patrick.net

Where is this data from and how old is it? I live in Monterey and you have it listed at 527. It's nothing of the sort. $600,000 homes rent for around the $2500-3000 mark here.

Good stuff. I am glad I don't own in CA anymore. I can buy property in cheap places and rent it out and use that rent income to live wherever I want.

In Newport Beach, I'd guess that all the houses are mansions, and all the rentals are the small apartments that house the servants who work there (or the grocery store clerks who work at the Albertson's).

Bigsby says

Where is this data from and how old is it?

It's mostly from Craigslist from the last two years.

tclement says

In Newport Beach, I'd guess that all the houses are mansions, and all the rentals are the small apartments that house the servants who work there

Yes, that may be true. All I'm saying is that the average rent is very small there compared to the average price.

ptiemann says

if I understand it right, the 'average' does not even take bedroom count into consideration, right?

Right. Only group by was zip code. And then I consolidated all the zip codes with the same city name to get a single row for each city.

I could make a big table with multiple columns for BR as well, but would people read that one?

Anything I can do with the data you'd be willing to pay for, or that you think other people would pay for? Maybe real estate investors?

ptiemann says

Patrick, another data point to collect in your database would be the build date or date of last remodel. I am not sure where to scrape that though. Craig's list does not have it.

Just need to find it. I think counties have that.

Could I make a living just scraping all the county data and integrating it with Craigslist, HUD, census, FBI, school quality records? I'm not completely clear on who the customer would be though.

Bigsby says

Where is this data from and how old is it?

It's mostly from Craigslist from the last two years.

tclement says

In Newport Beach, I'd guess that all the houses are mansions, and all the rentals are the small apartments that house the servants who work there

Yes, that may be true. All I'm saying is that the average rent is very small there compared to the average price.

Actual experience says the figures are entirely inaccurate, at least for Monterey.

Bigsby says

Actual experience says the figures are entirely inaccurate, at least for Monterey.

The actual figures are straight off of Craigslist and you can see all of them if you subscribe for $7 per week:

http://patrick.net/housing/subscribe.php

Or just write an open house review for a free week of access:

http://patrick.net/includes/post-new.php?cat_ID=11

You can claim the prices and rents are not right, but then you'd be wrong. These are provably the actual advertised rents and prices and the service even shows you exact addresses and dates.

orbitron says

Why are people so dumb??? Why do people with more money keep ruining my plans of having a mansion in Malibu?

Great data point. So your argument to pay for an overinflated house is??? Because others people will, so you should also. That is the dumbest argument I have heard and I hear it over and over again. It is the thinking that creates bubbles. Are you not listening to the hiss that is coming out of this bubble now? Sorry if you are an owner and upset, there is more to come...

Bigsby says

Where is this data from and how old is it? I live in Monterey and you have it listed at 527. It's nothing of the sort. $600,000 homes rent for around the $2500-3000 mark here.

Slowly, so you don't get scared. Maybe even one at at time and probably start when it is dark. The left one first, every so slightly. It has been a while. Let the photons hit the iris. Let the brain adjust, the picture will be fuzzy at first. There you go, you got it. Now open a little wider, get your bearings. Good. Now star the right one. Ever so slowly. Remember the last time your tried too fast. Now you got it. Both of them opened. You are now able to get depth. Half-way there, all that fuzziness will go away soon. Do a small but slow blink to remove the dirt and water. I know it hurts, nothing good comes from things being easy. You are 3/4 of the way! Just the last little bit. WAIT, WAIT, don't close them. Damit, you were almost there. OPEN them up again. Don't put your hands over your ears. Don't run away. Damit, Damit, Damit!! Another one lost to the realtors.

Bigsby says

Where is this data from and how old is it?

It's mostly from Craigslist from the last two years.

The list is outdated because rents have shot up significantly. http://www.mercurynews.com/real-estate/ci_20416459/new-home-construction-pick-up-soon-report-suggests?source=autofeed#

hanera says

The list is outdated because rents have shot up significantly since Sep last year.

