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Greenwich CT (& National) RENTALS

I went to a presentation not too long ago by Lawrence Yun, Ph.D (Chief Economist of the National Association of Realtors) on the state of the housing market and how it might apply to Greenwich CT real estate.  I wrote up a little summary on this a couple weeks ago that yo can find here. One of the charts I found interesting was this one:This chart shows the relative increase in price of real estate and cost to rent since 1980 for the nation. As you can see, up until approximately 2002 both rentals rates and cost of real estate grew as extremely similar rates. At this point home prices sky rocketd and rental rates continued its normal growth.  If I had this charge for just Greenwich, CT I'd be willing to bet the numbers and growth patterns would be extremely similar.  The problem with analyzing Greenwich real estate and Greenwich rentals is that there simply isn't enough data to do a proper macro-level analysis.

Looking at the past 10 years we can see how home prices pulled away from rental rates and then dropped below rents about the same time that the market really crashed. Keep in mind the graph is showing growth rates (from the 1980 base line), not actual rental numbers. Although this graph isn't perfect I do believe it shows a simple view of relative demand towards purchases and rentals. Before the crash we were seeing serious demand for purchases and now we are witnessing demand for rentals.  As mentioned in my last rental post, demand for rentals could not be higher in Greenwich.  I'm a big believer that this is due to the cyclical nature of everyone needing housing for their family before the school year combined with the lack of financing ability in those that wanted to buy, but couldn't.  Some agents don't agree with my strong belief in my school-time-demand - regardless, we are witnessing unprecedented demand in rentals right now. At some point it will even out with home values, which means either rental rates will come down or values will come back up.  If you know the answer, please tell me...

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