Will rents create a price floor despite the mini rental bubble?

[Anonymous]

As a renter in San Diego going on 9 years, I can tell you that I have personally experienced rents increasing. We try to keep our rent under $2,000 a month, but it is getting increasingly harder for us to do. We are priced out of the areas we once could afford and keep moving farther North in order to keep our budget.

We’ve been in San Elijo now for a year, and our landlord is going into foreclosure, so we have to move yet AGAIN. Listings on Craigslist for this area have doubled since last year, yet the identical condo across the street from us is asking for $400 more than what we pay now, a 22% increase.

More supply, plus higher prices? Or is Craigslist not a good indicator? It has occurred to me that some of these listings may also be distressed properties, which makes it even more treacherous for unsuspecting renters.

We are lucky (in a way!) that we couldn’t afford to buy during the bubble, we dodged that bullet, however, it doesn’t mean renters necessarily have it easy either.

Just my experience.

[Raybyrnes]

Experience is very different. Lived in one place for 4 years No Rent Increase.

Lived in another place 5 years no rent increase.

Currently living in a house 5 months, will update at the end of the year.

[Raybyrnes]

Experience is very different. Lived in one place for 4 years No Rent Increase.

Lived in another place 5 years no rent increase.

Currently living in a house 5 months, will update at the end of the year.

[Raybyrnes]

Experience is very different. Lived in one place for 4 years No Rent Increase.

Lived in another place 5 years no rent increase.

Currently living in a house 5 months, will update at the end of the year.

[Raybyrnes]

Experience is very different. Lived in one place for 4 years No Rent Increase.

Lived in another place 5 years no rent increase.

Currently living in a house 5 months, will update at the end of the year.

[Raybyrnes]

Experience is very different. Lived in one place for 4 years No Rent Increase.

Lived in another place 5 years no rent increase.

Currently living in a house 5 months, will update at the end of the year.

[La Jolla Renter]

thankgodwedidntbuy, I would put together a renter resume, with assets, and credit score. Make offers on the rent. I have never paid the advertised rent. Landlords almost always will reduce the rent for a quality tenant. My current rent is $1,000 below the asking price.

If home prices keep getting pounded, gas goes to $5 a gallon, and renters get laid off, supply will grow and rent prices will come down IMO.

A friend of mine in the mortgage business got out of his 3k a month condo and is renting a room from a friend. 20-30-40 somethings will move back in with mom and dad, etc etc.

[La Jolla Renter]

thankgodwedidntbuy, I would put together a renter resume, with assets, and credit score. Make offers on the rent. I have never paid the advertised rent. Landlords almost always will reduce the rent for a quality tenant. My current rent is $1,000 below the asking price.

If home prices keep getting pounded, gas goes to $5 a gallon, and renters get laid off, supply will grow and rent prices will come down IMO.

A friend of mine in the mortgage business got out of his 3k a month condo and is renting a room from a friend. 20-30-40 somethings will move back in with mom and dad, etc etc.

[La Jolla Renter]

thankgodwedidntbuy, I would put together a renter resume, with assets, and credit score. Make offers on the rent. I have never paid the advertised rent. Landlords almost always will reduce the rent for a quality tenant. My current rent is $1,000 below the asking price.

If home prices keep getting pounded, gas goes to $5 a gallon, and renters get laid off, supply will grow and rent prices will come down IMO.

A friend of mine in the mortgage business got out of his 3k a month condo and is renting a room from a friend. 20-30-40 somethings will move back in with mom and dad, etc etc.

[La Jolla Renter]

thankgodwedidntbuy, I would put together a renter resume, with assets, and credit score. Make offers on the rent. I have never paid the advertised rent. Landlords almost always will reduce the rent for a quality tenant. My current rent is $1,000 below the asking price.

If home prices keep getting pounded, gas goes to $5 a gallon, and renters get laid off, supply will grow and rent prices will come down IMO.

A friend of mine in the mortgage business got out of his 3k a month condo and is renting a room from a friend. 20-30-40 somethings will move back in with mom and dad, etc etc.

[La Jolla Renter]

thankgodwedidntbuy, I would put together a renter resume, with assets, and credit score. Make offers on the rent. I have never paid the advertised rent. Landlords almost always will reduce the rent for a quality tenant. My current rent is $1,000 below the asking price.

If home prices keep getting pounded, gas goes to $5 a gallon, and renters get laid off, supply will grow and rent prices will come down IMO.