In general, no that is not true, rents have not shot up. Though of course reators lie about that all the time. They lie all day long, to test whether they can part fools and money easily.

Graph any zip code or city you want, here:

http://patrick.net/housing/graphs.php?uaddr=Monterey%2C+ca&v=rents

Though there probably are specific exceptions.

You can claim the prices and rents are not right, but then you'd be wrong. These are provably the actual advertised rents and prices and the service even shows you exact addresses and dates.

I think the problem is you're seemingly comparing apples and oranges. Trying to group by BRs, age, or other data would help, but ultimately you almost need to sort out rent and sales price for the SAME house for the data to have real meaning.

Graph any zip code or city you want, here:

http://patrick.net/housing/graphs.php?uaddr=Monterey%2C+ca&v=rents

Using the calculator, number of months for Cupertino is 388 whereas the graph indicated 478.

It's interesting. I see that a house is more "expensive" in Monterey, although the median price is lower than Santa Cruz.
The above numbers may also indicate how rent relates to the local situation, i.e. Santa Cruz has a hot rental market compared to Monterey. The University and thousands of (ready?) illegals have kept the rental market quite saturated.
So, rents may be relatively lower in Monterey, the houses are cheaper, but you'd not guess that from the numbers.

Sure, I could parse the data in other ways, but I'm pretty sure it will show the exact same thing: rich areas are bad to buy in, being very overpriced relative to renting the same thing, poor areas are good to buy in, being underpriced relative to renting the same thing. It's rare to find an exact same house that is both for rent and for sale recently.

There is no parsing of the data that will ever convince people who have decided to buy that they are making a mistake. It's religion for them, not science. They need to believe, because otherwise it's too painful to see how badly they're getting screwed.

hanera says

Bigsby says

Where is this data from and how old is it?

It's mostly from Craigslist from the last two years.

The list is outdated because rents have shot up significantly. http://www.mercurynews.com/real-estate/ci_20416459/new-home-construction-pick-up-soon-report-suggests?source=autofeed#

Yup, that is why I pay less now than in 1997. Incredible the rent increases! Mercury news has posted nothing but realtor gospel since the crash. Horrible place to look for anything close to the truth. When you clock on that link you provided, take a big guess what advertisement pops up in the body of the text? Amazingly an add from a "new home" builder. No conflict of interest there. Come one people, wise up.

Also, if you want to get real current with new construction then check out the new results from today. So much for a pick-up-soon.

http://www.calculatedriskblog.com/2012/04/housing-starts-decline-in-march.html

Bigsby says

Actual experience says the figures are entirely inaccurate, at least for Monterey.

The actual figures are straight off of Craigslist and you can see all of them if you subscribe for $7 per week:

http://patrick.net/housing/subscribe.php

Or just write an open house review for a free week of access:

http://patrick.net/includes/post-new.php?cat_ID=11

You can claim the prices and rents are not right, but then you'd be wrong. These are provably the actual advertised rents and prices and the service even shows you exact addresses and dates.

I'm not wrong. Saying that average house prices equate to 527 months of average rent in Monterey is just ridiculous. A cursory glance at sale prices and rents for equivalent properties makes that perfectly clear. My home is here, so I actually know.

Bigsby says

I'm not wrong. Saying that average house prices equate to 527 months of average rent in Monterey is just ridiculous. A cursory glance at sale prices and rents for equivalent properties makes that perfectly clear. My home is here, so I actually know.

Oh, you live there. Wow. That makes everything you say gospel then. Why not do the work like Patrick is doing and back up your claims with real data. Huh? You don't have any, you just like to look at your house and the neighbors and then go around saying all kinds of wild accusations. Oh, then I take it back, I believe you now. ;)

RentingForHalfTheCost says

Slowly, so you don't get scared. Maybe even one at at time and probably start when it is dark. The left one first, every so slightly. It has been a while. Let the photons hit the iris. Let the brain adjust, the picture will be fuzzy at first. There you go, you got it. Now open a little wider, get your bearings. Good. Now star the right one. Ever so slowly. Remember the last time your tried too fast. Now you got it. Both of them opened. You are now able to get depth. Half-way there, all that fuzziness will go away soon. Do a small but slow blink to remove the dirt and water. I know it hurts, nothing good comes from things being easy. You are 3/4 of the way! Just the last little bit. WAIT, WAIT, don't close them. Damit, you were almost there. OPEN them up again. Don't put your hands over your ears. Don't run away. Damit, Damit, Damit!! Another one lost to the realtors.

