What’s an acceptable price-rent ratio in San Diego?

[SandraL]

Excellent! Thank you.

Last question, average rent is figured by average rent on a HOUSE of the similar bed/bad configuration or APARTMENT?

I assume house, but you know what they say about assuming….

[SDEngineer]

[quote=SandraL]Excellent! Thank you.

Last question, average rent is figured by average rent on a HOUSE of the similar bed/bad configuration or APARTMENT?

I assume house, but you know what they say about assuming…. [/quote]

You are correct – compare apples to apples. If you have a 3/2 condo with a carport and a patio, it will command less rent than a 3/2 house with a 2 car garage and a yard. Location also plays into it, of course.

The idea situation is to compare a model match (same floorplan, same area), but, of course, especially on houses, that will be difficult to do a lot of the time.

[SDEngineer]

[quote=SandraL]Excellent! Thank you.

Last question, average rent is figured by average rent on a HOUSE of the similar bed/bad configuration or APARTMENT?

I assume house, but you know what they say about assuming…. [/quote]

You are correct – compare apples to apples. If you have a 3/2 condo with a carport and a patio, it will command less rent than a 3/2 house with a 2 car garage and a yard. Location also plays into it, of course.

The idea situation is to compare a model match (same floorplan, same area), but, of course, especially on houses, that will be difficult to do a lot of the time.

[SDEngineer]

[quote=SandraL]Excellent! Thank you.

Last question, average rent is figured by average rent on a HOUSE of the similar bed/bad configuration or APARTMENT?

I assume house, but you know what they say about assuming…. [/quote]

You are correct – compare apples to apples. If you have a 3/2 condo with a carport and a patio, it will command less rent than a 3/2 house with a 2 car garage and a yard. Location also plays into it, of course.

The idea situation is to compare a model match (same floorplan, same area), but, of course, especially on houses, that will be difficult to do a lot of the time.

[SDEngineer]

[quote=SandraL]Excellent! Thank you.

Last question, average rent is figured by average rent on a HOUSE of the similar bed/bad configuration or APARTMENT?

I assume house, but you know what they say about assuming…. [/quote]

You are correct – compare apples to apples. If you have a 3/2 condo with a carport and a patio, it will command less rent than a 3/2 house with a 2 car garage and a yard. Location also plays into it, of course.

The idea situation is to compare a model match (same floorplan, same area), but, of course, especially on houses, that will be difficult to do a lot of the time.

[SDEngineer]

[quote=SandraL]Excellent! Thank you.

Last question, average rent is figured by average rent on a HOUSE of the similar bed/bad configuration or APARTMENT?

I assume house, but you know what they say about assuming…. [/quote]

You are correct – compare apples to apples. If you have a 3/2 condo with a carport and a patio, it will command less rent than a 3/2 house with a 2 car garage and a yard. Location also plays into it, of course.

The idea situation is to compare a model match (same floorplan, same area), but, of course, especially on houses, that will be difficult to do a lot of the time.

[SDEngineer]

[quote=ybitz]Even in Mira Mesa (definitely not high end), the ratio seems to be over 200.

Ratio: 217
$1860 rent [craigslist]
http://sandiego.craigslist.org/csd/ap/1177483541.html
$404,500 price[zillow]
http://www.zillow.com/homedetails/11559-Polaris-Dr-San-Diego-CA-92126/16819385_zpid/

Ratio: 211
$1900 rent [craigslist]
http://sandiego.craigslist.org/csd/apa/1177473494.html
price[zillow]
$401,500 price [zillow]
http://www.zillow.com/homedetails/7462-Dancy-Rd-San-Diego-CA-92126/16834149_zpid/

And I thought the real estate bubble had burst in the non-high-end areas such as mira mesa. How come we’re not seeing ratios in the more reasonable 150 range?[/quote]

Zestimate is garbage. They’re pretty consistently well higher than what the market price is these days, and have been since the crash started – their model appears to be quite laggy.

If you’ll look on the MLS, you’ll find comparable area/size 4/2’s going in the 320-350ish range. The highest a 4/2 of that size has closed in the past couple of months is at 375K.

Here’s a close from 3/30 of this year – similar size, area (north of Mira Mesa Blvd), lot, and configuration. Sold for 325K.

http://www.sdlookup.com/MLS-090004996-8293_Calle_Calzada_San_Diego_Ca_92126

That takes it down to about 160-180x. Not investment territory, but not terrible.

But I don’t think MM’s SFR’s have bottomed quite yet. However, they’re pretty clearly a lot closer to the bottom than the ritzier areas. The areas furthest from the city core have come down farther (San Marcos, East County, etc).

[SDEngineer]

[quote=ybitz]Even in Mira Mesa (definitely not high end), the ratio seems to be over 200.

