Demand for rental housing

[carlislematthew]

I agree. I didn’t say they were being realistic – people are irrational beings. Some landlords would rather have a property sit empty for 6 months than rent it for $200 a month less, but instead rent it immediately. The math just doesn’t justify that, but we’re dealing with people here…

[carlislematthew]

I agree. I didn’t say they were being realistic – people are irrational beings. Some landlords would rather have a property sit empty for 6 months than rent it for $200 a month less, but instead rent it immediately. The math just doesn’t justify that, but we’re dealing with people here…

[Gone to Colorado]

PD I am one of those O5s you describe in your post. We are moving back to San Diego this summer. The only way I (and most of my fellow officers) will pay more is for the privilege of living somewhere where we can bike or walk to work, i.e. Coronado, Point Loma, etc. Other costs like car insurance and gasoline are far lower and partially compensate for the increased rent. However, having children frequently causes us to rule out the smaller living arrangements of houses and condos in Coronado.

My intent is to pay up to $2800 a month to live in Coronado, which is more than the monthly allowance. Any higher and we will live off the island and go with the commute.

I agree that officers as a group will balk at higher rents. My question is this: Are we recognized by landlords as reliable renters because of our secure jobs and other factors? I ask because for most of my career this was the impression I got. In the late 90’s, I sensed a shift toward civilians who were making six figure incomes in tech. We were turned down for a rental in Coronado in Nov 2000 in favor of a couple who had better-paying jobs in the tech sector. Within a year, they broke their lease and moved out (perhaps because of the tech crash?), while we did not leave Coronado until mid-2002. After four years, I get the impression that things may once again be favorable to military renters. Opinions?

[PD]

You might have a hard time finding something with more than one bathroom for $2,800 but there are a few. Rents are much cheaper in IB but the schools are bad. However, if you work on Coronado, you have a good reason for requesting that your kids go to school on the island (not a sure a thing).
I think military are regarded in a positive light. However, we had a verbal agreement to rent a house here and the landlord ended up renting to a civilian because their last renter received new orders after only 10 months and moved. They were angry that they had to let the renter go because of the military clause and did not want that to happen again.

[4plexowner]

My rental units were not high-end houses like you will be looking for. I rented apartments and houses in the $600-2100/month range.

My favorite tenants were military people. I rented a Normal Hts house to a Navy seal and his wife and I rented apartments in IB and Pt Loma to any number of enlisted people.

I knew that these people were receiving a big chunk of money every month that was specifically for housing.

The housing allotment allowed them to pay rent and I felt like I had Uncle Sam covering my back if my military tenant caused any problems (hopefully not an issue when renting to officers).

Only once did I have to threaten to call an enlisted person’s chain of command and the threat accomplished my objective.

[Bugs]

The median wages would have to decline by a proportionate amount to affect rental pricing. I don’t think there are any high-wage occupations that are gearing up to replace the lost RE-related occupations. Still, San Diego County still has a somewhat diverse economy that does include a larger-than-average share of government and government related occupations. Our economy didn’t revolve around real estate prior to 2000 so – barring the world-wide meltdown some of you guys are projecting – I think there will still be life after RE. I think the median income figure will remain more or less stable even if the value of the dollars that comprise those wages declines.

While we’re on the subject of short-temt timing, I think the meltdown in sale prices will occur, but I think it’ll take longer than just a couple years. Bear in mind that a mortgagee who knows how to abuse the system can forestall foreclosure by as long as 12 months if they want to badly enough.

[sdrealtor]

From what I have seen rentals could rise modestly but that wont be the problem. The problem will be finding a good one. Rising demand will scoop up the good properties but there just isnt alot of room for rents to skyrocket.

[powayseller]

What is causing the rising demand of rentals?

Are speculators selling their rentals, decreasing the supply?

Are people priced out of the market, and renting instead? Is that offset somewhat by the out migration?

My friend, a realtor,is involved in 5 transations, and he told me that in each case, the seller is planning to leave San Diego if the house sells.

OT: Today, I saw a glut of Open House signs at several intersections of Scripps Poway Parkway. There were 6-8 signs at 3 intersections. I’ve never seen anything like this. Another thing is that some of the OpenHouse signs now have flags and balloons attached. I guess you have to try to stand out…

[FormerOwner]

I just sold my house in Temecula and am now renting a similar house for about 1/2 of what it would cost to purchase it at current market prices. I put all of my tax-free profit in CD’s getting 5% interest – guaranteed – the interest will pay almost 1/2 my rent. I think the only logical reason one would buy a house at 2X the cost of renting is that they are expecting further appreciation and/or don’t want to be priced out of the market.

Another point: it seems to me that the people buying the large upscale houses in the Temecula Valley now are either (1)extended families with 3-4 wage earners or (2)investors who rent them out at a huge loss or (3) retired people moving from Orange County or San Diego who see Temecula prices as cheap.

There are all these 3000-4000 square foot houses going for 600K-700K and not much of a local job market that pays anywhere near enough to afford the housing. Gas prices and traffic jams no longer make it attractive to commute 100+ miles per day either. If you have 4 people workikng locally earning 30K-50K/year each, they can afford to 100% finance a 600K house and pay the $10K/year in property taxes as well. Or they can rent the same house for 1/2 the monthly cost and no risk. But owning a home is the american dream, so they choose to buy rather than rent. As long as there are enough of these people and they don’t get in over their heads, they can keep the housing market going. As for the investors…I haven’t quite figured out why there are soooooo many non-owner occupied houses around here. A lot of them are vacant – no one wants to rent them even at 1/2 the cost of owning. Things were getting too weird for me and I figured it was high time to cash in on what I feel is a once in a lifetime chance to make a a huge tax free profit. I don’t know what’s going to happen from here, but right now the only place I’d put my money is FDIC insured CD’s – period. I figure it’ll be 5+ years before I buy a house again, if ever. It’ll take a long time for all of the excesses of the market to work themselves out and I don’t want any part of the process!

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