Don't be daft. I'm stating my view based on real life experience. Good 3 bed/2 bath houses in Monterey with a nice view of the bay go for somewhere in the region of $500 to 600K. These houses do NOT rent for $1000 a month. That is just a fact.

Bigsby says

Don't be daft. I'm stating my view based on real life experience. Good 3 bed/2 bath houses in Monterey with a nice view of the bay go for somewhere in the region of $500 to 600K. These houses do NOT rent for $1000 a month. That is just a fact.

Your fact. Show the data like Patrick is doing. He has the data, you have your thoughts. No contest. What you are doing is daft.

Also, I wouldn't mind picking up on of your 500K 3/2 with a nice view. Just a quick check on motovo gets me no such house. Maybe they are valued a little higher than you think?

RentingForHalfTheCost says

Bigsby says

I'm not wrong. Saying that average house prices equate to 527 months of average rent in Monterey is just ridiculous. A cursory glance at sale prices and rents for equivalent properties makes that perfectly clear. My home is here, so I actually know.

Oh, you live there. Wow. That makes everything you say gospel then. Why not do the work like Patrick is doing and back up your claims with real data. Huh? You don't have any, you just like to look at your house and the neighbors and then go around saying all kinds of wild accusations. Oh, then I take it back, I believe you now. ;)

No need to get your knickers in a twist. Just look at MLS listings and sales and then the equivalent rents for such properties. It is nowhere near 527. Nowhere near.

RentingForHalfTheCost says

Bigsby says

Don't be daft. I'm stating my view based on real life experience. Good 3 bed/2 bath houses in Monterey with a nice view of the bay go for somewhere in the region of $500 to 600K. These houses do NOT rent for $1000 a month. That is just a fact.

Your fact. Show the data like Patrick is doing. He has the data, you have your thoughts. No contest. What you are doing is daft.

Are you seriously saying to me that the Monterey houses that sold for the median price for March of 438K rent for $831? They don't.

Bigsby says

RentingForHalfTheCost says

Bigsby says

Don't be daft. I'm stating my view based on real life experience. Good 3 bed/2 bath houses in Monterey with a nice view of the bay go for somewhere in the region of $500 to 600K. These houses do NOT rent for $1000 a month. That is just a fact.

Your fact. Show the data like Patrick is doing. He has the data, you have your thoughts. No contest. What you are doing is daft.

Are you seriously saying to me that the Monterey houses that sold for the median price for March of 438K rent for $831? They don't.

A quick search in Monterey gets me no 500K 3/2 with a nice view. I guess you mean on the foreclosure steps.

Bigsby says

No need to get your knickers in a twist. Just look at MLS listings and sales and then the equivalent rents for such properties. It is nowhere near 527. Nowhere near.

Again, no data to back up your claims. You talk like you have data like Patrick's table, but I don't see any. I am just suppose to believe I guess. You a minister?

RentingForHalfTheCost says

Bigsby says

Don't be daft. I'm stating my view based on real life experience. Good 3 bed/2 bath houses in Monterey with a nice view of the bay go for somewhere in the region of $500 to 600K. These houses do NOT rent for $1000 a month. That is just a fact.

Your fact. Show the data like Patrick is doing. He has the data, you have your thoughts. No contest. What you are doing is daft.

Also, I wouldn't mind picking up on of your 500K 3/2 with a nice view. Just a quick check on motovo gets me no such house. Maybe they are valued a little higher than you think?

