question about rents

[kev374]

have rents ever gone down in SoCal? For instance in the 1990-1996 decline did rents go down as well? I can’t seem to find any information on this.

[an]

According to Rich’s post a few days ago, rent did not go down. Rent only go down if it out pace inflation, which I don’t think it did. At least not in SD. It basically kept pace w/ income and inflation. a 2bed/2bath apartment in Mira Mesa around 1998 was about $900/month. A mortgage of a 1500 sq-ft 4bed/2bath house in Mira Mesa was about $1000/month in 1998. Just to give some perspective as to how low house price can go in regards to rent.

[no_such_reality]

If you look at Rich’s chart from the other day, rents decreased in 1995. They were essentially flat in 1993-1995.

Since his chart doesn’t say “real” dollars, it’s likely they are nominal dollars as a percentage of the 1985 nominal price.

If those are nominal ratios, then over the period, of 1985-1997, rent is basically flat or slightly behind inflation. In the housing run up, it got ahead of inflation, and then inflation caught up.

The rent increases in ’89 to ’91 look huge however inflation was in the 5%+ range.

[powayseller]

Nominal rents just keep going up. They went down slightly in the bimonthly BLS owner’s equivalent rent series only 3 times, and that was during the spring of 1984 – 1986. Otherwise, it just keeps growing. Jan 1986, 138.0 to March 1986, 136.6, but back up to 138.7 in May 1986.

Only 1 decrease in the semiannual series started in 1988: H2 1994 181.7, to H1 1995 179.5, but back up in H2 1995 to 181.6.

[Anonymous]

Per the Bureau of Labor Statistics (producers of the CPI), in the last downturn in San Diego (early/mid '90s), (nominal) rents peaked in '92, decreased in '93, decreased again in '94.  Only in '95 did rents increase, and only in '96 did they finally achieve/beat '92 levels.

http://data.bls.gov/PDQ/servlet/SurveyOutputServlet;jsessionid=f0306bfc12f0$2B$3F$1

I fully expect real rents will come down in this downturn, too.

 

[gold_dredger_phd]

My rent was increased by 25% from last year. I live in Carmel Valley.

[(former)FormerSanDiegan]

g_d_p –

25% that’s crazy, must be more to the story …

Was your rent previously unusually low ?
Was there a new owner ?
Did you acquire a pet ?
Did you take up smoking ?
Did you add people to the lease ?
How does your new rent compare to other options in the market ?

[PerryChase]

Yeah, 25% increase is crazy. Time to move.

[an]

That’s the beauty of renting, if you don’t like the rent price you can just move, as long as there are other rental unit going for less.

25% is crazy unless something changed.

[kev374]

25%!!! whoa! my rent increased 8.5% from last year and I thought that was outrageous! I live in Lake Forest (South OC). I did renew my lease for another year since I didn’t want to deal with the hassel of moving 🙁 I’m counting on home prices coming down A LOT in 2007 at least to 2002 levels…may happen!

[gold_dredger_phd]

There was no change in the lease, number of people in the place or taking up smoking. The other apartments near there charge more than they do, so they probably thought it was time for an increase.

I think they only want dual income professionals living there.

It’s near a school and in a good school district, so they have families moving in. The houses around this area all have asking prices of at least 800K, so they feel they can justify the rent.

[no_such_reality]

What’s the rent at?

25% sounds horrible, but if comparable homes are selling in the neighborhood at $800K, then anything south of $3500 doesn’t look so bad.

[davelj]

It wouldn’t surprise me if rents flatten out over the next few years, especially downtown. But rents rarely actually decline in a decent market (in nominal terms) and if they do it’s under extreme duress. For example, rents plummetted (like 30%+ in some cases) in Texas back in the mid-80s after the oil bust. But it’s hard to envision rents here going down more than a couple of percentage points unless something really dramatic occurs.

[(former)FormerSanDiegan]

g_d_p –

Sounds like your rent is now comparable to other places in your area. So, I would say you were getting a 25% discount previously, rather than a 25% increase. It’s only semantics, but hey maybe it’ll make you feel better about it.

(Doesn’t seem to take the sting off the increase when you write the check, though does it ?)

[Author]

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