As part of my exercise program, I want through many Long Beach, California neighborhoods close to where I live.  In my walks, I’m always observant of signs, real estate related signs that is.  And recently, I’ve been seeing more and more.

Before you jump ahead and assume I mean that more homes are for sale, let me tell you that I’m seeing a different kind of sign - for rent.  That’s right, many people are moving, and that can only mean one thing - they are downsizing their rents.

I talked with a friend who owns many rental properties in the area and she confirmed that there’s a lot of downward pressure on rents.  People are moving out of 3 bedroom apartments into 2 bedroom apartments, or even doubling up with multiple families in one apartment.

In these economic times, it is necessary to get creative in order to survive.  What this means for the real estate market is that there is another element of pressure on prices.

Obviously, for rental property if the rent goes down the price goes down, but the trend extends beyond that.  It gets down to the cost of housing.  If rents are dropping, and that is what happens when there are a lot of rentals available, the law of supply and demand assures that result, then the cost of housing is dropping and the relative cost of home ownership is rising.  And that creates yet another downward pressure on home prices.