patrick.net

The cuisine in Atlanta is slightly better than Columbus OH or Indianapolis IN;

Great fried chicken and ribs in Georgia. Not too good for you, but once in a while... mmmmm.

Vita Says:

> One conspicuous rent increase on the Peninsula resulted
> from a change in ownership and the desire to start
> recovering the costs of the purchase. In San Mateo the
> Hillsdale Garden Apartments, almost 700 units under
> one owner for 40+ years, was sold to a company this year.

The Hillsdale Gardens was built in San Mateo by Bohannon Development just after WWII when there was nothing in the middle of town (the Hillsdale Mall and Hillsdale High did not open until the mid 50’s).

Essex Property Trust the Palo Alto REIT controlled by George Marcus (who personally gave $15mm to the De Young Museum last year) bought Hillsdale Gardens and is doing a MAJOR re-hab of all the units (many that really need it after 60 years).

In the past few years’ lots of REITs (and other investment firms like Hanover Property Corp. also controlled by George Marcus) have been buying many well located apartments and renovating units as people move.

Remember when you see rents going up by $500 at a property rents may be rising across the board or it may be due to a complete renovation of a unit that added a second bath to the unit and granite counter tops and stainless steel appliances…

come on now! Rat infested (human and otherwise) it may be, but it IS beautifull no matter what this guy says. And that includes its architecture (if you exclude most of the western, southwestern, and southeastern parts) .

San Francisco has a huge homeless population. Palo Alto has the same problem too. Sometimes, I really feel threatened.

SF is actually too cold for me, I prefer Oakland, but I work in SSF, so SF it is.

Is it really that cold? I doubt it dips into the 30s too often.

I cannot stand temperatures north of 75.

@allah,

Just substitute "any city in the South" for "GA" and "most cities in the Northeast or coastal CA", and you are onto something. You definitely get a lot for your money relatively speaking. This was the mantra of nomadtoons/ww2. If that's worth moving when you weigh in all the other factors, I'd say go for it.

On the other hand, living in the "White House" or "Dracula's Castle" doesn't do it for me. especially the dracula's castle part...

Apartment rental and house rental are two different markets. It also depends on the price point.

The closer you get to $3K rent, the bigger the apparent drop in BA. The 1b, 2b places are most subject to increases. I posted a couple of days about friends finding house rental in Saratoga and San Mateo, finding far more choices with their 2.5-3K house rental.

You also need to look at the quality of the stock. These houses come fully remodeled with wooden floor throughout, appliances, and yeah baby, granite countertop. Originally these inventory never came on the market for rental, they went straight from one seller to another buyer. The fact that these newly renovated houses come on rental market already says a lot.

If you spend most of your time outside (day laborer) than that can be a problem, but if you work in a nice air conditioned office, then it is redundant. On the weekends and days off you can just spend more time in the pool!

I just prefer fresh air. That said, cool air is more important.

I do not swim.

I actually think that cooler weather is more productive. Many of the world's economic centers are far away from the equator.

Cold weather is also a natural defense against homelessness.

It looks to me that the future economy there will get progressively while here on LI it will get progressively worse.

Uh, was there ever really an economy on Long Island? Other than Roosevelt Field Mall, real estate, potato farming, and fighting Shoreham?

You should learn, it can keep you from drowning.

I can swim. I just hate swimming.

So is affordable housing.

Homelessness is not about housing.

I can tolerate the heat if it is super dry like Vegas.

It is if you can’t afford to put a roof over your head!

They should really find something to do. I am not against social programs that re-educates homeless people. (At least those who can be educated.)

NYC had plenty of that. Now it doesn’t.

I see that as an argument against global warming. :)

SF has plenty of “homeless” even in August when it’s “freezing” here.

True. Perhaps homelessness is just an artifact of urbanism.

If "aid" continues to be available, the problem will not stop. It is really not in the society's best interest to encourage homelessness. What does this imply?

I’m not talking about social programs, I’m talking about your take home pay being enough to be able to pay the rent on your apartment or mortgage.

I do not think the homeless has the concept of "take home pay". I heard that many cash panhandlers evade tax.

I agree that affordable housing is important. I contend that it can be achieved only with a free-to-build policy. NIMBYism created the misfortune you described.

I’m not talking about social programs, I’m talking about your take home pay being enough to be able to pay the rent on your apartment or mortgage. Over here on LI it is becoming very difficult to hire a cashier because the pay could barely pay the rent…..and if you want to be able to eat (anything at all), you can forget it! Everything is out of wack over here and there are many people who have illegal apartments in their houses because they couldn’t afford to live in them without the extra income.

Rent on LI is strangely high. It's kind of weird because the price of rent tends to be inline or more than mortgages.

