My wife and I rented since 1998 and not only have rents been flat in the Seattle area since then, but they actually have been going down the last couple of years.
My son was paying $1100 a month and when it was time to renew his lease last year, they offered the same space to him for $800 a month if he would renew for a year. This was in a seattle suburb. My daughter lives in downtown and saw her rent go from $1100 to $700 for a studio. A lady I work with lives downtown and found the same situation. She has moved between downtown locations twice in the last three years, each time getting a better place, and each time for less money than the last place.
Deflation is real. It is happening right now. The question is, when will the inflation kick in? And how bad will it be?
It depends on what all of the banks do with those trillions of bail out bucks they got. If they put those into circulation instead of leaving them in their bank accounts to collect interest, we could have serious inflation.
It also depends on the Fed's reaction to deflation as well. If the Fed senses serious deflation and tries to keep prices high by flooding the market with even more dollars in order to head off inflation, it may miscalculate and put too many dollars into the economy. If that happens, you can expect hyperinflation. Also if other countries dump their dollars--otherwise known as "diversifying their investments"-- like China is doing, then there will be problems for the dollar as well. Chances are things will happen suddenly and that most Americans won't see it coming until it's too late.
It's not even a mystery question. We're copying Japan. Japan's had deflation for the past 21 straight years...so inflation is more than two decades away.
In the meantime: deflation. Act accordingly.