting in my area.