I’m apartment hunting right now, and the broker I talked to yesterday is clearly no economist (despite claiming to have been a business finance major in college).
We where talking about how apartment owners overcharge for rent in New York City. He said something along the lines that it was ridiculous that with the housing market what it is, that landlords could justify such a high rent.
What the broker missed was that the part of the housing market that collapsed is the demand for mortgages. That is, owning homes. If fewer people are owning homes, that means more people should be renting. This drives prices up, not down, like my broker thought.
This may be less true for certain markets in New York, where Wall Street and finance people are left in droves. But, I’m not looking at these high rise condos anyway.