wont rents decrease soon

[Brian Campbell]

isn't it safe to assume while putting deals together for buy and hold that rents will decrease from current highs. In my area rents are 1250 for 3bd/2bth, which was acceptable when homes were 350K, but with homes now at 100k those rents will be 1.25 % of market value and with homes expected to drop (and in some cases already have) to 80K current rents would be 1.5 %.

In my recent readings, rents should be about .8 % of market value. When figuring rent comps today, shouldn't we be figuring the adjustments going on right now?

My other thought was; people have been paying this for years and can still afford it, wages aren't going down (although unemployment is rising), so perhaps they are stable.

Then again, new investors will be buying cheaper and undercutting current rent prices (or will they) driving down the rent. I can't figure this one out and need some expert advice from those that have been doing this a long time.