[quote=temeculaguy]Like AN, I also didn’t realize how low rent is compared to prices there, what would your place sell for CA renter?[/quote]
That’s a really tricky one right now, because the market is very distorted, IMHO. At the very peak (when we were first renting), our house would have sold for around $750K while our rent was originally $2,000 — a clear example of the price/rent disparity.
Right now, there is a model match with possible foundation and drainage problems that has been listed in the mid-500s for quite a long time. OTOH, another model match **with additional bedroom, bathroom, pool, and expanded kitchen** in good shape just closed for over $800K! This last one really blew our minds because nothing around here has sold in the $800K range in a long, long time.
There are also other models that are fairly similar in size that have sold in the high $500K to high $600K range. If our house were listed today, it would probably sell very easily for $600K-$650K, and might even fetch in the low $700K range if a delusional buyer happend upon it — and there are more and more of these “delusional buyers” in the market these days.
“sdr” is right about rents going up since we moved here in 2004. We saw a really huge leap in rents in 2005/2006, right as the smart money was getting out at the top, and bubble-sitting, IMHO. Rents have come down somewhat in the past year, and the rental market is softer, but a smart LL can easily rent out a house here within a week if he/she prices it right. On the open market, ours would probably rent within a month at $2,400, currently. Maybe $2,500 with some luck, but I think the turnover is greater the higher the rent goes.
I should also add that we pay our rent in six-month increments and have put a few thousand into the house over the years (our choice). We are good to the LLs, and they are good to us. Technically, one might say we are paying more than $2,100 if one takes that into consideration. It seems we are one of the few fortunate ones, as we have a few friends who’ve had bad experiences with LLs being foreclosed on, among other problems.
In summary (Lord, I write too much!), with current potential rent at around $2,400, and prices at $650,000-ish, the price/rent ratio is still out of whack, but much better than it originally was at the peak.
