rental market update

[gzz]

Someone I know is looking for a 1/1. Perfect credit, 100k+ income, references etc. Less than 1 in 10 of the listings he contacts even get back to him!

San Diego’s increases are being matched in other nice cities that used to be cheap. From ZH:
—
Take Carmen Santiago, a dental assistant, who was paying $1,479 a month for a two-bedroom apartment in Tampa, gave notice to her landlord in March after the rent jumped by $300.

The mother of two profiled by Bloomberg, then racked up more than $1,000 on non-refundable application fees that she handed to about 10 landlords, sometimes getting in line without even seeing the properties first. A couple days before her lease expired in June, Santiago took a last-ditch drive. She visited five apartment complexes, all filled. The sixth, a vast complex with 22 buildings, had one unit available.

The two-bedroom cost more than $1,900 a month, including a mandatory cable bill — more than Santiago would have paid if she renewed her old lease. But in the end she paid, even though she could hardly afford it before it was gone.

“I didn’t know how hard it was to find something,” Santiago said. “Looking back, maybe I should have stayed.”

And as long as people continue to willingly pay the exorbitant rates that landlords demand, the pricing insanity will remain.

Yet nowhere is the pricing surge greater than in the Sun Belt cities that have seen an influx of arrivals from the pandemic amid an exodus from progressive liberal bastions as New York and San Francisco. The Phoenix area had the country’s biggest increases in rents for single-family houses in June, with an almost 17% surge from a year earlier, according to data released this week from Corelogic. It was followed by Las Vegas, with a 12.9% gain; Tucson, Arizona, at 12.5%; and Miami, up 12.4%.

[carlsbadworker]

So what explains all these?
1. The number of occupied U.S. rental-apartment units jumped by about half a million in the second quarter, the biggest annual increase in data going back to 1993, according to industry consultant RealPage Inc. Occupancy last month hit a new high of 96.9%.
2. Eviction bans also are playing a role in keeping the market tight, because about 6% of tenants are normally forced to vacate each year.
3. Renters now crowding the market have higher salaries, in part, because many of them, in normal times, would be buying homes instead. The average income for new lease signers in July hit a record of $69,252, according to RealPage, which captured data for professionally managed buildings. Year-to-date, their incomes shot up 7.5%.
4. Nicolle Crim, vice president of Watson Property Management’s Central Florida division, says she wished she had more to offer. But the for-sale market is so strong that owners are selling for big profits. As a result, Watson now manages about 4,000 single-family home rentals for individual owners, down by a third since the pandemic began, she said.

All these points to there’re less supplies for rental (landlord selling, eviction ban), which drives up the occupancy and qualified income to rent.

So all the suppliers go to new home ownership, despite record price increase? Then why would the article says “Renters now crowding the market have higher salaries, in part, because many of them, in normal times, would be buying homes instead.” How come we suddenly have so many eligible home buyers?

https://www.census.gov/housing/hvs/files/currenthvspress.pdf

[The-Shoveler]

Escape LA is a real thing, probably SF as well.

[sdrealtor]

[quote=carlsbadworker]So what explains all these?
1. The number of occupied U.S. rental-apartment units jumped by about half a million in the second quarter, the biggest annual increase in data going back to 1993, according to industry consultant RealPage Inc. Occupancy last month hit a new high of 96.9%.
2. Eviction bans also are playing a role in keeping the market tight, because about 6% of tenants are normally forced to vacate each year.
3. Renters now crowding the market have higher salaries, in part, because many of them, in normal times, would be buying homes instead. The average income for new lease signers in July hit a record of $69,252, according to RealPage, which captured data for professionally managed buildings. Year-to-date, their incomes shot up 7.5%.
4. Nicolle Crim, vice president of Watson Property Management’s Central Florida division, says she wished she had more to offer. But the for-sale market is so strong that owners are selling for big profits. As a result, Watson now manages about 4,000 single-family home rentals for individual owners, down by a third since the pandemic began, she said.

All these points to there’re less supplies for rental (landlord selling, eviction ban), which drives up the occupancy and qualified income to rent.

So all the suppliers go to new home ownership, despite record price increase? Then why would the article says “Renters now crowding the market have higher salaries, in part, because many of them, in normal times, would be buying homes instead.” How come we suddenly have so many eligible home buyers?

https://www.census.gov/housing/hvs/files/currenthvspress.pdf%5B/quote%5D

Record low interest rates are driving that

[gzz]

I am steering this person to the purchase market.

If you have 20k for a down payment (he does), you can get a 380k mortgage with payments of only about $1900. Of that, $500 is paying down balance and $300-350/mo off your taxes, means the true cost to buy to live in a 400k condo is only about $1100 + HOA. That is way better than renting, especially in this market.

And if any type of downpayment waiver or subsidy plan emerges, watch out as we zoom into bubble prices.

[sdrealtor]

Where will Carmen San Diego live?

[sdrealtor]

Home

A couple weeks ago was driving back through Vista in an area that’s history is rough as a borderline hood gang area. Saw this big new modern apartment complex just being finished. They have balls to do this there but it could jump start gentrification there. Market forces at work

[The-Shoveler]

IMO What is happening in Carlsbad is spreading north and east very quickly.
Oceanside coastal area is almost completely unrecognizable from a few years earlier.

[Coronita]

Stealing this post from you, AN…

But I agree… $4000/month for a 1400sqft in Mira Mesa is insane..

https://www.zillow.com/homedetails/7368-New-Salem-St-San-Diego-CA-92126/2068740702_zpid/

[Coronita]

Or how about $2500/month for a 1/1 in Mira Mesa…lol…

https://sandiego.craigslist.org/csd/apa/d/san-diego-1bed-1bath-spacious-mira-mesa/7369088187.html

[Coronita]

Pretty soon generating $100k+/year in positive cash flow will be a walk in the park for most people. lol.

Who needs to work…lol…

[sdrealtor]

[quote=The-Shoveler]IMO What is happening in Carlsbad is spreading north and east very quickly.
Oceanside coastal area is almost completely unrecognizable from a few years earlier.[/quote]

So the Vista Village area has upgraded and gotten kinda hip the last few years with craft breweries and restaurants. But neighborhoods nearby still are what they are. That project is very bold move

[gzz]

The 4k/mo MM house looks great, lots of things to give it a premium: cul de sac, views, hot tub, yard with plenty of brown grass, interior looks perfect.

The condo however seems tiny and bland for 2500.

[Coronita]

[quote=gzz]The 4k/mo MM house looks great, lots of things to give it a premium: cul de sac, views, hot tub, yard with plenty of brown grass, interior looks perfect.

The condo however seems tiny and bland for 2500.[/quote]

Who cares what it looks like as long as it rents out. It’s not like the owner is going to live there.

One step closer to financial independence is the only thing that should matter.

[flyer]

Agree San Diego rentals are fantastic, and great that they will also benefit our kids.

It’s also nice to be able to give back in life, and we have a few older tenants in some really nice locations who have been with us for years, and, due to their circumstances, we’ve basically frozen their rents for life, which has kept them in a home. Imo, that’s another good reason for owning investment properties. Not only can you create wealth for yourself and your family, but you can also give it away as you see fit.

[Author]

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