While housing prices remain moribund, the demand for rental properties has rates surging across the country. Simple economics will tell you the longer that people hold off buying the more renters are created. The newly married and young buyers that normally would enter the housing buying cycle are still renting as fear, uncertainty, and doubt are dominating the marketplace.
But then a funny thing will happen. Rents will be too high to not justify buying even if there is some downside to the purchase. These same folks that have held off will create so much pressure on the rental market that when they decide to buy, they will all at once not to miss out.
That is why real estate is such a funny business. Mass consumer sentiment plays a much greater role than almost any other marketplace.
Here is a list of major metropolitan markets and the median rent being charged for the first quarter of 2008 from Realtor Magazine.
Las Vegas: $1,056
Los Angeles: $1,699
New York: $1,751
San Francisco: $1,810
Washington D.C.: $1,687