patrick.net

Bay Area is always special. Decide to buy or rent!

This is such an unpopular topic. Is it fact, or is it just hot air? :)

cross post.. sorry ...

yes.. i read the article and it also suggests its the highest since 2001.. it fails to mention the peak in rents was actually around $4000 or so back in 2000.

Rents will fall, in part due to other factors.. no sense employing workers in BA, were rents are higher than other part of the country... so job losses as we have seen will continue.

Some of the people I know of who have been without a job for 2+ years are NOT being asked what they have been doing since being laid off for the past years. Its pretty well known its really really bad for many people out there. Higher rents will not make job expansion any better and hiring any easier...

thomaswong.1986 says

it fails to mention the peak in rents was actually around $4000 or so back in 2000

I don't recall the rent was ever that high. Do you have a reference for that?

thomaswong.1986 says

Some of the people I know of who have been without a job for 2+ years are NOT being asked what they have been doing since being laid off for the past years. Its pretty well known its really really bad for many people out there

I cannot argue with this. It seems like the ones, that are still employed and made it through the mortgage meltdown, are doing better while the ones, who lost their job during this time of crises, are not doing very well.

E-man says

I don't recall the rent was ever that high. Do you have a reference for that?

oh yes. the insanity we saw back in SF Bay Area... no it was from memory only !
this would be the high rise condos in SF near the financial district.

E-man says

I cannot argue with this. It seems like the ones, that are still employed and made it through the mortgage meltdown, are doing better while the ones, who lost their job during this time of crises, are not doing very well.

time will tell.. how this all works out.. but not out of it yet!

The apartment complex where I used to rent before buying is currently over 28% higher than in 2010 for the same exact floor plan. If there was ever wealth extraction from the renters to lanlords/REITs, it's happening right now.

dublin hillz says

The apartment complex where I used to rent before buying is currently over 28% higher than in 2010 for the same exact floor plan. If there was ever wealth extraction from the renters to lanlords/REITs, it's happening right now.

I have observed the exact same thing around here. The property management company is trying to raise the rent on me 4% this year because "they have to stay profitable." Right, because you guys raised rent 15% on all new leases last summer just because everyone else was and I am sure that you were renting for a 15% loss before then.

It's cool though, it will all work out in the end, somehow. Either living costs will make some sort of sense here, or they will get more silly and I'll just leave the state. No worries here!

But Thomas...IT'S DIFFERENT HERE! Nothing else can replace the talent that can ONLY be fostered in a reality-defying, ultra-liberal enclave like the Bay Area! Didn't you KNOW?! There are no losers here, only the last winners!

bmwman91 says

But Thomas...IT'S DIFFERENT HERE! Nothing else can replace the talent that can ONLY be fostered in a reality-defying, ultra-liberal enclave like the Bay Area! Didn't you KNOW?! There are no losers here, only the last winners!

LOL! oh the hype is truly funny ( and sad), its a great thing we didnt have that back when i started my career... We had alot more common sense back than!

http://pressheretv.com/?p=2710

bmwman91 says

Pay is good here, and when tons of people have discretionary income, the cost of living rises to get its piece of the pie solely because it can (rent seeking). That is nothing new, although it is always annoying to those of us on the paying-side of the fence. Enough people in the BA can't distinguish between "making money" and "living life" so as the cost of living goes up,

Today, its more than being annoying. The rent seekers are more aggressive and risk ignorant. You certainly dont kill the goose that laid the golden eggs.. I KNOW the rent seekers dont get it because of the hype you get from the RE and Rental industry. And so many are outsiders with no real long term commitment to the region.

bmwman91 says

These fuck-faced douche bags look me in the face and act like Rent is raising it self, or at best everyone else is raising theirs so it is only natural that they raise theirs. No asshole, YOU are raising it solely because you can and want to see how much milk you can get out of the cow.

The apartment management complexes only understand force which manifests itself via vacancy rates. If enough people moved out and they would have trouble replacing the renters they would lower the rates. Unfortunately, it's probably not happening. If they jack up the rent 20% even if the unit stays empty for over a month, they will still come out ahead over a rolling 12 months period.

Rents have gone up, in large part, because of the low inventory of homes to buy. Not only has low inventory squeezed prices higher over the last 6 months, but it's discouraged a lot of buyers. I have several right now who simply need to "get in" to some decent areas and are willing to buy or rent, whichever decent on they can find first.

Point it, if inventory was normal and home prices hadn't popped, there would be less rental demand and therefore lower rents.

E-man says

bmwman91 says

These fuck-faced douche bags look me in the face and act like Rent is raising it self, or at best everyone else is raising theirs so it is only natural that they raise theirs. No asshole, YOU are raising it solely because you can and want to see how much milk you can get out of the cow.

