This winter, the market is over saturated with rental properties with 5 times more inventory than last year. As a result of that, the market rent drops from 10% to 20% depending on the area.

The followings are two main reasons why we are experience such a rapid surge of rental inventories.

1. Due to the rapid housing price decline in the past year, a lot of sellers decided to rent their houses out instead of selling them. By doing so, it creates a huge number of rental inventories.

2. A lot of renters with good credit who sold their houses at the heights of the market decide to make a purchase now instead of continue renting since market price has drop as much as 45%. Because of that, we see a large shrinkage of quality renters with good credit and also the increase of available rentals.

Because of the large increase in inventory, landlords are cutting prices to attract potential renters. That is why we are seeing a huge price drop in rent.

 

4 Comments on Rent Drops 10% to 20% In One Year

NOV
27
2008
104,739 Points Outside Blog

Once the snowball started down hill, you knew it would continue to pick up in other areas.  Something to consider when purchasing an investment unit.

5:42pm • #1
276,183 Points 15 Featured Posts Outside Blog

Rents tend to follow incomes. Quality renters are always hard to find.

5:58pm • #2

That is significant Caroline.  That is a huge drop but it is happening in our market - it is better to have a house lived in than not. It is better to rent if you can't sell. My clients are doing that and so I am I. Insurance is very high for a vacant house. Even if you decide to take a little less it is better to have someone in the house.

6:25pm • #3
582,800 Points 34 Featured Posts Localism Sponsor Outside Blog Hit Router

The bottom line is that there are too many properties...  They are either going to be for sale or for rent... or just sit there all alone.  If sale inventory is dropping and the vacants are still there, they become rentals.

7:39pm • #4

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Caroline Tsou Chai

Diamond Bar, CA

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RE/MAX Realty 100

Address: 1411 S. Diamond Bar Blvd, Diamond Bar, Ca, 91765

Cell Phone: (626) 922-8408

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