Will rent prices drop too??

[23109VC]

All this talk about prices falling more and more.

What happens to rent prices? Will those stay flat or drop too?

I bought. At a price that was decent, but if stuff keeps going down – I’ll be underwater. Not as bad as some…but if it gets totally horrible, and prices go to 50% of what they are now, i’d be very underwater.

so will rents stay the same or drop in line with prices of buying?

suppose rent is $2000. suppose the house cost $450-500k at the peak of the pricing… then suppose the prices fall through teh floor and the house will sell for $200k.

will it rent for $1000? or will rent stay the same.

reason I ask is that for a person who has a fixed rate and a mortgage payment that is affordable for them, and then they go negative on their house…and you can’t refi or sell it – you can either sit tight, make your payments, or just say F*** it and walk away. then you eat a foreclosure and your credit goes bye bye.

if to rent a comparable house would cost me almost as much as my current mortgage payment…then your monthly cash flow would not change by just walking and renting somethign else. if rents fall through the floor too..and you were 100-200k upside down in a house, it would almost seem stupid to stay in teh house just to salvage your credit.

i mean…if you buy a house, then lose 200k on it….and you could walk away, let the bank eat the loss…your credit goes to crap, but you could rent a comparable house for 1/4 of your mortgage payment.. or a 1/3 of your mortgage paymnet…you’d avoid being stuck with a house that is going to be negative for years and years, and you would be paying far less for monthly housing costs.

i mean, if a house goes negative by 10k, 20k, even 50k..it might be stupid to walk away and eat a foreclosure just b/c you are somewhat negative. ride it out.

but what do you do if you are 200k negative. is there ever a scenario where even though you CAN continue to make your mortage payment….where it makes financial SENSE to walk away and get foreclosed on and just rent something? is there some point where that is what you SHOULD do??

i’m just curious. i’m nowhere near that point, and have no way to know if i will ever get to that point..but i wonderd what you all think?

[HLS]

You aren’t going to see rents drop equivalent to Kansas City or Tulsa, or Spokane.
“Everyone wants to live here” remember ???

The affordable market rents in an area will determine the “value” of a house to a prudent investor, using a multiple of 100x-125x monthly gross rent.

The $2000 mo. rent makes that house worth $200K-$250K, it’s not worth $450K today because the value was $600K in 2005.

The biggest mistake that people are making today is using the bubble price as a measure. (Because it was $600k then, $450 must be a bargain)

Many investors aren’t “prudent” The stock market is a perfect example, except people find out that they are screwed much faster in the stock market.

I don’t care what 2000 prices were or what 2005 prices were. The “value” of a house today to an investor is based on rents today and upon the return that can be generated on the investment, also factoring in the loss of opportunity value on any down payment.

75% of landlords probably don’t know what a CAP rate is, yet call themselves “RE investors”

People bought stocks all the way down after the dot com bubble, thinking that they were cheap based on the peak prices. It didn’t work then and it won’t work now.

Many people are simply being ruled by fear or greed, without understanding how markets work.

I still predict that many properties will be short sales OR foreclosed on twice in the period from 2006-2011.

[HLS]

You aren’t going to see rents drop equivalent to Kansas City or Tulsa, or Spokane.
“Everyone wants to live here” remember ???

The affordable market rents in an area will determine the “value” of a house to a prudent investor, using a multiple of 100x-125x monthly gross rent.

The $2000 mo. rent makes that house worth $200K-$250K, it’s not worth $450K today because the value was $600K in 2005.

The biggest mistake that people are making today is using the bubble price as a measure. (Because it was $600k then, $450 must be a bargain)

Many investors aren’t “prudent” The stock market is a perfect example, except people find out that they are screwed much faster in the stock market.

I don’t care what 2000 prices were or what 2005 prices were. The “value” of a house today to an investor is based on rents today and upon the return that can be generated on the investment, also factoring in the loss of opportunity value on any down payment.

75% of landlords probably don’t know what a CAP rate is, yet call themselves “RE investors”

People bought stocks all the way down after the dot com bubble, thinking that they were cheap based on the peak prices. It didn’t work then and it won’t work now.

Many people are simply being ruled by fear or greed, without understanding how markets work.

I still predict that many properties will be short sales OR foreclosed on twice in the period from 2006-2011.

[HLS]

You aren’t going to see rents drop equivalent to Kansas City or Tulsa, or Spokane.
“Everyone wants to live here” remember ???

