patrick.net

Sure, rents came down from astronimically unfair levels since 2000, but i’ve seen rents creeping up for at least a year and a half now.

I would say 9 months or so.

If real estate stays stagnant, while we all get 100-200% raises, that’s fine for homeowners and renters a like. Why? B/c generally both make money and both are benefitting. Don’t know what the argument is here.

One thing though: when the market is stagnant, there are mor choices. :)

Other more responsible cities such as Concord have such an ordinance where only a certain percentage of units can be converted per year and only a certain percentage of those units can be sold to investors. Concord has been and is approving conversions nonetheless.

On the other hand, I think it is better not to have any ordinance. There will be more incentive to build higher-quality rental housing and they can be quickly converted to owned units so that supply will be there when the market needs it.

Like price control, anti-conversion ordinance may give counter-intuitive results in term of providing affordable housing.

More choices good for all of us! For buyers who want to buy, and for homeowners who want to move up. Win for all, as all our incomes are rising.

Let's hope so.

astrid,

I really don't mind if people "mentally hedge" b/c I probably do it 5 times a day. It's when people take pains to "go on record" that bugs me.

"We'll just buy a place, any place and if it goes up we'll look smart"

"but if it doesn't we'll have gone on the record as having said"

We're in it for the long term.

We didn't buy it as an investment.

We really like the area.

Etc. etc. This I have heard enough. All this hedging. Just once I'd love to hear somebody say, "We knew we couldn't afford to live here but thought we'd just throw our hat in the ring and it totally back fired so we'll be lucky to bail out before our credit gets hit too bad".

If a small car hits a SUV it will not flip.

Depending on the angle of impact, it might. In particular, if the crash causes the SUV to drastically change its direction ot travel, it is more likely to flip.

Someday I'll have to tell you guys the story of the Chinese auto production manager who ordered non-spec parts. His reasoning? The parts were foreign made too and I'm getting a nice kick back...

If real estate stays stagnant, while we all get 100-200% raises, that’s fine for homeowners and renters a like. Why? B/c generally both make money and both are benefitting. Don’t know what the argument is here.

@Benjammin,

An inflation-only correction would be fine by me, though personally I give it low odds. I doubt wages can skyrocket that much in the next few years, especially here in CA, where the local economy is itself heavily dependent upon RE and many high-wage tech jobs can be easily outsourced/arbitraged. A combination scenario of gradually rising inflation/wages with moderate (30-40%) nominal price drops sounds fairly plausible, though.

DinOR,

I'm constantly amazed by the stupidity of 75% of any given population (not just average Joes, we can start with Big Three executives and airline executives and go from there). I'm even more amazed by their ingrained need to feel not stupid.

As to the matter of verbalizing their mental hedges. Well, if we say it a hundred times a day, that must make it true, right?

Car talks ...

I've owned only one new car in my life. I really enjoyed it. If you want to spend up to 35K on a good car, I highly recommend BMW 325XI. Superb handling. Very safe. Very solid. Heavy. Great looking. Take the euro-delivery option. It'll save you $1500-2000 which you can use for a euro-vacation trip, driving your new BMW am der Autobahn, or even better, through the Alps. Also, get the cloth seats with leather sides. They are much more comfortable and aethestically pleasing than the (shitty and smelly) leather seats.

Cars are just cars. If you don't like driving a car that handles as well as BMW, just buy any car that runs, is reasonably comfortable and roomy, has a good reputation for safety and reliabity.

BMW feels like a horse. I'll keep mine till he dies.

FRIFY - Four Rentals in Five Years

Long time lurker.

Why haven't one of you smart folk remarked that the spike in 3BR rental prices might be attributed to folks who should sell because they're leaving the BA but instead are "just going to rent it out to cover the Mortgage". Correct me if I'm wrong, but Patrick's Webbots have no way of determining what rentals are actually renting at the advertised price. Sure, folks can advertise 3BR $3400 in San Bruno:

http://www.craigslist.org/pen/apa/156494230.html

...but isn't this really saying "Crap, I bought a Fog-banked San Bruno house for $750K and now I have to leave the Bay Area! I know, I'll just rent it out and have some sucker pay my mortgage!"

