Yet another fear-mongering “rents to skyrocket” article popped up this weekend, this one over at KIRO 7.
Odds are, they’re going to hike your rent next year — perhaps by more than you expected.
She slowdown in the Seattle housing market is beginning to impact apartment, condo and home renters, too.
For sale signs are becoming permanent fixtures in our neighborhoods. Buyers are scared. Many are now opting to rent, which means, more competition — and higher prices for rental units.
It’s true that if demand for rentals were steadily rising while the supply stayed constant (or declined), prices would continue to rise (to a point). That’s what the article, whose headline is “Housing Slowdown Expected To Send Rents Higher” is obviously claiming will happen when they talk about “scared buyers” driving up the demand for rentals. But amusingly, they go on to (apparently unwittingly) explain exactly why that is not likely to happen…
Two houses down the street haven’t sold, so Dave Goldberg decided to rent his instead.
At $1,600 a month, the rent payments will cover most of the mortgage.
“Sellers are scared. Sellers are feeling the effect of the downturn in the market — of what everyone thought would be a continuing rise in the market,” Goldberg said.
So, as the number of “scared sellers” increases, guess what? The rental supply increases, too. Increasing demand plus increasing supply equals rents stabilizing (or to be more accurate, rising steadily in line with incomes).
(Scott MacFarlane, Kiro 7, 10.19.2007)