That's strange seeing as I just bought such a house a few months ago in Monte Vista with a sweeping view of the bay for the mid-500s. The house was being rented out for just shy of $3k before we moved in. Let me just get my calculator...

RentingForHalfTheCost says

Bigsby says

No need to get your knickers in a twist. Just look at MLS listings and sales and then the equivalent rents for such properties. It is nowhere near 527. Nowhere near.

Again, no data to back up your claims. You talk like you have data like Patrick's table, but I don't see any. I am just suppose to believe I guess. You a minister?

Go to Craigslist and show me say a 1600 sq ft house in 93940 that is renting for $1000. They don't exist. I do see a centrally located APARTMENT listed for $1600 though. A whole 1 bedroom and 1 bathroom with 800sq ft of glorious living. Oh, sorry, there is a property listed in the sub 1k range. That beauty is a whopping 390sq ft and a mere $995.

Bigsby says

That's strange seeing as I just bought such a house a few months ago in Monte Vista with a sweeping view of the bay for the mid-500s. The house was being rented out for just shy of $3k before we moved in. Let me just get my calculator...

1 data point with an obvious bias view of how good a deal you got verses 1000's of data point over multiple years. Again, no contest.

RentingForHalfTheCost says

Bigsby says

That's strange seeing as I just bought such a house a few months ago in Monte Vista with a sweeping view of the bay for the mid-500s. The house was being rented out for just shy of $3k before we moved in. Let me just get my calculator...

1 data point with an obvious bias view of how good a deal you got verses 1000's of data point over multiple years. Again, no contest.

I didn't get an especially good deal. It was a reasonable price at the time, but little different to comparable houses. Look at Craigslist and then look at current MLS listings for 93940 and then tell me that you think 527 is remotely accurate or would you rather believe Patrick than your own eyes?

Bigsby says

RentingForHalfTheCost says

Bigsby says

That's strange seeing as I just bought such a house a few months ago in Monte Vista with a sweeping view of the bay for the mid-500s. The house was being rented out for just shy of $3k before we moved in. Let me just get my calculator...

1 data point with an obvious bias view of how good a deal you got verses 1000's of data point over multiple years. Again, no contest.

I didn't get an especially good deal. It was a reasonable price at the time, but little different to comparable houses.

Some data just from today's craigslist. Lots of 3/2 rentals under 1500/mth.

http://monterey.craigslist.org/apa/2961763346.html

Whoever lived in your mid-500k home and was paying 3k/mth wasn't really getting a good deal.

RentingForHalfTheCost says

Some data just from today's craigslist. Lots of 3/2 rentals under 1500/mth.

http://monterey.craigslist.org/apa/2961763346.html

Whoever lived in your mid-500k home and was paying 3k/mth wasn't really getting a good deal.

Err, and there are plenty for a lot more:

http://monterey.craigslist.org/search/apa?query=93940&srchType=A&minAsk=&maxAsk=&bedrooms=

The house you just listed on Soledad would likely sell for around the 400-450k mark depending on condition (or quite probably less given the rental price). That's not 527 times $1500.

Bigsby says

Are you seriously saying to me that the Monterey houses that sold for the median price for March of 438K rent for $831?

No, I'm just saying that the average price in Monterey (for all places for sale) divided by the average rent in Monterey (for all rentals) came out to 527.

Bigsby says

Are you seriously saying to me that the Monterey houses that sold for the median price for March of 438K rent for $831?

No, I'm just saying that the average price in Monterey (for all places for sale) divided by the average rent in Monterey (for all rentals) came out to 527.

Well then the data doesn't reflect the reality of the price to rent differential in the area. A figure more like half the one you mention would probably be closer to the actual current purchase vs rental costs.

But it does reflect the reality that you can rent much more cheaply than you can buy in Monterey. Maybe not the same thing, but even if I could adjust for size and quality of rental to make them the same as houses, the list would come out in exactly the same order.

The worst deals for buyers are in the most expensive places, like Monterey.

