patrick.net

Rents are not on the rise for me. Houses are falling believe it or not. That makes it easy for me to keep renting. You asked.

Blurtman says

Folks should try to get out of the Bay Area.

Wish I could get out of here. But where to go?

I was seriously considering Portland for a couple years. But after many, many people told me about the chilly, wet weather (I always visited in summer) I realize I could not survive there - my mood can be quite dependent on the weather.

Spent two years in Austin. Got really boring. Not a very big place when you live there. Great outdoors scene but itsy bitsy old town surrounded by boring suburbs. And Texas is just, well, Texas.

Malkovich says

Blurtman says

Folks should try to get out of the Bay Area.

Wish I could get out of here. But where to go?

If you are ever up in Seattle, and turn on the telly, you might see that just about every other ad is for a CRO recruiting patients for anti-depressant medication studies. But as they say, the two worst things in life are not getting what you really, really want, and getting what you really, really want. Clearly you need to keep your place in SF, and get another place in Hawaii, the Northwest (summertime only), Boston (ditto), NYC (ditto), or other large, vibrant big city, if you need the culture.

Blurtman says

Clearly you need to keep your place in SF, and get another place in Hawaii, the Northwest (summertime only), Boston (ditto), NYC (ditto), or other large, vibrant big city, if you need the culture.

Haha.. wish I could.

Actually my GF's family is in Honolulu. I have proposed numerous times that I keep my rent-controlled apartment and profitable business going here, start another business with her bro in HNL, and live half the year in each locale.

Seeing as I won't be buying an overpriced, 100yo, falling-apart duplex or triplex here in the Bay Area anytime soon, this plan may be a good option.

In all seriousness though, I have thought long and hard about moving other places and, well, despite all of its flaws, I love San Francisco/Oakland (I couldn't care less about anything south of SF or east of Oakland).

1sfrenter says

It appears that the money is coming from China.

Could very well be. I looked at this http://www.redfin.com/CA/Oakland/3514-Randolph-Ave-94602/home/1808876 last week - technically in a good area but it was a few houses from a crappy area of MacArthur (homies milling around) and it needed a ton of work.

I had a quick look at the house and left. As I walked back to my motorcycle this 7-series BMW aggressively raced up and parked in front of the house. These two 20-something Asian dudes literally bounded out of the car with a clipboard or something. In their dress shirts and pants (must have left the jackets in the car) they started jumping around the house like excited grasshoppers. Helmet in hand, I stood there dumbfounded.

Money from China indeed.

My friend in S.I. (NYC) just sold his very old house to Chinese. House was worthless but sits on nice small uphill lot overlooking Manhattan skyline. He was dreaming on the best possible bid of $550K. He got cool $600K all cash, no questions ask.
We and Europe made some Chinese very reach and now money are coming back to us.

supersunken says

Curious to know why people think renting right now is the right way to go when the rental market is on the rise and rent for a 1 bedroom in some places is more than mortgage on a 2/2 condo in the same locations?

My rent is less than a comparable condo. AND I am not buying a depreciating asset. So, I rent.

Let's say you pay $1500 a month for renting an apartment, each year the rent can go up and up and up. 20 years from now, you may be paying $3000 a month (just a guess) for that same exact apartment. But if you buy that apartment, your payment would be $1500 a month - your payment will still be $1500 20 years from now. At the end of 20 years, you can rent out your house with that $1500 mortgage payment, but charge $3000 to rent it out! That is a huge benefit to owning your own property.

hanera says

Let's say you pay $1500 a month for renting an apartment, each year the rent can go up and up and up

Never happened to me and I have been renting for 15 years in the bay area. One time the landlord put the rent up and I said "nice knowing you" and then rented a better place for cheaper. YMMV.

How about the scenario of renting for 1500/mth while socking away 1500/mth in real investments that pay dividends. After 20 years you buy a house in cash and have money left over to live. No where in this mess did you owe your salary to a bank. Debt is for the weak. ;)

supersunken says

Where do people even come up with the money?

Shanghai. Taipei. Hong Kong. SIngapore. Mumbai. Bangalore.

Can someone name 1 property address that they suspect to have been purchased using money from abroad? I would like to debunk that theory.

bighorse says

Can someone name 1 property address that they suspect to have been purchased using money from China? I would like to debunk that theory.

14 CottageForYuan Rd, San Jose, CA

RentingForHalfTheCost says

bighorse says

Can someone name 1 property address that they suspect to have been purchased using money from China? I would like to debunk that theory.

