It took a while but finally the collapse in housing, coupled with an overall contraction, is beginning to affect rents.
In recent months, headlines have been popping up noting that rents — finally — are beginning to follow home prices into the abyss.
Since the housing market began to crumble, would-be homeowners were forced to become renters, keeping demand for rental units relatively strong even as home prices fell. Now, however, as landlords convert condos into rentals, supply is beginning to move in tenants’ favor.
Commercial real estate has been feeling this pain for a while already. Now there is enormous downward pressure on residential rents also. More and more landlords will begin to proactively lock in long term leases at lower rents. Tenants have a lot of leverage. Looking for new places to rent will be a good way to exercise that leverage.