Think of it this way: can you buy the average place in Monterey, rent it out, and make a profit? The median price seems to be about $584,550:

http://patrick.net/housing/graphs.php?uaddr=Monterey%2C+ca

You'd have to rent it for about $3,965 just to break even:

http://patrick.net/housing/calculator.php?uaddr=Monterey%2C+&rent=3%2C965&price=584%2C550

Can you get that much rent for that average house?

I'm not saying the houses represent good value. I'm saying that they don't represent anywhere near as poor value as the 527 figure suggests. It's an attractive and typically overpriced coastal city, but it is certainly not in Palo Alto's league for sky high purchase to rental prices.

orbitron says

Patrick, you keep saying that over and over, but the idea that there is some cosmic law that demands that housing in any particular area must have a price such that renting it out is profitable is obviously untrue.

What I'm saying is only that you lose much more money owning than renting the same thing in those areas.

It's your choice whether or not to burn great piles of money for the intangible feeling of ownership while living in the same quality house that you would as a renter.

I do also think the price to rent ratio has gotten further out of whack lately, but I don't have good historical data to prove that. Only data to prove that it is an exceptionally bad deal to own in San Francisco or Santa Clara.

A good thought experiment: would you accept $3,000 a month to be called a renter, with no other change in lifestyle? Seems like pretty easy money to me.

be called a renter

My GOD, what WOULD the Jones family think of us!

A good thought experiment: would you accept $3,000 a month to be called a renter, with no other change in lifestyle? Seems like pretty easy money to me.

I sure as hell would.

bmwman91 says

My GOD, what WOULD the Jones family think of us!

Yes I think that's the real issue.

A good thought experiment: would you accept $3,000 a month to be called a renter, with no other change in lifestyle? Seems like pretty easy money to me.

What if you have to move every few years? If you have kids this can be a real drag. Plus moving is a big, expensive hassle.

I agree with you in theory, but there is a value in ownership that you are not recognizing - stability. Of course, I'm not suggesting stupid purchases, but I do think paying a bit more to own is worth it. Right now, there are a lot of homes in the BA that fit that requirement.

rowemoore says

What if you have to move every few years? If you have kids this can be a real drag. Plus moving is a big, expensive hassle.

In my own experience, landlords usually do not want you to move and will keep the rent low enough to have you stay. It's a pain and it's lost rent for them if you move and they have to find another renter.

Sure, it could happen that your rental house gets sold or something like that, but as a rule, if you want to keep renting somewhere, you probably can, at least if your landlord is a human. Corporate landlords are evil, and are more likely to do evil things.

RentingForHalfTheCost says

Some data just from today's craigslist. Lots of 3/2 rentals under 1500/mth.

http://monterey.craigslist.org/apa/2961763346.html

Whoever lived in your mid-500k home and was paying 3k/mth wasn't really getting a good deal.

You know you should put up the ZILLOW price of these rentals next to their rental prices. Zillow has actually gotten much more accurate this past year in their zestimates.

http://monterey.craigslist.org/apa/2954408531.html
Here's a $1300 3/2 rental ... 262 8th St, Soledad, CA

The ZESTIMATE is $121K for the property...

Why would you RENT This place for $1300 when you could buy it with 10% down for a monthly PITI of of between $850-$900 a month!

That's a savings of $400-$450 a month... over $5K a year.

If you can afford to buy in many areas where rents are high... it makes sense to buy.

I don't know where those rentals you found on Craigslist are... But in all fairness, you should ZILLOW the price of the home.. then compare that to rents. That will give a much more accurate depiction of the market.

Zillow has become the DEFACTO standard for all potential home buyers I know... They rarely will pay more than what the zillow Zestimates... unless upgrades are obvious as compared to neighbors.

I noticed a couple rentals in very nice parts of Monterey,close to the waterfront that are a little out of whack Zestimate vs. Rental price wise. But rental parity is a lot closer than many think.

If an area has a hundred 2 bedroom apartments for rent... and ten 3 bedroom houses. Of course the average rent will be lower and the price of homes will look unaffordable. But I'm not seeing the glut of homes for rent that are dramatically cheaper than owning.