Most of the focus has been on home prices, but it is just as important to note that from 2000 to 2007, rents in San Joaquin County increased 46%, while household income increased 27%. I think this trend of gradually decreasing to flat rents will continue for another two years, and average asking rent will likely decrease another $30-50 per month to the low $800s.
And with all due respect to Terry Hull (whom I like and think is pretty knowledgable about the market), basic economics doesn't describe "too much" demand or "too much" supply.
"It's too much supply and too little demand - just classic economics," said
Terry Hull, whose Stockton-based family business Property Management Experts
manages apartment complexes, duplexes, triplexes and rental homes from Elk Grove to Fresno.
Supply has increased and prices (rents) have decreased. This is good for buyers (renters), and bad for sellers like Terry. Through the boom, rent increases were also outpacing income growth, and rental property investors have had a good run. They are also picking up new property now at very attractive pricing.
I also think it is good for the overall Valley economy, as cash that isn't spent for rent will be spent or saved in other ways, and reducing housing costs is important to attracting new business investment (and new jobs) to the region.