Sorry buddy, I can't help you. I'm in a nice 3BR SFH in Belmont for $2200 with long term lease.

but Patrick’s Webbots have no way of determining what rentals are actually renting at the advertised price. Sure, folks can advertise 3BR $3400 in San Bruno

You make an excellent point, FRIFY --AFAIK, Patrick's rental graph tracks ASKING rents listed in the classifieds, not actual rents ACCEPTED. This may be more of a symptom of that "escalation of commitment" by desperate homedebtors then any real increase in median rents. Deperate flippers wish to cover their over-leveraged a$$es when the NAAVLP resets, so they play a "shoot the moon" strategy of asking sky-high rents in hopes they'll get someone to bite.

Time will tell --if those rental graphs continue to trend upward for a long time (a lot longer than 5 weeks), then we may have to revisit the "soft landing" scenario.

One of the most frustrating aspects of trying to study the rental market is lack of reliable public data. NAR/CAR numbers may be dodgy/manipulated, but at least they exist. It's almost impossible to find equivalent non-proprietary data on the rental market.

Peter P,

I only live once, so I would like a fun ride for it. (and now, the hedging - if I get killed and comes back, I want to come back as a large country cat.

HARM: “escalation of commitment”

Exactly, and thus the increasing signal on Craigs list may in fact be symptomatic of pressured owners. If you bought last year and sold this year, you’ll lose your shirt on the commissions. Thus shoot for the moon to have somebody cover the mortgage. If you check inventory on www.housingmaps.com, you’ll find that the Peninsula at least still looks like it’s got plenty of inventory at all price levels in every town. When we gave notice on our last place, our landlord was worried. I think he rented it out again by keeping it pet friendly at the same price as we paid 2 years ago.

Trucks are a different beast. They are supposed to be the workhorses. I have no experience with them. My impression is that American trucks are the most robust.

If you check inventory on www.housingmaps.com, you’ll find that the Peninsula at least still looks like it’s got plenty of inventory at all price levels in every town.

Can you recommend something near Palo Alto (within 5 miles)?

My criteria:

* Allow cats
* At least 2 bedrooms
* At least 2 bathrooms
* Inside laundry
* Under $2500 a month

GentleCheetah,

And the 3 series BMW are Civics with RWD! :P

If I was in the market for that kind of car, I'd shop around for a mid to late 90s MB convertible. The upkeep will be expensive, but probably no worse than for new MBs, and I could get a much nicer car for the same $25-35K.

"My criteria:

* Allow cats
* At least 2 bedrooms
* At least 2 bathrooms
* Inside laundry
* Under $2500 a month "

And make them BIG bathrooms and BIG bedrooms, gosh darn it!

If I was in the market for that kind of car, I’d shop around for a mid to late 90s MB convertible. The upkeep will be expensive, but probably no worse than for new MBs, and I could get a much nicer car for the same $25-35K.

I rather get a 2000+ LS400 for that price...

And make them BIG bathrooms and BIG bedrooms, gosh darn it!

Yeah... nice to have these but not necessary:

* bedrooms no smaller than 13x11
* walk-in closets
* newer appliances

and of course... pergraniteels! :)

It keeps getting better and better. I posted this link last month, and now they have updated the stats for week ending 4/20. This is for the Tri Valley area - which will pop before the core Bay Area.

http://tinyurl.com/m432t

The listings are dramatically up and pending sales are dramatically down YOY. It was a very similar story last month. This spring season is already dead there. I think 2007 spring is going to be far worse.

I do not see such drastic signs yet for the Cupertino - Sunnyvale area. The inventory of Cupertino has not increased as much (% wise) as these cities on Easy Bay. We will see what happens in summer.

