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Thursday, January 08, 2009

Housing: Declining Rents

by Calculated Risk on 1/08/2009 02:07:00 PM

With investors buying low priced homes to rent (see previous post) and the economy in recession, guess what happens? More rental supply, less demand and falling rents ...

From the LA Times: Housing downturn hits L.A.-area rents (hat tip Charlie)

After rising for several years, rents in the Los Angeles area are declining because of the economic recession and depressed home prices, researchers, real estate agents and property managers say.

The lower local rents match a national trend, according to a report released Wednesday showing apartment rents fell in 54 out of 79 U.S. metropolitan areas in the fourth quarter of 2008. Softening rents add another obstacle to a housing market recovery, economists say, because tenants with low rent payments feel less urgency to buy a home.

Nationwide, apartment rents eased 0.1% in the fourth quarter, the first drop since 2002, according to the analysis by research firm Reis Inc.