patrick.net

Last time air came out of the real estate bubble in TX, AZ and CA (S. Cal more than N. Cal) rents dropped quite a bit…

Cool!

New thread: What is “real” about real estate?

OK, some non-speculative data on BA rents. Moved from DC (McLean) to Foster City (near San Mateo) in July 05. Rented a place -- 2br, 2ba 1100 sqft with a garage, pools etc. -- $1805. One year later, renew the lease -- mgmt asks 10%, I offer 5% and they accept. The asking price for a new tenant is (I think) 15% higher, but there are MANY vacancies, and incredibly high turnover. So, yes, rents are going up, but there are also many places in the area for rent. If I needed to, I could rent a place for $500 less (not as nice, but still, it's a place to live). I guess that they are at about the limit of prices since there are many choices (in the mid-Peninsula area, there are many 2/1 that can be had from 13/1400 to 3000+)

If we figure a sale value = 100 to 120 gross monthly rent, these places are worth between 180K and 230K. Problem is, a comparable condo is 500k to 600k. So I don't see rents increasing enough to support housing; rents would need to go to 3X what they are today (e.g. 4K/month).

And on the rental price, comparatively, this was about 50% more than I was paying for a place in McLean but where I am now is substantially nicer than what I rented. I'd guess that a comparable place in McLean would be priced within 10% of the Foster City rent. Wages are probably a bit higher here than in DC, but taxes are higher as well. So rents are generally in line with income, as would be expected.

I think we shouldn't feel too much of a satisfaction in seeing FBs suffer, that's not the point. We should definitely feel good for staying rational during the craze of 2004-2005. But most importantly instead of declaring a moral victory we should stay calm and focus on how much can the prices decline and at what price it's optimal to buy. I'm personally shooting / hoping for 50% decline in BA, which currently doesn't seems to be a realistic expectation, but anything less won't make the prices in BA attractive to me.

Hmm, I am Facing Foreclosure .com has been shut down but you can still find the original content cached by google: http://tinyurl.com/gc3vp

Rents are up markedly -- 5%-10% range -- for a specific classification of rentals (which I know well being a renter in that classification). Those are "fence-sitter" rentals. Exclusively SFHs, usually 2500+sqft, and big enough to accommodate families that have sold out of similar homes and wish to rent equivalency (so as to not store/sell furniture, keep pets, room for kids, etc.)

One could find 4BR SFHs to rent in south Marin in early 05 for about $3500/mo. It is difficult to find anything now for under $4500/mo; and even those are usually of low quality. Newer McMansion homes are renting for well over $5K now.

The squeeze now is that, as rents in this category continue to climb, but rents of condos & apt bldgs don't, at what point does it make sense to just sell most of your furniture and rent a couple of adjacent units in a bldg? As of July it was still slightly better to pay the SFH rent for us.

Randy,

I think there will be some lagging supply issues in those segments. That traditionally been a small market (many going as bridging homes for short term contractors or new move ins intent on buying) so any uptick in demand is quickly going to constrain supply. However, given that renting is still only 1/3 or 1/2 of the ownership costs for the same properties, rent will probably go up for this segment.

I think unless the apartment or condo option is much cheaper than SFH, it's still better to go SFH for families. Noisy upstairs neighbors and lack of parking is a constant challenge for apt living, and most of the places are not child friendly and in lackluster locations. And if you're dealing with individual condo landlords, one refusal to renew/foreclosure can force you to move all over again.

I've been seeing 10-15% rent increases in tri-valley apartments this year. As late as 14 months ago, my boyfriend got first month free as a move-in bonus to his current apartment. When he looked into renewal v. another move this year, the equivalents were renting $100 to $150 more than last year and no move in bonuses in sight. He ended up staying put for about 8% increase and no renewal bonus.

In the long run I think this segment is vulnerable to softening rents in time since the renters are more flexible and substitutes are easier to come by. But right now, people are getting squeezed in this segment too.

My boyfriend mentioned that he hopes his noisy upstairs neighbors will move due to the uptick in rents.

Me: But you're living in one of the cheapest nice apartment in the area! ABF: yeah, but maybe they'll move to Tracey or Livermore to save $150 or $200 a month.
Me: Gas?
ABF: Most people don't think about that when they sign a lease.

Casey Serin says:
I misused my ambition.

is that like misunderestimation? (yeah, i had to bring up GWB, as though we don't have enough problems already...)

I have damaged my reputation and I have damaged many good relationships through this. I never meant to hurt anyone. So to stop any further damage I am shutting down and laying low.

and my posts never got out of his moderation queue :cry:

the 'being nice' thread didn't last long -- is that a sign of the times?