14 CottageForYuan Rd, San Jose, CA

That address does not seem to exist. Please check it again.

bighorse says

RentingForHalfTheCost says

bighorse says

Can someone name 1 property address that they suspect to have been purchased using money from China? I would like to debunk that theory.

14 CottageForYuan Rd, San Jose, CA

That address does not seem to exist. Please check it again.

Sorry, I wrote it down wrong. Here is the correct one

121 KungPao Way, Cupertino, CA

E-man says

RentingForHalfTheCost says

Debt is for the weak. ;)

Tell that to the greatest investor of all times, Mr. Warren Buffett. It's more like no debt is for the fearful while debt is simply a double edge sword. ;)

Learn from your victory. Prosper from your failure.

Swords are for the weak. I'd rather use my bare hands.

For me, the high income job keeps me trapped here for now. However, if I could find a comparable job paying similar income and allow me to work remote from home with some travel, then I would move in a heartbeat to south Florida and pay CASH for a nice place with money left over for retirement and a boat.

E-man says

I have even a better assumption. Let's say your PITI and HOA are $950 to $1,150/month on a condo, and you rent it for $1,500 to $1,700/month. How many would you own?
Or your PITI is $2,000 on a duplex, and you can rent it out for $3,000 - $3,200. How many would you buy?
Those deals existed here in San Jose in 2009, but so hard to find in 2012. :)

On how much down payment %???

RentingForHalfTheCost says

bighorse says

Can someone name 1 property address that they suspect to have been purchased using money from China? I would like to debunk that theory.

Try this one:

539 Holyoke St. 94134

Listed at 499K in Jan. Sold for 588K all cash within the week.

How are you tracing these?

bighorse says

Can someone name 1 property address that they suspect to have been purchased using money from abroad? I would like to debunk that theory.

Bay Area: "Buyers who appear to have paid all cash – meaning there was no evidence of a corresponding purchase loan in the public record – accounted for 29.4 percent of sales in March."
http://www.dqnews.com/Articles/2012/News/California/Bay-Area/RRBay120418.aspx

Record Portion of California Homes Bought With Cash
http://www.dqnews.com/Articles/2011/News/California/CashSales/CACash110228.aspx

E-man says

25% down on all except one, which was 10% down and total PITI of $950 and rented for $1,550.

With 25% down deal are just OK, deals like this you can still find plentiful slightly out of center SV. PITI do not cover all rental expenses. Next one with 10% looks great. NET ROI is what matter to me.

I think opportunity is not lost yet. Currently three events push prices up: low inventory, growing rent (scary for some) and decreasing interest rate. What may happen next?
RE: inventory. Most people already accepted the fact that 2006 prices won’t return any time soon. Current spike with prices can be seen as last chance to sale for reasonable price.
RE: rent. New construction of rental communities entering; some renters purchased empty houses; more investor units hit open market. All of this can ease rent increases, stop grow completely or decrease somewhat.
RE: interest rate. Continue decreasing interest rate did not stop house prices from further decrease in Japan. What do we have on horizon able to elevate economy beside of lowering interest rate?

E-man says

RentingForHalfTheCost says

E-man says

RentingForHalfTheCost says

Debt is for the weak. ;)

Tell that to the greatest investor of all times, Mr. Warren Buffett. It's more like no debt is for the fearful while debt is simply a double edge sword. ;)

Learn from your victory. Prosper from your failure.

Swords are for the weak. I'd rather use my bare hands.

LOL! Hands are for the weak. The smart ones use their brain. ;)

Learn from your victory. Prosper from your failure.

I use the brain of the enemy for throwing practice with my bare hands. Brains are also for the weak. Nothing beats a good set of hands.

RentingForHalfTheCost says

How about the scenario of renting for 1500/mth while socking away 1500/mth in real investments that pay dividends. After 20 years you buy a house in cash and have money left over to live.

Hope is not a bank stock.

E-man says

The smart ones use their brain. ;)

The smart ones use their mouths!

REpro says

Continue decreasing interest rate did not stop house prices from further decrease in Japan.

Every time I read someone quote Japan, I need to comment. Population of Japan has been declining and aging for the past 20 years while population of USA is forecasted to continue to increase briskly and remains youthful. Japan can't be used as a reference.

hanera says

Every time I read someone quote Japan, I need to comment. Population of Japan has been declining and aging for the past 20 years while population of USA is forecasted to continue to increase briskly and remains youthful. Japan can't be used as a reference.

Population of USA is forecasted…aha.
Most of population grow in the past was associated with fresh immigrants coming to US. Now with weak economy as we have now it is not a magnet to immigrants any more. Currently more illegal Mexicans are living US, than coming into. Baby Boomers are aging too, right? What do you think this big housing company will do? E.g. KB Home, they still build new houses in Las Vegas, while prices continue to erode.

