In the Southern California Real Estate Markets, sales prices are leveling (not dropping), rents are higher then ever before, and, new construction is way down. All this is a recipe for an outstanding 2006. On the sales side, fewer new homes means, existing home sales prices will hold if not increase slightly. Supply and demand kicks in here.
Higher rents; Renting is the alternative to ownership without any of the benefits of ownership. All Southern California areas are reporting increases in rents, some, as high as 20%. That’s good for 2 reasons and two markets. Most renters who are paying rent each and every month could afford to buy. They just don’t realize it. Also, 2nd home and investment buyers have a better chance of breaking even or even turning a profit on their residential income properties, faster than previously thought. Seller’s are selling, buyer’s are buying, and, renters are paying their Landlord’s mortgage and financing her new Mercedes Benz, that she paid cash for thanks to her 20% increase in rental income. She loves her tenants!! (not enough to fix that leaky toilet)