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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: kris b who wrote (50326)1/20/2006 2:17:56 AM
From: Marc Hyman  Read Replies (2) of 110194
 
The collapsing house prices will be followed by crashing rents. Supply and demand.

You're forgetting about the sky-high price/rent ratios found in some places. In the SF Bay area,for example, the cost of owning is 2x (or more) the cost of rent. That's a lot of room for house prices to fall before there's any pressure on rents. In this case rent is impacted more my vacancy rates.

I'd expect falling house prices to have minimal impact on rents unless and until the price/rent ratio gets back to historic norms.

// marc
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