Searching for apartments in the LA area – there are 558 listings on zillow in westside LA under 2k$. Many are within blocks of each other, lots are units in the same building. With so much inventory, shouldn’t market forces cause some landlord to lower the rent? Does the economic theory of supply and demand not apply for the housing market?
In: Economics
No, because there isn’t a lot of competition, since many apartments are owned by corporate owners.
So a corporate owner with 1,000 apartments prefers to charge $200 more ($200,000) and have 5 apartments be empty than charge $200 less and have those 5 extra rents which would be only like $10,000.
Latest Answers