News for hackers. Stuff that matters.

A comment on Apartment Rents Fall as Crush of New Supply Hits Market. Parent comment

Re:Apartment Rents Fall as Crush of New Supply Hits Market by highwaylights on Wednesday March 01, 2023 @02:56AM (#34979852)
Obviously this is one stranger’s uninformed opinion, but I do believe this situation will change faster than people would think.

So much money has been put into real estate as an investment due to unprecedentedly cheap debt over many years that it’s only beginning to unwind now.

Prices are falling, at least regionally. I don’t see how the real estate market can support small falls without a full crash, as unless there are substantial gains each year, landlords are facing mounting adjusted losses due to interest rate rises. Given the amount of leverage in real estate, most won’t be able to weather this storm without becoming insolvent, and those that can won’t be willing to do so.

tldr; I have high confidence this is just the beginning of a severe correction. (Again, just an armchair observer with an opinion).

[ Parent | on HN ]
Re:Apartment Rents Fall as Crush of New Supply Hits Market by jgwil2 on Wednesday March 01, 2023 @03:05PM (#34987540)
> I don’t see how the real estate market can support small falls without a full crash, as unless there are substantial gains each year, landlords are facing mounting adjusted losses due to interest rate rises.

In the US at least, this is unlikely to happen as mortgages are almost all fixed-rate. In fact, with inflation pushing up rents and reducing everyone's relative amount of debt, it's probably a great time to be a landlord.

[ Parent | on HN ]