Amid the Real Estate Bubble prices, few have noticed the disasterous state of the rental markets.
Walk through any office building, it's half empty. Walk through any apartment complex, ditto!
As go the office rents, so goes the apartment rents.
What it really feels like "on the ground" is that "people dry up!"
NOBODY IS EVEN LOOKING ANYMORE!
It's not like you can lower the rent, and THEN you will get a tenant. It doesn't work like that.
YOU SIMPLY CAN NOT EVEN GET ANYONE TO TALK TO YOU!
Why is this?
Well, among the "tenant class" for apartments, these people are really the "canaries in the mineshaft" for the economy.
When the economy is punk, tenants go away. Nobody knows where they actually go. They just go. Probably, back with mom and pop. Or they move in with friends. And, doubling and tripling up has been going on for years!
FOR MANY YOUNG PEOPLE HAVING THEIR OWN APARTMENT IS THE ULTIMATE LUXURY. AND, ALAS, MANY CAN NOT AFFORD IT ANYMORE BECAUSE OF LOW WAGES AND A POOR JOB MARKET.
Also, there are demographic issues in play.
There was a "birth dearth" in the 1970's, during the last Great Recession. And so, we simply have fewer young people to fill the apartments.
Indeed, many young people today are from "foreign sources."
And, among these new foreigners, like Hispanics and Middle Eastern immigrants, who tend to have large families, many prefer to live in "extended family" households.
They are not big sources for new household formation.
And, among many native Americans, "having kids" is often seen to be "low class."
Many young American women nowadays don't have kids, they have law practices! But ten years or so, down the line, that starts to bite at the economy in unpredictable ways.
Additionally, the "end of welfare as we knew it" has forced many poor people to abandon the rental market completely;
And seek alternative housing, either with relatives and friends, in subsidized units, or in homeless shelters.
THE POINT IS: IT ALL ADDS UP AFTER A WHILE.
DEMOGRAPHICS, ECONOMICS, SOCIAL TRENDS, BIRTH RATES;
EVENTUALLY YOU HAVE TODAY'S RENTAL MARKET, WITH VACANCY RATES AT RECORD HIGHS.
http://money.cnn.com/2004/02/10/pf/yourhome/rentalprices/index.htm