The affordable market rents in an area will determine the “value” of a house to a prudent investor, using a multiple of 100x-125x monthly gross rent.

The $2000 mo. rent makes that house worth $200K-$250K, it’s not worth $450K today because the value was $600K in 2005.

The biggest mistake that people are making today is using the bubble price as a measure. (Because it was $600k then, $450 must be a bargain)

Many investors aren’t “prudent” The stock market is a perfect example, except people find out that they are screwed much faster in the stock market.

I don’t care what 2000 prices were or what 2005 prices were. The “value” of a house today to an investor is based on rents today and upon the return that can be generated on the investment, also factoring in the loss of opportunity value on any down payment.

75% of landlords probably don’t know what a CAP rate is, yet call themselves “RE investors”

People bought stocks all the way down after the dot com bubble, thinking that they were cheap based on the peak prices. It didn’t work then and it won’t work now.

Many people are simply being ruled by fear or greed, without understanding how markets work.

I still predict that many properties will be short sales OR foreclosed on twice in the period from 2006-2011.

[HLS]

You aren’t going to see rents drop equivalent to Kansas City or Tulsa, or Spokane.
“Everyone wants to live here” remember ???

The affordable market rents in an area will determine the “value” of a house to a prudent investor, using a multiple of 100x-125x monthly gross rent.

The $2000 mo. rent makes that house worth $200K-$250K, it’s not worth $450K today because the value was $600K in 2005.

The biggest mistake that people are making today is using the bubble price as a measure. (Because it was $600k then, $450 must be a bargain)

Many investors aren’t “prudent” The stock market is a perfect example, except people find out that they are screwed much faster in the stock market.

I don’t care what 2000 prices were or what 2005 prices were. The “value” of a house today to an investor is based on rents today and upon the return that can be generated on the investment, also factoring in the loss of opportunity value on any down payment.

75% of landlords probably don’t know what a CAP rate is, yet call themselves “RE investors”

People bought stocks all the way down after the dot com bubble, thinking that they were cheap based on the peak prices. It didn’t work then and it won’t work now.

Many people are simply being ruled by fear or greed, without understanding how markets work.

I still predict that many properties will be short sales OR foreclosed on twice in the period from 2006-2011.

[HLS]

You aren’t going to see rents drop equivalent to Kansas City or Tulsa, or Spokane.
“Everyone wants to live here” remember ???

The affordable market rents in an area will determine the “value” of a house to a prudent investor, using a multiple of 100x-125x monthly gross rent.

The $2000 mo. rent makes that house worth $200K-$250K, it’s not worth $450K today because the value was $600K in 2005.

The biggest mistake that people are making today is using the bubble price as a measure. (Because it was $600k then, $450 must be a bargain)

Many investors aren’t “prudent” The stock market is a perfect example, except people find out that they are screwed much faster in the stock market.

I don’t care what 2000 prices were or what 2005 prices were. The “value” of a house today to an investor is based on rents today and upon the return that can be generated on the investment, also factoring in the loss of opportunity value on any down payment.

75% of landlords probably don’t know what a CAP rate is, yet call themselves “RE investors”

People bought stocks all the way down after the dot com bubble, thinking that they were cheap based on the peak prices. It didn’t work then and it won’t work now.

Many people are simply being ruled by fear or greed, without understanding how markets work.

I still predict that many properties will be short sales OR foreclosed on twice in the period from 2006-2011.

[patientlywaiting]

I follow the rental market Downtown San Diego and rents are already dropping. People are asking certain rents but the places are sitting.

Why not “pretend” to be a renter and check around. I found that if you pass up on a rental deal today, there’ll always be a better one tomorrow.

I think that rents are sticky like housing resale. People try to stand firm on the askings but they eventually go lower. If you look around the 92037 zip near UCSD, you’ll see rents and resale prices dropping as well.

Most people are in 1-year rental agreements so it might seem like rents are holding while for sale prices are dropping every day. I bet that people will be negotiating when their leases are up.

http://www.archstoneapartments.com/ is a good site to follow since you can rent online from them. They will play with prices up a little then down a little, but you will see the same/similar units sitting. When will they drop prices to fill the vacant units?

I know that certain sub-markets, like 4S, Del Sur, Carmel Valley, Del Mar, Encinitas, etc… are “holding up” but it’s only a matter of time before they fall.

