WatchMillions of homes have been bought the last few years with the intent of renting them out. The rental bubble is bursting. Soon, real estate prices will also crash as investor returns are no longer a certain. The banks may regret not foreclosing while the market had a deadcat bounce.
http://www.nytimes.com/2009/02/01/realestate/01cov.html?_r=1
"......it’s a good time to be a renter in New York City. Prices are falling, primarily in Manhattan, and concessions like a month of free rent are widespread........"
http://www.eagletribune.com/latestnews/x748660882/Rent-prices-dropping-in-Southern-N-H/print
"....Median gross rental costs in Rockingham County for a two-bedroom unit are below $1,200 for the first time in three years and at their lowest level in five years, according to a recent survey from the University of New Hampshire and the New Hampshire Housing Finance Authority.."
http://www.rentcafe.com/blog/cities/chicago-il/rent-in-chicago
"......Rents are coming down in popular neighborhoods such as the Gold Coast (-13%), River North (-7%), and Streeterville (-4%) as compared to the fourth quarter of 2011........"
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47 male
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Cheeseus Sonofdog says
California treats all real estate the same as it does owner occupied. Property tax increases are limited to 2% forever. Landlords do not pay any higher fees.
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Cheeseus Sonofdog says
Yes, I parking my car on the lawn from day one. Took the wheels off too. I have an engine block next to the ratty old boat and the hedges have taken advantage of my laziness. I really like parking my old camper, work truck and many cars on the corner so drivers can't see around the corner. The collisions are far more entertaining than TV.
Oh wait, that's my owner neighbor...
Don't be hating on renters. We're not all bad.
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Mountain View, CA
bmwman91's website
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Cheeseus Sonofdog says
You can't be serious.
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Of course I'm joking. I mean, when a newly married couple is looking to buy a home, they insist the realtor takes them to the area of town with the most renters, right? And renters add so much value that rental areas are priced way more than residential. Apertment complexes have almost no crime compared to the quiet residental street, right?.....
Most renters are fine people. Its the 20% which ruins things and prices, crime statistics and schools near them reflect it.
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Cheeseus Sonofdog says
Florida has homestead exemption but they make no distinction between those that use it as a 2nd home and those that rent them out as income producing.
It's not that they pay more, but those that get HE pay less.
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There isn't any way that the rental market could become a bubble.LMAO
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Florida has a homestead exemption but you have to have a current state ID to apply for it. Change your drivers license.
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I live in Florida. You can only claim homestead exemption for your primary house. Sure, you can rent it out, but the county does check and you lose your exemption if they find out you are not living there. Those with HE have their future tax asessed values capped at 3% per year. During the bubble, we had many properties increase 400% within five years. So, if you had HE your tax bill didn't go up much. But if you happened to rent that property, you saw your taxes triple.
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Why is this 2009 article on RENTS trending at all? The stock market was at 6000 in March 2009.. We were in the middle of a financial market crash.. of course rents were low!
Are bears really desperate enough to point to 2009 articles for confirmation rents are heading lower in 2012?
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Are housing pimps desperate enough to lie to the public about housing when rents are headed lower in;
Denver (-8.8%)
Chicago (-4.8%)
Los Angeles (-2.6%)
http://newsroom.transunion.com/MediaLibraries/TransUnion/Documents/graphics/1Q12/Q1-2012_SolutionsReport.pdf
you lying bastards.
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Re: 2009. The first post in this thread mentioned it and I already answered. I didn't check the date and relied on Google filtering articles from just the last month.
The stock market has risen by 100% since 2009. It rose on the excuses of "v shaped bottom", "green shoots", "recession is over". Looking back, that rally was 100% wrong. The federal reserve just told us things will suck until at least 2015. With interest rates this low, I would argue the bears are correct. Can you support a bull market in real estate and rents under these fundamentals?
Since you mentioned 2009, I will also mention that most of the new construction since then has been in apartments. Bulls want us to think once the deadbeats are kicked out due to foreclosure they will have to re-rent the very home they lost. Nope. They will have plenty of choices. From new apartments, to millions of novice landlords who are buying foreclosures thinking they will get rich renting them out. Supply and demand. Loads of rental supply coming....