Unlike the BA where the price of rent is sometimes the 50% that of mortgages.

Which one is out of whack is open to interpretation.

Maybe but I don’t think so. See NYC.

NYC had one good mayor after another good mayor.

No, there never was, but shhhhhhhhhhhh! Don’t ruin it for them, they think it has a really strong economy!

That's kind of what I thought. I'm from LI - and I'd love to move back. The schools are so much better and safer than here in the BA. It's unbelievable.

(The catch is that the prop tax is like 40% more.)

The point I was trying to make is that I would rather live in a new, big, beautiful, affordable house

So move to NE Indiana. You'll get a hundred acres to grow your own food to boot. You can send us a postcard.

I normally don't like to cross-post other people's stuff from other blogs, but once in a while someone comes up with something so brilliant or clever, it deserves repeating:

From the "Update: State Nontraditional Mortgage Guidance" thread at CalculatedRisk:

"I'm not sure about the definition of 'soon.'"

I hope that clears it up.
Tanta | 10.20.06 - 7:51 am | #

Who said anything about Indiana? I have researched Indiana and it is not a place I would want to live.

I know. Why would anyone want to live somewhere they can get lots of land, a huge vintage home, and good authentic indigenous cooking for less than half the price of GA? I guess some people will just pay a huge premium to live in overpriced places elsewhere.

Bay Area does not actually carry much of a premium. Even in the city most homes are still selling for less than $1000/sqft.

The price/rent ratio is more alarming.

I took a look of the GA homes posted above, they look very prefabish to me.

Most of the tract homes of today are prefab anyway, but there is a quality difference, some better than the others. You can sort of tell from the appearance.

I don't find any of the homes above attractive, they look very much the same, and rather cheap (yes, I have had quotes from prefab builders before, and these styles are among the cheapest).

I've been to GA in summer. Thanks but no thanks.

If I am targeting $350K for a decent house, in a couple of years, I can easily find such a deal in outlying places of BA, like Hollister, Tracy, etc. You pretty much get the same weather, still commutable to the major employment center of North America, and good cultural spots with excellent food.

One lesson I learnt from Great Depression in UK was, those suffering areas are mostly likely to sink further in the upcoming depression, while the booming areas may very well maintain their edge. SE UK never lost its appeal throughout the hardship. Depression is a means to make the current regional stratifcation even more skewed, and that's why I will absolutely avoid places with no jobs nor geographical advantages.

RE: Hollister

Hwy 25 is a 2-lane road.

There is a big difference between cheap and affordable, I thought that you would know the difference.

There is a difference between ironic sarcasm and critique. I thought you would know the difference. As someone who was born in Indiana, and grew up in the rural Ohio/Indiana farmland area, I think I'm entitled to find as much wrong with some New Yorker dismissing my Heimat as "cheap" as you do with anyone who might disagree with your pronouncements.

But that's just me.

But you are comparing Santa Monica, one of the most expensive suburbs of CA to GA, how much is the GDP of GA excuse me? If GA just disappears overnight, what kind of dent will it make on America?

GA is a place that I cannot even fancy for retirement, it is so humid in the summer that you can hardly take a stroll outside. There is a lot of plantation and civil war history for sure, but if I were a history buff, I'd have a better time in the old Europe or China.

@allah,
Those homes just aren't my cup of tea. I agree with OO, they look very prefab and mass-produced. Plus, that colonial brick, multiple gables, double columns at the entryway, no trees nearby the house all say McAlbatross to me. Yes, that's all personal preference and doesn't speak to your argument, but there it is. If you happen to like that stuff, and it's aplenty in the place you are considering moving to, then you're in luck. It's a tough nut if you want a California ranch in the Northeast or a brownstone in California, rather than the other way around.

The only new(ish) stock in her neighborhood is for seniors (a hotel being converted to apartments), She is not a senior, so that won’t benefit her.

Try Metropolitan Apartments in San Mateo. It is quite new.

I'm a little late to this thread but I can't resist the temptation to throw in my two cents. One of Patricks main points in the article about fundamentals is the disconect between rental value vs sales value. This is a well known cornerstone of realistic housing prices. As a result the temptation for those with a vested interest to hail any rent increase as proof that all will soon be right in the world of residential real estate is very strong. But it's all nonsense. Things are to far out of wack to be fixed by rent increases alone. A rent increase that large would require significant wage increases on a broad scale to support it and that hasen't happened. Nor is it likely to happen as wage increases are slow in coming and to a large degree being held in check by cheap foreign labor and the loss of many high paying jobs to outsourcing.
Rising rents may contribute a little towards getting the fundamentals back into balance but the majority of the rebalancing act will have to come from price decreases. At this point prices are so high in many areas that even lower interest rates can't help. There simply are'nt enough people left that are either willing or able to buy into the current market to keep prices at this level. The show is over! The only poeple left in the audience (market) now are the ones that won't leave the theater until the credits stop rolling.

