– how can rent be so high when there are so many listings? Shouldn’t competition drive it down?

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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

15 Answers

Anonymous 0 Comments

Some investment companies might accept a vacancy for a while as they can write off the loss at tax time. As long as their portfolio as a whole is making money all is good. I would bet most of the units in the same building are the same investment company, if they lower the rent on one then that might make the higher priced units a harder sell.

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