We rent a small 4-bedroom/2-bath house in Napa for $1400. Its a good deal, but it is very small (one of the bedrooms is little more than a very small “study”) and old. Nothing fancy or recently renovated.
Nice sized back yard though, decent neighboorhood. All the other houses on the street have been fixed up very nicely and many have sold in the last couple of years. One near us was on the market for $560 – didn’t ask if he got his asking price, but it went fast. He said they were surprised it sold so fast with the market being so slow, but he’s done a lot of work on the backyard and in the house.
This house would sell for much less – I’m totally guessing, but think it might go for around $500K, which puts our GRM at about 357.
BTW: it is interesting that the GRMs were in the 120-150 range in the 90s, but I expect this housing bust to cause a nasty economic downturn. What were the GRMs in the (short) early nineties recession in So. Cal.? Better yet, what were the GRMs in the 70s? Also, don’t forget – when markets fall from a great over-priced height, they *always* overshoot to below the long-term trend-line before going back to it. Between overshooting to the downside and the effects of a recession, some in the most over-priced areas may feel lucky if they only get a 50% haircut.
