Dave:
Does that mean you think rents have further to fall?
Lu:
Dave, don’t get me into that loophole.
Dave:
I’m trying to fall along here.
Lu:
I was always following your direction. No, the rent is not falling yet and as a matter effect,
If we look at a quarter over quarter run growth and there are certainly seasonality baked in, right? So right now as we speak, we are in this peak renting season. We are seeing the quarterly rate has been slowly but steadily growing up. The reason there is a very strong reason behind it is because the demand hasn’t showing any cracks. Although the supply has been easing a little bit since the beginning of the year. We talk about the construction boom, but that pressure has been slowly but steadily easing because the housing permits and start has been falling from its peak in 2022. So the supply easing is coming, but on the other hand, this is the encouraging sign for having investors who’s listening to our podcast is the demand factor hasn’t really faltered.
If you look at the unemployment situation, looking at the labor supply and demand and looking at the wage growth, so looking at the population growth in the short run, we are seeing the main supporting factors for the demographics are still here. And that’s the reason we are seeing the rent is not falling and it’s actually slightly but steadily accelerating a little bit very marginal. But the quarterly run growth has been eking up. So that pool, the year over year run growth from low 1% into the higher one percentage range. So that is the encouraging somehow, however, because the demand hasn’t really been catching up as strongly as we would expect, so it’s steady but isn’t as we would predict in the first quarter, we have to lower our outlook for the run growth for the year. So we were at 2.5% year over year run growth for the entire year of 2025. I haven’t got our out of box number. So this is my personal bet and whenever I bet it’s most likely I’m going to lose the bet anyway, but I’m expecting it’s going to slightly trillion below 2.5% on a year over year basis. And that’s at the national
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