Rents have been steadily increasing in most parts of the country for the past several years. There are however a few places where rents have been on the decline as HuffPo reports here, but for the most part, increasing rents still rule the day.
Many have a hard time connecting the dots to explain these rent increases and decreases. Rent is nothing more than a price, subject to economic laws just like any other price. Rents go up when demand is high and supply is short. Rents decline when the opposite occurs. Demand increases because more people are chasing the same number of rental units thus pushing rents up. This can happen due to a foreclosure crisis which pushes people into the rental market or because of some strong attraction such as job growth. Restrict the construction of new rental units to feed this demand and rents will rise even more. Pump trillions of newly printed dollars into the economy and rents will rise even more.
Why will pumping trillions of newly printed dollars into the economy cause rents to rise even more?
What economic mechanism will cause this to occur?
Charles,
In a word, inflation. All of that new money ends up chasing the same amount of goods causing prices in general to rise. Since rent is a price, it will rise along with the prices of food, cars, houses, etc.
Thanks for reading and commenting,
Kevin
My rents have been increasing, and vacancies virtually non-existent. And, tenant quality is up. it is a great time to be a landlord!
As always, you need a quality place to attract the best tenants, no mater what rental market we are in.
Same here generally, I just wonder how long it last.
As always, thanks for reading and commenting,
Kevin