Ratio: 217
$1860 rent [craigslist]
http://sandiego.craigslist.org/csd/ap/1177483541.html
$404,500 price[zillow]
http://www.zillow.com/homedetails/11559-Polaris-Dr-San-Diego-CA-92126/16819385_zpid/

Ratio: 211
$1900 rent [craigslist]
http://sandiego.craigslist.org/csd/apa/1177473494.html
price[zillow]
$401,500 price [zillow]
http://www.zillow.com/homedetails/7462-Dancy-Rd-San-Diego-CA-92126/16834149_zpid/

And I thought the real estate bubble had burst in the non-high-end areas such as mira mesa. How come we’re not seeing ratios in the more reasonable 150 range?[/quote]

Zestimate is garbage. They’re pretty consistently well higher than what the market price is these days, and have been since the crash started – their model appears to be quite laggy.

If you’ll look on the MLS, you’ll find comparable area/size 4/2’s going in the 320-350ish range. The highest a 4/2 of that size has closed in the past couple of months is at 375K.

Here’s a close from 3/30 of this year – similar size, area (north of Mira Mesa Blvd), lot, and configuration. Sold for 325K.

http://www.sdlookup.com/MLS-090004996-8293_Calle_Calzada_San_Diego_Ca_92126

That takes it down to about 160-180x. Not investment territory, but not terrible.

But I don’t think MM’s SFR’s have bottomed quite yet. However, they’re pretty clearly a lot closer to the bottom than the ritzier areas. The areas furthest from the city core have come down farther (San Marcos, East County, etc).

[SDEngineer]

[quote=ybitz]Even in Mira Mesa (definitely not high end), the ratio seems to be over 200.

Ratio: 217
$1860 rent [craigslist]
http://sandiego.craigslist.org/csd/ap/1177483541.html
$404,500 price[zillow]
http://www.zillow.com/homedetails/11559-Polaris-Dr-San-Diego-CA-92126/16819385_zpid/

Ratio: 211
$1900 rent [craigslist]
http://sandiego.craigslist.org/csd/apa/1177473494.html
price[zillow]
$401,500 price [zillow]
http://www.zillow.com/homedetails/7462-Dancy-Rd-San-Diego-CA-92126/16834149_zpid/

And I thought the real estate bubble had burst in the non-high-end areas such as mira mesa. How come we’re not seeing ratios in the more reasonable 150 range?[/quote]

Zestimate is garbage. They’re pretty consistently well higher than what the market price is these days, and have been since the crash started – their model appears to be quite laggy.

If you’ll look on the MLS, you’ll find comparable area/size 4/2’s going in the 320-350ish range. The highest a 4/2 of that size has closed in the past couple of months is at 375K.

Here’s a close from 3/30 of this year – similar size, area (north of Mira Mesa Blvd), lot, and configuration. Sold for 325K.

http://www.sdlookup.com/MLS-090004996-8293_Calle_Calzada_San_Diego_Ca_92126

That takes it down to about 160-180x. Not investment territory, but not terrible.

But I don’t think MM’s SFR’s have bottomed quite yet. However, they’re pretty clearly a lot closer to the bottom than the ritzier areas. The areas furthest from the city core have come down farther (San Marcos, East County, etc).

[SDEngineer]

[quote=ybitz]Even in Mira Mesa (definitely not high end), the ratio seems to be over 200.

Ratio: 217
$1860 rent [craigslist]
http://sandiego.craigslist.org/csd/ap/1177483541.html
$404,500 price[zillow]
http://www.zillow.com/homedetails/11559-Polaris-Dr-San-Diego-CA-92126/16819385_zpid/

Ratio: 211
$1900 rent [craigslist]
http://sandiego.craigslist.org/csd/apa/1177473494.html
price[zillow]
$401,500 price [zillow]
http://www.zillow.com/homedetails/7462-Dancy-Rd-San-Diego-CA-92126/16834149_zpid/

And I thought the real estate bubble had burst in the non-high-end areas such as mira mesa. How come we’re not seeing ratios in the more reasonable 150 range?[/quote]

Zestimate is garbage. They’re pretty consistently well higher than what the market price is these days, and have been since the crash started – their model appears to be quite laggy.

If you’ll look on the MLS, you’ll find comparable area/size 4/2’s going in the 320-350ish range. The highest a 4/2 of that size has closed in the past couple of months is at 375K.

Here’s a close from 3/30 of this year – similar size, area (north of Mira Mesa Blvd), lot, and configuration. Sold for 325K.

http://www.sdlookup.com/MLS-090004996-8293_Calle_Calzada_San_Diego_Ca_92126

That takes it down to about 160-180x. Not investment territory, but not terrible.

But I don’t think MM’s SFR’s have bottomed quite yet. However, they’re pretty clearly a lot closer to the bottom than the ritzier areas. The areas furthest from the city core have come down farther (San Marcos, East County, etc).

[SDEngineer]

[quote=ybitz]Even in Mira Mesa (definitely not high end), the ratio seems to be over 200.