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Cheeseus Sonofdog says
This isn't very impressive:
http://research.stlouisfed.org/fred2/graph/?s[1][id]=HOUST5F
...and this is simply shut down. If you expect the housing crash to continue, you better take a good look at this graph:
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iwog says
Yep, if that chart doesn't SCREAM recovery..... nothing does!!! Housing Starts are at the lowest level since records were kept, the future looks booming!!!
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Realtors® Are Filthy Liars says
Ahem, so what?
This is a Bay Area Centric website. Patrick got frustrated with how Different It Is Here, so he made the website.
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Call it Crazy says
So basically y'all want to hit me with both sides:
Cheeseus: New apartment construction is going to cause falling demand.
Call it Crazy: The total lack of new home construction is an indication of falling demand.
See how it works? There will be no greater truth determined when you decide on your conclusion first, then interpret the data to fit.
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Realtors Are Filthy Liars says
You are already inheriting our SF Bay Area high tech jobs... other states are booming benefiting from higher costs in CA.
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No one talks about how Gen Y/ The Millenial generation approx 1982-2001 is much larger than the baby boomer generation. So those that think there will be an oversupply of housing is just wrong. Maybe some surburban tracts will be demolished out far from work centers... But the millenial generation will keep rents high until they absorb boomer housing at their death rate or better with ease.
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B.A.C.A.H. says
You may want it to be.... but it's not.
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BoomAndBustCycle says
And how will they will be able to pay for their expensive houses? Their wages are low and anyone with a higher education will be straddled with debt. Their parents are likely tapped out. Do they have the ability to actually buy houses or will they be a generation of low income renters?
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Massive Housing Inventory says
I rented in Denver in Q2 2012 and my experience does not jibe with a 8.8% decrease in rents. The market was tight and rents were increasing. I was restricting myself to a relatively small area, but every indication I had was that rents in general had increased and were still increasing.
I don't buy it.
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"Yep, if that chart doesn't SCREAM recovery..... nothing does!!! Starts at the lowest level since records were kept, the future looks booming!!!"
LOL, too funny... that chart... LMAO The duck has been plucked!
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That is disgusting. Not only do you negative nancys have no fantasy world of riches to turn into reality you also have NO CONCEPT OF DECENCY. My god man how can you post a picture like that… its… its… simply HORRIBLE. How would you like me to start posting pictures of hanging naked humans??? As for this topic its irrelevant, no matter how low rents fall you will still be a landlord TYCOOOOOOON. As rents fall simply buy more and more houses. Tre Simple!!! KACHINGCHING
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duckhead says
Genius. Comedy gold.
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duckhead says
That's Chick-fil-A!
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Scottsdale, AZ
robertoaribas's website
apocolypsefuck is still winning in my book, but duckhead is in a strong second position for the main reasons to read this site!
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During the US bubble, many said “Prices only go up…” because of X, Y and Z reasons.
Now that the buble popped, many of the (newer) regulars around here say “Prices only go down.” Because of X, Y and Z reasons.
The truth is almost always somewhere in-between.
For what it’s, all of my metrics indicate that prices have more or less bottomed. History will prove if I’m right or wrong (not that I care too much about being right). But please people, lets be rational. 1960’s prices… I don’t see that happening.
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robertoaribas says
I still get a chuckle out of Bazingachoochoo, whatever that means.
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Yep. Rents are falling. Only cheese prices are rising.
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robertoaribas says
It's the best screen name by far and that alone qualifies to be on every possible blog. When I am zoning off in the morning before work watching my stocks go up for no reason I get that blank stare and in those minutes I try to figure out what this screen name could possibly mean and how Shostakovich is connected to the apocalypse. This goes even deeper than picking the daily winner of computer generated spam email subjects and beats any politician's, banker's, lawyer's, real estate agent's or Keynesian economist's dribble of the day. Dow to 50K, long printing presses and mortgages!
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mell says
Shostakovich was a proponent of subsistence farming. He loved tubers in all shapes, sizes and varieties.
We know how fond AF is of this skill. He is merely honoring his philosophical mentor.