[patientlywaiting]

I follow the rental market Downtown San Diego and rents are already dropping. People are asking certain rents but the places are sitting.

Why not “pretend” to be a renter and check around. I found that if you pass up on a rental deal today, there’ll always be a better one tomorrow.

I think that rents are sticky like housing resale. People try to stand firm on the askings but they eventually go lower. If you look around the 92037 zip near UCSD, you’ll see rents and resale prices dropping as well.

Most people are in 1-year rental agreements so it might seem like rents are holding while for sale prices are dropping every day. I bet that people will be negotiating when their leases are up.

http://www.archstoneapartments.com/ is a good site to follow since you can rent online from them. They will play with prices up a little then down a little, but you will see the same/similar units sitting. When will they drop prices to fill the vacant units?

I know that certain sub-markets, like 4S, Del Sur, Carmel Valley, Del Mar, Encinitas, etc… are “holding up” but it’s only a matter of time before they fall.

[patientlywaiting]

I follow the rental market Downtown San Diego and rents are already dropping. People are asking certain rents but the places are sitting.

Why not “pretend” to be a renter and check around. I found that if you pass up on a rental deal today, there’ll always be a better one tomorrow.

I think that rents are sticky like housing resale. People try to stand firm on the askings but they eventually go lower. If you look around the 92037 zip near UCSD, you’ll see rents and resale prices dropping as well.

Most people are in 1-year rental agreements so it might seem like rents are holding while for sale prices are dropping every day. I bet that people will be negotiating when their leases are up.

http://www.archstoneapartments.com/ is a good site to follow since you can rent online from them. They will play with prices up a little then down a little, but you will see the same/similar units sitting. When will they drop prices to fill the vacant units?

I know that certain sub-markets, like 4S, Del Sur, Carmel Valley, Del Mar, Encinitas, etc… are “holding up” but it’s only a matter of time before they fall.

[patientlywaiting]

I follow the rental market Downtown San Diego and rents are already dropping. People are asking certain rents but the places are sitting.

Why not “pretend” to be a renter and check around. I found that if you pass up on a rental deal today, there’ll always be a better one tomorrow.

I think that rents are sticky like housing resale. People try to stand firm on the askings but they eventually go lower. If you look around the 92037 zip near UCSD, you’ll see rents and resale prices dropping as well.

Most people are in 1-year rental agreements so it might seem like rents are holding while for sale prices are dropping every day. I bet that people will be negotiating when their leases are up.

http://www.archstoneapartments.com/ is a good site to follow since you can rent online from them. They will play with prices up a little then down a little, but you will see the same/similar units sitting. When will they drop prices to fill the vacant units?

I know that certain sub-markets, like 4S, Del Sur, Carmel Valley, Del Mar, Encinitas, etc… are “holding up” but it’s only a matter of time before they fall.

[patientlywaiting]

I follow the rental market Downtown San Diego and rents are already dropping. People are asking certain rents but the places are sitting.

Why not “pretend” to be a renter and check around. I found that if you pass up on a rental deal today, there’ll always be a better one tomorrow.

I think that rents are sticky like housing resale. People try to stand firm on the askings but they eventually go lower. If you look around the 92037 zip near UCSD, you’ll see rents and resale prices dropping as well.

Most people are in 1-year rental agreements so it might seem like rents are holding while for sale prices are dropping every day. I bet that people will be negotiating when their leases are up.

http://www.archstoneapartments.com/ is a good site to follow since you can rent online from them. They will play with prices up a little then down a little, but you will see the same/similar units sitting. When will they drop prices to fill the vacant units?

I know that certain sub-markets, like 4S, Del Sur, Carmel Valley, Del Mar, Encinitas, etc… are “holding up” but it’s only a matter of time before they fall.

[patientlywaiting]

I still predict that many properties will be short sales OR foreclosed on twice in the period from 2006-2011.

I believe you will be proven correct twice. 🙂

[patientlywaiting]

I still predict that many properties will be short sales OR foreclosed on twice in the period from 2006-2011.

I believe you will be proven correct twice. 🙂

[patientlywaiting]

I still predict that many properties will be short sales OR foreclosed on twice in the period from 2006-2011.

I believe you will be proven correct twice. 🙂

[patientlywaiting]

I still predict that many properties will be short sales OR foreclosed on twice in the period from 2006-2011.

I believe you will be proven correct twice. 🙂

[Author]

Posts