If rents increase is that a reason to buy? No, it’s a reason to move! Why finance some homedebtors overpriced POS!

Well, soon you will find yourself in the Philippines. :)

If rent doubles while price remains, it may be a good time to buy.

Oh come on people -- don't you understand; we have intangibles here! I mean, where else can you get a cable car ride?
Oakland, high crime? Must you believe everything you hear about in the media -- I mean they can't even get the rents right :-)

Randy H. - love your "no counteroffer" bid strategy. Now that would make a great reality TV show. Would like to be a fly on the wall when the RE Agent presents to the client; they may as well just dowse them with a cup of cold water.

The Sierra Club does make some good points regarding where you live and how you spend your income (although it does assume lending standards that seem to have already been uhhh... bent). They recommend a loosening of standards in urban areas.
"Most homeowners devote about 55 percent of their income to housing and transportation costs combined. Families in suburban areas spend 30 percent on their homes and 25 percent or more on their cars. Those in urban neighborhoods with good transit spend a mere 10 percent getting around but 45 percent on their homes."
http://www.sierraclub.org/sierra/200509/lol.asp

They recommend a loosening of standards in urban areas.

See, nothing good ever comes out of the Sierra Club. I will not waste time on anything they say.

But why is LI's rent soo high? Does it have too much tenants rights? Or does it have very high property tax?

Those in urban neighborhoods with good transit spend a mere 10 percent getting around but 45 percent on their homes.

Robert, please debunk the heresy.

Let me chime in about the south. I did a stupid thing late last year. I got so fed up with the housing situation in LA that I moved 2500 hundred miles to SC. I've been here 10 months and I can tell you besides the miserable sauna like summer the cultural divide exist. Aside from Charleston there is nothing of interest they are about twenty years behind and they do not accept west coasters readily. As oon as I get a decent job offer I'm outta here. They think we are all liberal druggies (californians) talk about ignorant. Even the monied are schrill....

I think also that the divorce rate is pretty high and you find these single guys who have to become renters.

Single women have to become renters too. More money for the lawyers. :)

"Uh, was there ever really an economy on Long Island? Other than Roosevelt Field Mall, real estate, potato farming, and fighting Shoreham?

No, there never was, but shhhhhhhhhhhh! Don’t ruin it for them, they think it has a really strong economy! "

I spent my HS years in Shoreham, just at the peak of the fighting Shoreham thing. There are no potato farms left out there. It morphed into sod farming after the potato crops failed, and now on the north fork it is nurseries and vineyards. Everywhere else it seems that the sod farms turned into McMansion developments.

I go back every now and again because my folks are still there and I tell you, there is truth to the "you can never go home" statement. As long as you live within a few blocks of the beach and don't have to go anywhere, you have about 7 weeks in the summer when it's wonderful. For the rest, you can have it. I hate it now and am glad I left.

Peter P.

LI has INSANE property tax. There are also an awful lot of human beings there and there is only one way off of that place and that is through NYC. It's a trap and once there, they will have their way with you.

David J,

Good post. Some people here have suggested the "inflating our way out of the bubble" possibility, with rising rents (and possibly wages) coming in line with current housing prices. The problem with that route is just what you mentioned. Who the hell will pay those inflated rents? Salaries just won't support that right now. Salaries don't support housing prices, but that's because funny money fills in the difference. There is a LONG way to go before the rent vs. buy equation makes financial sense on the buy side. Of course, that's looking at it from a purely financial standpoint.

No, they get to keep the house along with the children. The guy has to help pay the mortgage through child support.

Another reason to be a stay-at-home dad. Then perhaps you will be paid child support. :)

I think divorce should be made more difficult, as it has too much negative externalities. It should require nothing less than a compelling case and court approval.

Allah,

The western suburbs of Richmond VA. I know I know...Richmond has arguably one of the worst reputations on planet earth, but you know what, for where I am in life (mid 40's, married, kid in middle school), it's really pretty good. Good schools, safe where we are, good sense of community, friendly neighbors. We've been here for 12 years (moved here from Boston), and the move was a good one. When my kid goes to college, we'll probably leave, but until then, as I said it's pretty good.

It can get kinda hot in the summer though.

In active job search now. Primarily western US. Actually when I drove out last January I went I-40 across I wanted to go thru north western NC\Asheville beautiful drive. I live between Sumter and Mrytle Beach basically alot of foresed swamps.