I’ve mentioned this before, but the whole situation with rents being MORE expensive than a mortgage with 20% down will make housing stable or up until rents correct.
I just can’t see any reason for housing to pull back until this changes since people will do the same analysis as AJ and see that they can live in a much nicer home and with the tax break, the cost to own is cheaper than renting.
Interest rates are nil so cash in the bank is not making much and stocks are risky if you plan to buy a home…
Of course, you need to do your own analysis based on your own situation of where you live and how much rent you are paying now (eg: can’t compare a bachelor studio in the hood with a 5 bedroom home in a nice area, etc…), so this isn’t a blanket statement, but rents are so expensive now. It also just sucks to get a 5-10% increase in rent every year that at the end, you buy to not be pissed off. I think rents around me are up like $800/month from just 3 years ago…insane.
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This week, the Marcus and Millichap brokerage firm reported that the average rent in San Diego County was $1,630 a month, up 5.3 percent over the last year.
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Rents are definitely spiking,” said Stuart Posnock, owner of Garden Communities, where rents are generally rising 7 percent year-over-year.
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The situation is exacerbated because the new units coming online in San Diego tend to be high-end, with studio apartments commonly going for more than $2,000.
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Alan Nevin, apartment industry analyst at Xpera, said the county needs 15,000 to 20,000 new units each year to keep up with demand. Last year, the county approved 6,861 new residential units, nowhere close to that amount. That’s why, Nevin said, when a landlord raises the rent, the unit still gets snapped up if the existing tenant opts to leave.
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James Burrell, a broker at San Diego County Property Management, which leases about 250 single-family homes and apartments, said rents are increasing 5 to 10 percent at the residences he manages.
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