LOL! That's funny. Well, in 2009 several members on this board including Patrick were sharing ideas and tactics on how to request for lower rents. Apparently the tide has turned. Like what Warren Buffett said, why do we care if the market goes up 7 years out of 10 years. The up years more than made up for the down years. Now you understand why some people would prefer owning instead of renting over the long haul. :)

Learn from your victory. Prosper from your failure.

I agree - when you do rent vs buy analysis in the calculator (and do apples to apples comparison for property types) and assume even that both rents and home prices will rise at the rate of inflation (3% to be conservative), the renter gets crushed over the long haul, by a very significant amount. The only way this does not happen is if a renter achieves a tremendous return on investment in alternate vehicles over that long period of time and that is very difficult to do and anything but guaranteed.

E-man says

LOL! That's funny. Well, in 2009 several members on this board including Patrick were sharing ideas and tactics on how to request for lower rents. Apparently the tide has turned. Like what Warren Buffett said, why do we care if the market goes up 7 years out of 10 years. The up years more than made up for the down years. Now you understand why some people would prefer owning instead of renting over the long haul. :)

I totally understand why it can be better to buy a given house than to rent it. In my case, if I am going to rent, I am going to do it in the cheapest clean apartment that I can find. Renting only makes sense if you can do it for less than buying, and I think that it usually requires you to "settle" for less than you would buy. I'd never buy a condo/townhouse...at least around here, I'd have to pay 2x-3x more per month for the same shared walls. Similarly, I would never rent a house around here since it is much more $ than an apartment that I could otherwise be saving.

robertoaribas says

Funny, in 2007 when I had to lower rents to keep my places rented I didn't feel so much venom towards the renters..."Hey you fucktards are offering to pay less just because you are cheap bastards... how dare you throw that 'one month free' incentive from the complex across the street in my face..." Nope, didn't even occur to me.

You could also try growing up and accepting capitalism I guess...

Don't get me wrong, I completely understand why landlords are cranking rents. It is business, nothing personal, and I would do the same if I was in their shoes. The thing that really rustles my jimmies is being patronized by them. Many landlords/property managers that I have encountered don't have the spine to tell me to my face that they are seeking to maximize profits. Instead they try to act like the rising rents are needed to make ends-meet, despite everyone knowing that they were profiting when rents were 20% lower about 14 months ago. Just be honest about it & you aren't a fuck-faced douche bag! It is a matter of respect; treat me like an adult and I'll do the same for you.

Considering that rents seem to have dipped a lot between 2008 & late 2010 (around here anyway), I am still getting a good deal on my townhouse apartment rental. In fact, as far as I can tell, I have the cheapest 2BR rental in the area. My current property manager is nice, and they are only increasing my new lease by 4%, which leaves me paying 7% less than someone that comes in on a brand new lease on this floor plan. In the past I have played hard-ball when I knew that I had leverage and got my rent reduced. This year, I pushed a little to try to maintain it where it is, but I know that I have near-zero leverage in Mountain View this year. I'd be replaced in a week, and I happen to like where I am at so I didn't put up a fight. It's all about knowing who has leverage, and this year it isn't me. My landlord isn't a fuck-faced douche bag though, because she is honest with me about why rents are increasing. "Demand is high and the management company wants to take advantage of the hot market." Understood, thanks for being honest.

And of course there are tons of asshole tenants out there that think they are entitled to something from the landlord. They take lousy care of the unit because, "fuck it, it's a rental" and then expect to get a slamming deal for gracing the place with their presence. I go out of my way to take care of my living space and do/pay small maintenance items myself since it is faster, easier and builds a positive relationship with my landlord that generally pays for itself over time.

bmwman91 says

Don't get me wrong, I completely understand why landlords are cranking rents. It is business, nothing personal, and I would do the same if I was in their shoes.

Landlords are raising rents because the market will bear it. And as long as people keep applying, they will keep raising the prices.

Everything goes in cycles. It wasn't that long ago that apartment complexes in the Bay Area had big banners offering free rent and other incentives.

At some point in the future, housing supply will grow, home prices will begin to feel less-risky, and more renters will look at buying again. Then, landlords will have to lower rents again.

APOCALYPSEFUCK is Shostakovich says

What's the aphorism? Making money is sometimes about leaving some on the table.

Your lack of opportunism has been reported to the Wall Street overlords. You will be taken into custody and reprogrammed to take everything you fucking can at every chance you have with no consideration for others, consequences or your own long-term well being. You will be reformed into a proper American.