Market Rent Increase

[Kyle Majors]

Hey BP, 

I recently thought about how residential home prices increase. Homes are priced with the current market and over time, as demand increases, home prices are bid up. On the other side, as demand decreases, home values have to be dropped by the owner setting/accepting a lower offer. 

In the rental world, how do rental prices increase if this bidding situation doesn't occur? My guess was that landlords look at the trend of demand in an area through various reports and arbitrarily set new prices. I've thought about comps, but eventually there has to be a jump from the current comp price and I'd like to know how this process works and how those higher prices are achieved. 

Thanks!

Kyle