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Median Rental Rate Tumbles 14% In Downtown West Palm Beach In 2012
The demand for rental units in the Downtown West Palm Beach / Palm Beach Island coastal market decreased even as the median monthly lease price tumbled to less than $1.35 per square foot in 2012 from about $1.55 per square foot in the same period in 2011 and more than $1.65 per square foot in 2010, according to the report.
http://www.condovultures.com/News/ViewArticle/tabid/77/ArticleId/106638/Median-Rental-Rate-Tumbles-14-In-Downtown-West-Palm-Beach-In-2012.aspx
Median rents on a per-square-foot basis, meanwhile, dropped 3 percent in February from a year earlier after climbing 1.5 percent in the 12 months through February 2012 and 3 percent a year earlier, according to Fletcher Wilcox, a real estate analyst at Grand Canyon Title Agency in Phoenix.
......while Las Vegas rents fell 4.1 percent to a median 70 cents a square foot over the same timeframe, according to RentRange LLC.........
http://www.bloomberg.com/news/2013-03-18/rent-gains-trail-as-blackstone-crowds-u-s-with-homes.html
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Not in the bay area at least rents have not dropped in Mountain View, Sunnyvale or Santa Clara yet.
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CaptainShuddup says
Many dont realize that rental incomes under reported to the IRS since they lack a well documented audit trail like W-2s and 1099s.
Tax revenues from Rental Income would spike if one was to give a credit to renters.. as long as they report total payments made to landlords. Would bring in 100s of Billions in taxes. Everthing from Room Rentals to SFH rentals... there is alot of room for improvements.
Trust but verify...
IRS looks to cut rental tax losses
Thursday, March 10, 2011
The Internal Revenue Service needs to keep a closer eye on landlords. They apparently are not reporting all their income.
That's the word from the Treasury Inspector General for Tax Administration, or TIGTA, the federal office that keeps tabs on the IRS. TIGTA recently looked more closely at rental activity and its associated tax revenue because in August 2008, the Government Accountability Office reported that more than half of taxpayers with rental real estate activity in 2001 misreported their income and losses to the tune of $12.4 billion.
So what did TIGTA's follow-up find? That the IRS is indeed leaving lots of rental tax money uncollected.
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San Jose, CA
35% rise in prices plus unsustainable rent rate may make Phoenix “scratching head” for money managers think that maybe is a time to take profits.
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San Jose, CA
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REpro says
@REpro,
So when do you think it's time to take some chips off the table for the Bay Area? :)
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Scottsdale, AZ
robertoaribas's website
REpro says
I am seeing this... doesn't bother me at all. I have 3 homes in one area, where rents have been under pressure for the past 2 years, probably down $100 a month average...
2 years ago, there was a constant flood of bank owned and short sale homes... (which is why I bought mine as cheap as I did). Today, there is barely a trickle... I bought at 80K, 76K, 46K all single family homes with garages, rent the best one for 1100, the worst for 900 now.
Today, going prices are more like 120 to 150K...
All of the new listings are people like me, who bought in 2009 for much lower prices, and I guess are taking their 30k or 40K in equity and getting out...
Here is my thinking:
1. as they sell these days, that tends to take one rental out of the market. I am not seeing near as many rental listings any more, and over the past six months, prices have increased a bit.
2. this is a finite process. Yes, for several years, people got homes cheap in this area, but even if all of them sold out, it will just be a few years until that too ends.
3. There is one new builder in the area, who got 180 finished lots for a song out of foreclosure. he is selling those too, but that too shall end.
unless prices really fly up, I'm going to stay pat, and hold on. Every single factor keeping prices from increasing is a finite one, and will end in the future. A new builder without nearly free lots would be starting at 180K+, so I'm going to wait until the values are north of 150K on the worst one before I even think of selling.
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thomaswong.1986 says
Will they listen if tenant calls in to report his landlord?
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San Jose, CA
E-man says
It’s not about when, but how to detect right time.
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robertoaribas says
Don't forget the raving feuds of Roberto!
Patnet is entertaining AND informative.
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robertoaribas says
Excellent analysis. You really seem to know Phoenix.
And not a single word of profanity.