REpro says

Population of USA is forecasted…aha.
Most of population grow in the past was associated with fresh immigrants coming to US. Now with weak economy as we have now it is not a magnet to immigrants any more. Currently more illegal Mexicans are living US, than coming into. Baby Boomers are aging too, right? What do you think this big housing company will do? E.g. KB Home, they still build new houses in Las Vegas, while prices continue to erode.

I don't get what you are arguing. The US has net immigration. That is just a fact.

Simply, we can’t count on rapid grow of population based on current situation.

REpro says

Simply, we can’t count on rapid grow of population based on current situation.

The original point is what'd happened in Japan is not a good indication of what might happen in USA. Population growth statistics is just one difference. Another is Japanese are big savers while Americans are big spenders. Also, White House and Fed are well aware of what had happened in Japan, unless we don't learn, we should be able to avoid some of their pitfalls.

REpro says

Simply, we can’t count on rapid grow of population based on current situation.

That entirely depends on what you mean by rapid.

REpro says

hanera says

Every time I read someone quote Japan, I need to comment. Population of Japan has been declining and aging for the past 20 years while population of USA is forecasted to continue to increase briskly and remains youthful. Japan can't be used as a reference.

Population of USA is forecasted…aha.

Most of population grow in the past was associated with fresh immigrants coming to US. Now with weak economy as we have now it is not a magnet to immigrants any more. Currently more illegal Mexicans are living US, than coming into. Baby Boomers are aging too, right? What do you think this big housing company will do? E.g. KB Home, they still build new houses in Las Vegas, while prices continue to erode.

Bring in 5 new migrants + home grown babies and ship 5 highly paid jobs to Chindia. That sure is going to economically help USA in the long run. Chindia has the most population in the world but most people are living below poverty lines. Same thing will very well happen here. Let the population of USA double but that ain't going to lift the living standards in any ways. :)

hanera says

Also, White House and Fed are well aware of what had happened in Japan

Haha. Thanks for the laugh. Good morning to you.

hanera says

The original point is what'd happened in Japan is not a good indication of what might happen in USA. Population growth statistics is just one difference. Another is Japanese are big savers while Americans are big spenders. Also, White House and Fed are well aware of what had happened in Japan, unless we don't learn, we should be able to avoid some of their pitfalls.

It’s happening now, not only in the US but in Europe, as well. Very high unemployment between after school young and people after 50, work on contract instead full time permanent employment, lack motivation to get married and have children, extended work hours, reduced benefits, saving instead of spending, this is just example.
White House and Fed had 20 years to study what had happened in Japan. They don’t get it.

http://money.cnn.com/2012/05/24/news/economy/national-debt-us-japan/index.htm?iid=Lead

supersunken says

The all cash offers are ridiculous. Where do people even come up with the money?

LOL, all offers are made in cash.. all sales transactions are finalized in cash... USD$. Did the buyer borrow ? who know, not tracked and that info is most likely kept with their banks/lender.. which after all is confidential info.

Expose The Liars says

immigration is flat to negative.

Could be true for the overall USA. It doesn't matter though, for The Fortress.

Patrick had bad experience shopping for a house to buy in The Fortress, so he's renting in The Fortress, then he made this website.

Expose The Liars says

WRONG

Population growth is the lowest level in US history per 2010 census. Secondly, immigration is flat to negative.

Nice try you fuckin' liar.

According to the census, the population grew 9.7% between 2000 and 2010. Net migration was positive every single year during that period, and for 2010, it was 4.25 migrants/1000 population. What part of that makes me a liar?
And do you really expect population growth to be as high as in decades gone by? In comparison to other developed nations, that growth rate is still very high.

Bigsby says

According to the census, the population grew 9.7% between 2000 and 2010

It has been proven over and over that population growth doesn't cause house prices to go up. If it did, then countries like Zimbabwe and Niger would have the highest growth in house prices, but in fact, prices in those countries have fallen, not increased. What you need for house price appreciation is an ample supply of high paying jobs. What we have between 2000 and 2010 is a decline in high paying jobs.

Expose The Liars says

Typical liar. Always misrepresenting the truth.

Population growth is lowest in history of the US.

Immigration is flat.

Quit lying.

Population growth is higher than it was between 1930 and 1940, so it's not the lowest in history. And where in my post did I claim that population growth was higher than in the past? I only talked about whether migration rates were positive or negative. Net migration is not flat, otherwise you wouldn't have positive numbers for the last decade. Not exactly difficult to understand, though apparently it is for you.