Ask HN: Path to understand divergence between rent and house prices?
I was reading this LinkedIn story: https://www.linkedin.com/news/story/a-most-unusual-time-for-housing-4330825/
> The U.S. housing market has been turned upside down over the past year, with home prices and rent rates going in opposite directions. Fierce competition for suburban homes has driven prices skyward, all while rental rates in urban hotspots have tumbled. What's behind the shift?
And I'd love to understand why this is happening somewhat deeply. I don't have any econ/finance background, but I have Google.
I'd love it if someone with a background could just throw resources, key terms, etc at me.
Who are the players? What policies and laws are in play here? What are everyone's incentives? etc There is a bubble in housing at the higher end where people who previously paid for e.g. childcare and had two incomes now have an extra $1200-$4000 or more per month. They are buying. There is a crush in employment at the lower end where people literally cannot afford their rent, and many have not paid rent since nearly a year ago but cannot be evicted. There is simultaneously a very different feel in many urban areas with nightlife nonexistent and no reason for most people to be there. It is a short-term (probably) devaluing of urban environments plus a growing income disparity appearing in the housing market. I think the reopening will be very hard on housing and the stock market as childcare, going out, travel, etc draw down on bank accounts on the high end and people start to try to lock in their gains. I don’t have any resources for you, but I would guess that it is speculators getting into buying houses for resale value, combined with existing landlords who are being forced to maintain low rents due to COVID. When the COVID restrictions are lifted, and the landlords can yank their rates much higher, then many tenants will want to escape those raises, but all landlords will likewise be raising rates. So, there will be no escape if you remain a renter. Therefore, many of those renters are going to want to escape to houses that they can purchase. Which is when they discover that the speculators have bought up all the supply and can now afford to set the sales prices sky high. Oh, and many of those speculators are probably also rental landlords, too.