Will high foreclosures mean higher rents?
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Buried in today’s Real Estate section is too-brief Q&A with Harvard housing economist Nicolas Retsinas about the effect foreclosures will have on the rental market. The upshot, according to Retsinas:
All those owners are now becoming renters, and Economics 101 goes into effect. If you have high demand and a restrained supply the only result is higher prices.
Retsinas and his colleagues at Harvard’s Joint Center for Housing Studies have been pretty consistent housing bulls, citing steady immigration trends as the biggest driver of growth in the housing market. But in the center’s most recent report on the state of the nation’s housing last summer, the academics acknowledged that there was no way to know when the current real estate slump will end.
The supply/demand dynamic for rent prices appears to have already taken hold in some Southern California communities at the vortex of the recent wildfires. This headline in the Voice of San Diego: ‘Houses Burn, Neighbors Boost Rents’ was certainly a grabber.
Will the housing slump be a boon for landlords?
Thoughts? Comments?