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| photo by thinkpanama |
We at the Lusk Center put out the Casden Forecast for apartment
economics in Southern California every spring. When we put out our San
Diego numbers last week, we presented a result that confused people--we
expect both rents and vacancies to rise in the next year.
The reason this can (and often does) happen is that real estate markets operate with lags, and feature "natural" rates of vacancy. The "natural" rate is the rate at which real rents stay constant--if vacancies fall below the natural rate, real rents rise; if they rise above, rents fall. Stuart Gabriel and Frank Nothaft did a nice paper on this some time ago.
The reason this can (and often does) happen is that real estate markets operate with lags, and feature "natural" rates of vacancy. The "natural" rate is the rate at which real rents stay constant--if vacancies fall below the natural rate, real rents rise; if they rise above, rents fall. Stuart Gabriel and Frank Nothaft did a nice paper on this some time ago.
more about real estate:
Maybe nowadays people are renting more since they do not have what it takes to actually buy a property due to the extremely high prices. Last year, I travelled to Argentina and I was told that every apartment rental in Buenos Aires is owned by investors who use them for rent!
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