The rental market immediately dries up as everyone with the ability to move into a rental place does so. Owners of apartments and rental houses immediately divest at the earliest possible time since properties are no longer lucrative. In the meantime, they fail to put any effort into the pretense of basic upkeep except whatever makes their rentals sellable.
The market becomes immediately saturated with previous rental properties now available for individual sale and high supply lowers cost dramatically. The idea of sunk costs makes owners unlikely to sell at rock bottom prices so apartment complexes and the like go out of business, evict everyone and sell their copper from their air conditioners to modestly recuperate the last few months of expenses (water, electricity, leading office staff, etc) and burn them down for insurance money. Single family homes are donated for the use of younger relatives until the market recuperates enough to sell.
It’s a wild ride for about $24 worth of months for all renters, then, ultimately, the price of housing comes down but renting is no longer a “thing”. Some renters can now afford to buy their own houses (Yahoo!) but without changing the pay structure of society, the most vulnerable of wage workers are now homeless (Crap).
That sounds about right. Thanks for the thorough response. I wonder if, in that scenario, the government offered a bailout to convert to condos, it would help at all to prevent housing recession.
The rental market immediately dries up as everyone with the ability to move into a rental place does so. Owners of apartments and rental houses immediately divest at the earliest possible time since properties are no longer lucrative. In the meantime, they fail to put any effort into the pretense of basic upkeep except whatever makes their rentals sellable.
The market becomes immediately saturated with previous rental properties now available for individual sale and high supply lowers cost dramatically. The idea of sunk costs makes owners unlikely to sell at rock bottom prices so apartment complexes and the like go out of business, evict everyone and sell their copper from their air conditioners to modestly recuperate the last few months of expenses (water, electricity, leading office staff, etc) and burn them down for insurance money. Single family homes are donated for the use of younger relatives until the market recuperates enough to sell.
It’s a wild ride for about $24 worth of months for all renters, then, ultimately, the price of housing comes down but renting is no longer a “thing”. Some renters can now afford to buy their own houses (Yahoo!) but without changing the pay structure of society, the most vulnerable of wage workers are now homeless (Crap).
Or something, idk.
That sounds about right. Thanks for the thorough response. I wonder if, in that scenario, the government offered a bailout to convert to condos, it would help at all to prevent housing recession.