When is the rent bubble going to burst?
October 1st, 2013 at 8:14 pm by Gary Mawson Jr.
Have you noticed the the price of rents have gone up steadily in NJ? How much longer can the market sustain the constant increase in rent? What will happen to my rental when the rental bubble does finally burst? All of these questions come to mind when thinking about the rental market. So when is the bubble going to burst?
My opinion is it will be in the next couple of years! The market has continually increased and the rents have gone up, but everything else around has stayed the same. The job market has not gotten any better. Median income has dropped, and the people who are hanging on to jobs are getting very minimal raises. So with all of this in mind what is the next step?
I think that these people should begin to buy again. Prices are still relatively low, and interest rates are very low as well. The buying power is tremendous right now and you can begin to build equity in a home rather than paying someones mortgage for them. There are a lot of homes on the market and as we enter the winter months the buyer pool shrinks and homes tend to sit a little longer. This may allow some buyers to get a better deal on a home than if they would have bought in the summer months when the market was on fire and everything was selling.
This rental market is always going to be strong in Monmouth County because of the proximity to the city, but let be realistic here, the market is going to come down a bit and we will see some of the undesirable areas become desirable rental markets in the future. There is only so much people can afford before they hit the breaking point.