patrick.net

Call it Crazy says

I would try and explain it to you, but I don't believe you have the mental capability to understand... which is proven by your insightful responses to posts.

lol--nice cop out.

Call it Crazy says

When they come out with the new mini-pad, will it have dual uses???

Triple. Here is another one:

http://www.youtube.com/embed/XcIwXVKQjsQ

Call it Crazy says

It becomes taking personal responsibility for what contract you sign and having the ability to use a calculator, which are both lacking from today's "sheep"!!! You can't blame the gov't. for that.....

So, people who waited to buy until after the housing bubble popped, until prices reached a level below rental parity, and then bought are sheep? Really?

Or is this another one of those areas that "I don't have the mental capacity to understand"? Funny how you can't ever post the explanation. I'm sure you have one though...lol.

Call it Crazy says

tatupu70 says

Or is this another one of those areas that "I don't have the mental capacity to understand"?

Yep

Got it. Another well supported and well thought out post from Crazy.

Call it Crazy says

I don't see how the gov't. can meddle in the rental market, most of it is just local supply and demand and what the landlord needs to cover his monthly nut.

Again, when you are talking about supply and demand, you are assuming that this is a free market. In reality, this is not a free market at all, but a market heavily rigged and manipulated by the banksters and the central planners. These entities manipulate the markets, by rigging the mortgage rates and credit available to the landlords, which, ultimately affects the rental rates.

Housing prices drop for 2 years straight, and bulls claim "the market is flat." Housing prices rise for 3 months, and the same people claim "recovery."

If that's not bull euphoria prepping for a bull trap, I'm not sure what is.

This is for the SF bay area: There is some significant demand for the lower end rental market as people cannot afford to buy or decide not to do so and because the Fed has made it very easy for the high end renters to jack up the rents and wait for someone rich (and careless) enough to pay that much by keeping the interest rates super depressed. If you can roll over your debt almost indefinitely for less interest than inflation, you somewhat have the luxury to charge whatever you want. This has nothing to do with a recovery, as soon as interest rates will recover to normal - and eventually they will - these distortions will correct. Meanwhile funding for companies that haven't been profitable for a while is drying up rapidly again, look for layoffs and a generally weak job market. There will be no end to the housing inventory glut and a steady supply of foreclosures. Also the recent municipal bankruptcies seem to indicate more downturn than recovery and more will follow. You don't have to kill yourself, just be careful with regarding "housing" as an investment - I cannot see any reason for prices to go up.

Call it Crazy says

I'm trying to learn from you on how to make useless posts.... but it's real tough.

At least you're trying to learn. It's a start.

Call it Crazy says

Are we talking about SFH's or multi-unit apartment units? Aren't the majority of rentals single family units? How are landlords of these units getting "rigged mortgages" that are different than the standard home owner?

Landlors are getting the same mortgages as everyone else. It's just that the interest rates, themselves are "artificially" low, which makes it easier for landlords to charge more (see mell's response, above).

dunnross says

Landlors are getting the same mortgages as everyone else. It's just that the interest rates, themselves are "artificially" low, which makes it easier for landlords to charge more (see mell's response, above).

How exactly do low interest rates allow landlords to charge more? Mells repsonse made even less sense than yours. Rent is driven by supply and demand. And, if anything, low interest rates will push more people to buy rather than rent so you'll have to lower rents (as Crazy says).

tatupu70 says

Mells repsonse made even less sense than yours. Rent is driven by supply and demand.

Mell's response made a lot of sense. Looking at rental listings on craig's list, and I am seeing landlords asking crazy rents for absolutely ordinary looking houses:

http://sfbay.craigslist.org/sby/apa/3116823494.html $6000 for a 2 car garage???
http://sfbay.craigslist.org/sby/apa/3135055874.html $7000 for a row house???
http://sfbay.craigslist.org/sby/apa/3138405340.html $6300 for 2800sq ft???

Who can afford to rent these places? Some of these houses have been on the market forever. It's pretty obvious that these landlords are waiting for someone rich and stupid to show up.

dunnross says

Who can afford to rent these places? Some of these houses have been on the market forever. It's pretty obvious that these landlords are waiting for someone rich and stupid to show up.

