I have a 20 unit multifamily near the LA City College in LA (this is rent control but considered pretty desirable and not likely to severely crash in a decline).

However, the longer you hold the property a.) hopefully rents rise and b.) the percent of the mortgage going to interest declines.

http://www.chicagotribune.com/news/local/breaking/ct-illinois-population-decline-met-20161220-story.html

The SFRs also seem to appreciate at a better rate, while condos tend to be the last to appreciate and the first to decline in a bad market.  

If homes continue to decline in value, why would rents move in the opposite direction?

Right, our townhouse's value has declined over the past 5 years while we have owned it.

The market is great for buyers and I target those in established neighborhoods (1998-newer) within 20 minutes of where I live, since I rehab them, and do not foresee the rental market declining (military town). 2.)

You can see the steady groth up untill 3 years ago, the boom, then the huge decline in the number of houses sold, which has caused house prices to drop fast.

However, its actually quite competitive to acquire these properties, which I think will limit further declines.4) Declining vacancy rates.

And also since he declined the $114K offer, you guys think that I should of attempted to lease option the deal?