Everything seems to be going according to the script.

Yeah, but Lexuses are too understated as a substitute.

California is pretty easy on cars. If they're well taken care of, they can last a very very long time.

Peter P,

If you're looking at anything near the street or parking lots, double paned windows will help a lot with the noise.

If you’re looking at anything near the street or parking lots, double paned windows will help a lot with the noise.

I rather avoid street noises altogether. I need air!

Yeah, but Lexuses are too understated as a substitute.

Turn on the xenon headlight and it will no longer be understated. ;)

I loath xenon lights...and idiots who use high lights on busy streets...

I loath xenon lights…and idiots who use high lights on busy streets…

Actually, xenon light is a very good way to increase visibility without annoying people.

No, do not use high beam. I hate people who use high beam inappropriately.

"I believe the ZX2 was based on the Escort, not on the Taurus.
Nitpickingly,
PS"

Oops, I guess I just blew my domestic car credentials. Can you tell I really don't like that ZX2?

Thanks :P

>Can you recommend something near Palo Alto (within 5 miles)?

The cats are the problem of course. Our past two landlords didn't want our dog but took us anyway (a good credit score and landlord references help of course). You can always meet first then bring up the pet. It might waste both of your time, but we've squeezed the dog past with an introduction.

How about:

http://www.craigslist.org/pen/apa/154273172.html

Asking Rent is a starting point. We've paid less than asking 2/4 times. A good credit history and a polite no-hassel demeanor can save you $100/month. Project that you don't need to move and that you're fence-sitting and then make your offer.

Alright, back to work. You guys waste enough of my time as it is... ;-)

Peter P,

I don't know, I find the xenon lights way too bright, especially when they're coming at me and there are no dividers.

The cats are the problem of course. Our past two landlords didn’t want our dog but took us anyway (a good credit score and landlord references help of course). You can always meet first then bring up the pet. It might waste both of your time, but we’ve squeezed the dog past with an introduction.

FRIFY, thanks for the recommendation.

We will try. There was one time we offered $100 more plus double deposit but the LL still did not want cats. Strange.

I don’t know, I find the xenon lights way too bright, especially when they’re coming at me and there are no dividers.

Hmm... perhaps they had high beam on? I find them very bright but not blinding.

(My wife hated them until we got a car with them ;) )

Hey I’m just the renter, they don’t talk to us anyway so why should I care.

Huh? Don't you have litter boxes?

Peter P,

Now you know why smart landlords hesitate on pets. I've heard several stories of people who've rented to renters with dogs, and they had to replace all the carpet and backing because the house smelt like dog piss afterwards.

Now you know why smart landlords hesitate on pets. I’ve heard several stories of people who’ve rented to renters with dogs, and they had to replace all the carpet and backing because the house smelt like dog piss afterwards.

But cats use litter boxes. And how much is new carpeting anyway? They can just charge higher rent and/or deposit.

I have never had a problem with the cats. Some people want a bit more deposit, but i have never had to pay cat rent. How can cats be expected to pay rent, for jeebus sakes they don't have pockets.

The street is quite risky for cats.

I am most definitely a cat person. My wife is probably a 60/40 dog/cat person. One of our cats is dog-like and can fetch if she feels like.

Agreed, dogs are too much work. A good one can be very rewarding, but there are so many idiot/hyper dogs out there. Of course, this current trend of "rescued" dogs and people overindulging their dogs makes everything so much worse.

I prefer goldfish and plants though. Very soothing. Plus, nobody calls me a murderer if I inadvertantly kills something. And no vets bills.

I finally went to realtor.com and checked out the specs for this house. I thought this was an outlier, but it looks like all Palo Alto houses in this price range are similarly cramped and unpleasant.

What can possibly persuade a family to part with that much money? For something that would be lower middle class living almost anywhere else in America! For $1.5 million I could start my own business and live anywhere I want. How could anyone want to live in 1,500 sq ft, 50+ year old, street facing lower middle class housing?