I like the “Mesa Corollary,” It fits into what I was trying to say about the mid level rental market.
I still believe in CA, I’ve been hearing for 40 years that everyone will leave, not that Econ’s argument is a cogent one as always, just that I’ve always seen it bounce back, I feel it always will. I also agree that other states have advantages, but i don’t want rental property too far away because I plan on managing it myself.
I’m skeptical of Mo Val, jobs are the only reason to live there and that can change, so there’s more speculation in that area.
Here’s why I am the Temec cheerleader, Vegas and Pheonix prices without the drive. Two examples, one sfr and one condoish apartmentish place, the links may not last, they were listed today, unlikely they will last the weekend (another reason I am still sidelined)
The SFR’s fair rent is about 1400-1500 and the condo is about 1100-1300
Both are about 30 cents on the dollar from peak, the SFR is actually at it’s 1993 price. It is appealing to dog owners vs the condo, but lacks the amenities, it also has no hoa.
The condo will have hoa on the negative, however, pools, a gym, water, landscaping and trash, you have to factor that in, plus it’s newer. Neither are out on the outskirts, both are right in the middle of the most expensive zip code of the region with the best schools, they are the cheapest and smallest in that zip code, something I look for in a rental.
Just two examples of Pheonix and Vegas in your own backyard and a reason I feel the bottom in this area is upon us and a better deal than things in neigboring states. Neither of these are in a barrio, they are the cheapest way into top noth schools as well and in low crime areas with minimal rental stock.
The SFR looks and costs the same as my first house that I bought almost 20 years ago. Re-read that last sentence. For a good decade i kicked myself for selling that starter house and not making it a rental and it feels like i just stumbled onto a time machine. It is also fair to mention that when I bought that first house i think the interest rate was 8%.
The P&I for the entire $135k is $725, humor me for a minute, this falls into the affordability argument. A school teacher with a stay at home wife and a couple of babies can qualify for and comfortably afford that house, very comfortably. How 1950’s is that? I checked the comps, at peak they broke 400k for the sfr, that is no 400k house but imho, it’s no 135k house either, this is why I think it’s overshot the bottom because it costs about twice as much to rent than to buy after the tax deduction, when is the last time you saw that?
