Rents going up

[sdrealtor]

Anyone else see the latest rent survey results in the fishwrap today? Looks like rents are up nearly 3% in 6 months. If prices go down 5 to 10%/year and rents go up 5%/year, while interest rates stay low we may actually get through this mess faster than we think.

[kev374]

not in my neighborhood of South Orange County, apartment complexes are raising rents 8% but there are tons of properties coming up on Craigslist for bargain prices, CL is a really good resource to find properties from *individuals* who are generally more motivated to price aggressively 😉

[PadreBrian]

Apartments are up. Foreclosed people and smart people are renting.

BUT, be sure not to rent from a flipper. you’ll be out on your ars without a home when the sheriff pulls up.

[PadreBrian]

How to tell: look up address on zillow and make sure the house wasn’t bought in the last 2 years.

[Diego Mamani]

sdr,
The impression that I have is that apartment rents are going up in large cities. However, where I live (L.A.-Ventura County Line), rents of SFRs and townhomes have been flat for the last two years.

Many of the houses that I see “for lease” today around here, are “also for sale”. The funny thing is that asking prices for these houses are in excess of 280 times the monthly rent. I think the historical ratio is about 120 times! Well, at least prices are not over 300 times monthly rates as they were only two years ago.

[cr]

srd – what do you mean by get through this?

If those rates hold constant and rents rise enough to meet average home prices say in 2 years, incomes will still be too low to support those prices.

It’ll be interesting.

[JWM in SD]

Oh yes, but everyone is going to get a CLI bump of 5 to 10% a year so that wages will “catch up”.

Yeah, right….pushing on a string….

[an]

“If those rates hold constant and rents rise enough to meet average home prices say in 2 years, incomes will still be too low to support those prices.”

That would definitely be an interesting situation. Rent goes way up and income stay flat. That might be a perfect storm for massive out migration.

[4plexowner]

Let’s see –

5 to 6000 more condos downtown in the next 2 years

20 to 40% of current MLS inventory is vacant

net outmigration of people from San Diego – UHaul ratio at 4 to 1

Please explain to me how rents are going to go up?

Always remember: housing that won’t sell to a homeowner becomes a rental – the only exception to this rule that I am aware of is the downtown towers that were held vacant (except for one tenant) for ten years

Another ‘always remember’: prices are set at the margin

[HLS]

4plex.. Is there a site that actually posts “U-Haul ratios” ?
There are some other parts of the country that I’d like to see the ratio for. TIA

[4plexowner]

The UHaul ratio is actually defined as the ratio of the cost to move from San Diego to city X vs the cost of moving from city X to San Diego – so, without naming city X we can’t really talk about the UHaul ratio

The 4 to 1 ratio is for Austin, TX if I remember correctly – I’ve gotten tired of trying to educate people about the real estate debacle currently unfolding so I don’t always provide detailed data when I post and I don’t post very often anymore (got burned out trying to educate trolls and idiots – and I bet none of them bought any silver or gold based on my recommendations (numerous) when silver was under $7 and gold was around $500)

A quick google didn’t find any sites for UHaul ratios but you can determine the current value for yourself

Call UHaul on the phone and price a truck from city x to San Diego and vice-versa – please let us know if you find ANY UHaul ratios that indicate a migration into San Diego

[Fearful]

I could see rental rates rising in the near term as houses are forced to vacancy in the foreclosure process, or otherwise as unsold houses sit vacant.

I also surmise that foreclosed-upon people will be more likely to pursue renting an apartment than a house similar to what they owned, thus putting upward pressure on apartment rents.

As the city continues to suffer housing related job losses, it is hard to imagine apartment rents not coming down.

[HLS]

Fearful…
the inventory isn’t going to vanish. 1,000 foreclosed homes will seek a level until they are bought.
The lender’s do not want the inventory sitting vacant, nor boarded up creating blight.
The also generally don’t speculate on if/when the market will recover so they aren’t going to wait.

Since it’s going to be different this time (!!)
Perhaps REO’s will become landlords and start renting thousands of properties out. It’s always easier to sell to an investor when you have a tenant.

Either buyer A who was foreclosed on will buy Buyer B’s foreclosed house through creative financing, or the foreclosed party will look to rent somewhere.
Assuming that 1000 people want to stay in the area, they will be playing musical houses, and end up 1000 different addresses. Many times only one spouse was on a loan and the other can still qualify. They can buy a similar house and owe 30%-40% less and with more manageable payments.

There will be cases where a house from a private party will be competitive with an apartment. They will be desperate.

Unless they start burning houses down to create a shortage, there is plenty of inventory. Many People STILL cannot buy until it becomes affordable. Somebody will figure out the rental angle, so it will create some cashflow.

I think that the majority of houisng related job losses have already happened. Many real estate agents and mortgage people are commission only, with other incomes while theyt are ‘waiting” or they have already left.

4plex,, there used to be an index of number of U-Hauls headed into town and outta town. I thought that was the 4 to 1 you were referring to. I haven’t heard the financial angle, thx.

[no_such_reality]

I suspect that last bull trap of the decline is going to be investors who think the property will cash flow only to discover there’s of flood of new landlords in the game.

[Author]

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