Updated 09/27/22  This newsletter is updated as the economy and situations change.

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“When people can no longer afford to buy a home, the price of rent goes up.”  It is likely rents will increase in the coming year because high interest rates have driven mortgage payments up which drives rents up. Though there are government restrictions with regards to increasing rent in many properties, it won’t help much, and in many cases actually provoke landlords to raise rent as much as legally possible every chance possible so they don’t miss the opportunity tomorrow. 

The only situation that can lower rents is an abundance of vacancies that can be caused by either a declining population or exceptionally high unemployment. 

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Updated 03/28/23  This newsletter is updated as the economy and situations change.

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“When people can no longer afford steak, the price of chicken goes up, “Alex Schauffert.  As an analogy in this case steak being the home you buy and chicken being the home you rent.                      Buying a home is increasingly more difficult, still, everyone needs a place to live.   It is likely, just as in our last recession of 2007, that rental properties will stay in demand for needed housing. The highest market rents may fall off a little but the mid-level and lower level rents should stay strong, maybe even continue to rise.    The only factor affecting rents, stronger than housing purchase affordability is population growth or decline.   I believe California’s, population will hold or continue to grow in the future.

Another significant factor is inflation which is always on the rise.

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Updated 08/31/22 

This newsletter is updated as the economy and situations change.

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“When people can no longer afford steak, the price of chicken goes up” Alex.     

Higher interest rates and record-breaking inflation continue to financially strangle the average person. Buying a home is increasingly more difficult, still, everyone needs a place to live.   It is likely,  just as in our last recession of 2007, that rental properties will stay in demand for needed housing especially if home sales dwindle. 

The only factor affecting rents, stronger than housing affordability, is population growth or decline.   I believe California’s, population will hold or continue to grow keeping rents high.

Another significant factor is inflation which historically parallels government spending so it has some catching up to do. (Meaning more inflation ahead.)

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Updated 06/20/22  This newsletter is updated as the economy and situations change.

As higher interest rates and record-breaking inflation continue to financially strangle the average person, it is likely,  just like in our last recession of 2007, that rental properties will stay in demand for needed housing. The highest market rents may fall off a little but the mid-level and lower level rents should stay strong.  I coined a saying, “When people can afford stake the price of chicken could go up.”

There are indications from financial factors and even cyclical timing reasons that we could be heading towards a recession soon.  This may not be a bad thing for rentals.  In 2005 through 2007 when property values plummeted, rental values stayed high.  It seems that everyone who lost or gave up their home still needed a place to live so rents stayed strong.  If interest rates and prices, make it hard to buy a place to live, renting one is the next option.  So if or when the housing market softens the rental market could stay strong or even strengthen.  The only factor affecting rents, stronger than housing affordability is population growth or decline.  California took a .03% decline in population over the past 12 months. That is small but if it is the beginning of a trend rents will decline.   I believe, at least in California, the population over time will continue to grow.  A lesser but still significant factor is inflation which is on the rise.

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