Sure. How does that have anything to do with low interest rates? Wouldn't a rich person be more likely to buy with such low rates?

tatupu70 says

How does that have anything to do with low interest rates?

Low interest rates allow the landlord to sit on the property for a long time, since their mortgage is low. A lot of rich people rent because renting provides the mobility which buying doesn't and also frees up capital for other investments.

dunnross says

Low interest rates allow the landlord to sit on the property for a long time, since their mortgage is low.

Landlords will maxmize income by pricing their rental so it is occupied. It will be impossible for the landlord to make up for a few months vacant by charging higher rents.

dunnross says

A lot of rich people rent because renting provides the mobility which buying doesn't and also frees up capital for other investments

Maybe that is true, but rich people don't get rich by paying over market rents.

Call it Crazy says

With the lower interest rates, I'm actually considering buying again. Even though I'm OK with renting, the lower rates makes it very tempting to jump back into the fire as an owner...

Twice in one day--I saw the same thing when I was out there. That's what pushed me to look to buy because it was significantly cheaper than renting where I was looking. You have the extra maintenance costs but the savings from principal payback (at these rates, it's actually significant) and tax savings.

Prices may continue to go down--but with rents so high, I think the downside is somewhat limited.

Obviously if rents start falling, then my analysis is completely moot.

The low interest rates do not benefit everyone equally. If you already have a lot of money and collateral you can borrow more, most ordinary people at this point do not qualify for big loans to buy a house and you don't get loans to pay your rent - except for using your credit card at horrible rates maybe ;) I agree on an increased demand for rent, but it comes solely from the combo of people not being able to afford to buy a house and (usually wealthy) landlords and corporations not needing full tenancy due to the depressed interest rates. Sure you could try and take advantage of this if you have enough income/collateral and buy a house to rent out, but IMO it is a huge risk as the people who are now paying those jacked up rents are living paycheck to paycheck right now.

tatupu70 says

dunnross says

What's still keeping this market together are super low interest rates, and low DP FHA loans, not to mention corruption and deceptions

Is that what's making rents rise too?

You shouldn't assume they are rising. In our area they've been falling every year so far, and so have the housing prices.

Now I don't know about your area, might be different.

FortWayne says

You shouldn't assume they are rising. In our area they've been falling every year so far, and so have the housing prices.

I'm speaking in general. Obviously, it's not true for every area.

robertoaribas says

rent prices are set by supply and demand of rentals. PERIOD. whether or not the landlord has a huge mortgage has nothing to do with the price he/she can charge. You've been on this board forever, you'd think you 'd know what a clever high school student of economics knows by now...

It does beg the question though, where is the rent money coming from? So many people have been living paycheck to paycheck for decades already, or worse on HELOC money. The unemployment rate is still high.

What are renters doing now to squeeze out more rent that they were not doing before?

Yikes, how can speculation on future price movements turn into personal attacks?

Bulls, place your bets.

Bears, place your bets.

Only time will tell who is correct. The future is unknown.

wthrfrk80 says

Yikes, how can speculation on future price movements turn into personal attacks?

Something I never understood.

"You're a moron."

"You are a high school student!"

"I'm calling you out on your perma-bear BS!"

... and nothing was ever accomplished.

robertoaribas says

"Home for rent, $4000 a month. Yes, you can rent the same home across the street for $3000, but I have a high mortgage to pay, hence the rent I am asking. Thanks in advance!"

Do you take pets?

Government is a big renter and leaser, through welfare especially.

Call it Crazy says

dunnross says

dunnross says

o you know of any individual that was forced to sign mortgage papers almost against their own will, or are you A$$uming?

Well, would you deny that the guberment's meddling in the rental market, forcing rents up, is driving people to sign mortgage papers?

I don't see how the gov't. can meddle in the rental market, most of it is just local supply and demand and what the landlord needs to cover his monthly nut.

Also, no one is "forced" to sign a mortgage by the gov't. The gov't. just has made it real easy for the "sheep" to take out a 3.5% FHA mortgage, only to get "sheared" later when they go underwater.

It becomes taking personal responsibility for what contract you sign and having the ability to use a calculator, which are both lacking from today's "sheep"!!! You can't blame the gov't. for that.....