Ratio: 217
$1860 rent [craigslist]
http://sandiego.craigslist.org/csd/ap/1177483541.html
$404,500 price[zillow]
http://www.zillow.com/homedetails/11559-Polaris-Dr-San-Diego-CA-92126/16819385_zpid/

Ratio: 211
$1900 rent [craigslist]
http://sandiego.craigslist.org/csd/apa/1177473494.html
price[zillow]
$401,500 price [zillow]
http://www.zillow.com/homedetails/7462-Dancy-Rd-San-Diego-CA-92126/16834149_zpid/

And I thought the real estate bubble had burst in the non-high-end areas such as mira mesa. How come we’re not seeing ratios in the more reasonable 150 range?[/quote]

Zestimate is garbage. They’re pretty consistently well higher than what the market price is these days, and have been since the crash started – their model appears to be quite laggy.

If you’ll look on the MLS, you’ll find comparable area/size 4/2’s going in the 320-350ish range. The highest a 4/2 of that size has closed in the past couple of months is at 375K.

Here’s a close from 3/30 of this year – similar size, area (north of Mira Mesa Blvd), lot, and configuration. Sold for 325K.

http://www.sdlookup.com/MLS-090004996-8293_Calle_Calzada_San_Diego_Ca_92126

That takes it down to about 160-180x. Not investment territory, but not terrible.

But I don’t think MM’s SFR’s have bottomed quite yet. However, they’re pretty clearly a lot closer to the bottom than the ritzier areas. The areas furthest from the city core have come down farther (San Marcos, East County, etc).

[(former)FormerSanDiegan]

[quote=SDEngineer]

I think the historical average for San Diego is somewhere around 150-160
[/quote]

In the last cycle, Clairemont bottomed at a ratio of about 150x in 1995-1996, so I doubt any long-term average gets that low.
(150K house, 1000 monthly rent)

As for the ability to cash flow with reasonable down payments (e.g. 25%) at a specific level of this ratio, it depends directly on interest rates (as SDEngineer pointed out above). So there is no set number that makes sense in all interest rate environments.
Believing that there is or should be a fundamental number for this metric would be to ignore one of the largest expenses (at least in the initial years) in real estate investment (The mortgage payment).

At the 8 % rates we saw in the mid 1990s one couldn’t really cash flow with the ratio at 150x.

With rates at 5% or so you COULD have positive cash flow with 20-25% down and a ratio of 150x.

[(former)FormerSanDiegan]

[quote=SDEngineer]

I think the historical average for San Diego is somewhere around 150-160
[/quote]

In the last cycle, Clairemont bottomed at a ratio of about 150x in 1995-1996, so I doubt any long-term average gets that low.
(150K house, 1000 monthly rent)

As for the ability to cash flow with reasonable down payments (e.g. 25%) at a specific level of this ratio, it depends directly on interest rates (as SDEngineer pointed out above). So there is no set number that makes sense in all interest rate environments.
Believing that there is or should be a fundamental number for this metric would be to ignore one of the largest expenses (at least in the initial years) in real estate investment (The mortgage payment).

At the 8 % rates we saw in the mid 1990s one couldn’t really cash flow with the ratio at 150x.

With rates at 5% or so you COULD have positive cash flow with 20-25% down and a ratio of 150x.

[(former)FormerSanDiegan]

[quote=SDEngineer]

I think the historical average for San Diego is somewhere around 150-160
[/quote]

In the last cycle, Clairemont bottomed at a ratio of about 150x in 1995-1996, so I doubt any long-term average gets that low.
(150K house, 1000 monthly rent)

As for the ability to cash flow with reasonable down payments (e.g. 25%) at a specific level of this ratio, it depends directly on interest rates (as SDEngineer pointed out above). So there is no set number that makes sense in all interest rate environments.
Believing that there is or should be a fundamental number for this metric would be to ignore one of the largest expenses (at least in the initial years) in real estate investment (The mortgage payment).

At the 8 % rates we saw in the mid 1990s one couldn’t really cash flow with the ratio at 150x.

With rates at 5% or so you COULD have positive cash flow with 20-25% down and a ratio of 150x.

[(former)FormerSanDiegan]

[quote=SDEngineer]

I think the historical average for San Diego is somewhere around 150-160
[/quote]

In the last cycle, Clairemont bottomed at a ratio of about 150x in 1995-1996, so I doubt any long-term average gets that low.
(150K house, 1000 monthly rent)

As for the ability to cash flow with reasonable down payments (e.g. 25%) at a specific level of this ratio, it depends directly on interest rates (as SDEngineer pointed out above). So there is no set number that makes sense in all interest rate environments.
Believing that there is or should be a fundamental number for this metric would be to ignore one of the largest expenses (at least in the initial years) in real estate investment (The mortgage payment).

At the 8 % rates we saw in the mid 1990s one couldn’t really cash flow with the ratio at 150x.

With rates at 5% or so you COULD have positive cash flow with 20-25% down and a ratio of 150x.

[Author]

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