A friend of mine in the mortgage business got out of his 3k a month condo and is renting a room from a friend. 20-30-40 somethings will move back in with mom and dad, etc etc.

[surveyor]

more rents

Rents aren’t usually susceptible to a bubble and any bubble they do enter tend to be small. The 10% overpriced sounds about right. If rent prices for a certain area enters a bubble, it is usually due to something unusual – one example would be when rents skyrocketed in the Bay area due to the Internet bubble. It proved to be temporary and when it crashed, rents went down as well.

I don’t know personally what’s going on in Orange County that would make rents go up drastically. What I have been seeing here in San Diego is that rents have been going up, because more former owners are becoming renters. While there have been buyers (former renters becoming homeowners) the trend has not been large enough to offset the former owners. As a result, there has been a larger demand for affordable rental units. As a result, those affordable units have been able to increase their prices.

Many people have assumed that as foreclosures increase, that there would be a reduction in rental prices. I have always said that this is a false assumption. What has been happening is that there is a large amount of houses empty due to foreclosures, very few people are buying them, and most people are opting to rent instead of buy. This activity has had the effect of putting pressure on rentals, allowing for price increases. Foreclosures have to be bought and converted by investors into viable rental units first and until they start doing so in huge numbers, do not expect rents to go down. While there has been some investor activity, the effect has been minimal.

My guess is that in order for rents to be decreased, you would have to see a large increase in sales first, heralding the end of the bubble bust. Or of course, the worsening of the economy. That always does the job.

[surveyor]

more rents

Rents aren’t usually susceptible to a bubble and any bubble they do enter tend to be small. The 10% overpriced sounds about right. If rent prices for a certain area enters a bubble, it is usually due to something unusual – one example would be when rents skyrocketed in the Bay area due to the Internet bubble. It proved to be temporary and when it crashed, rents went down as well.

I don’t know personally what’s going on in Orange County that would make rents go up drastically. What I have been seeing here in San Diego is that rents have been going up, because more former owners are becoming renters. While there have been buyers (former renters becoming homeowners) the trend has not been large enough to offset the former owners. As a result, there has been a larger demand for affordable rental units. As a result, those affordable units have been able to increase their prices.

Many people have assumed that as foreclosures increase, that there would be a reduction in rental prices. I have always said that this is a false assumption. What has been happening is that there is a large amount of houses empty due to foreclosures, very few people are buying them, and most people are opting to rent instead of buy. This activity has had the effect of putting pressure on rentals, allowing for price increases. Foreclosures have to be bought and converted by investors into viable rental units first and until they start doing so in huge numbers, do not expect rents to go down. While there has been some investor activity, the effect has been minimal.

My guess is that in order for rents to be decreased, you would have to see a large increase in sales first, heralding the end of the bubble bust. Or of course, the worsening of the economy. That always does the job.

[surveyor]

more rents

Rents aren’t usually susceptible to a bubble and any bubble they do enter tend to be small. The 10% overpriced sounds about right. If rent prices for a certain area enters a bubble, it is usually due to something unusual – one example would be when rents skyrocketed in the Bay area due to the Internet bubble. It proved to be temporary and when it crashed, rents went down as well.

I don’t know personally what’s going on in Orange County that would make rents go up drastically. What I have been seeing here in San Diego is that rents have been going up, because more former owners are becoming renters. While there have been buyers (former renters becoming homeowners) the trend has not been large enough to offset the former owners. As a result, there has been a larger demand for affordable rental units. As a result, those affordable units have been able to increase their prices.

Many people have assumed that as foreclosures increase, that there would be a reduction in rental prices. I have always said that this is a false assumption. What has been happening is that there is a large amount of houses empty due to foreclosures, very few people are buying them, and most people are opting to rent instead of buy. This activity has had the effect of putting pressure on rentals, allowing for price increases. Foreclosures have to be bought and converted by investors into viable rental units first and until they start doing so in huge numbers, do not expect rents to go down. While there has been some investor activity, the effect has been minimal.

My guess is that in order for rents to be decreased, you would have to see a large increase in sales first, heralding the end of the bubble bust. Or of course, the worsening of the economy. That always does the job.

[surveyor]

more rents

Rents aren’t usually susceptible to a bubble and any bubble they do enter tend to be small. The 10% overpriced sounds about right. If rent prices for a certain area enters a bubble, it is usually due to something unusual – one example would be when rents skyrocketed in the Bay area due to the Internet bubble. It proved to be temporary and when it crashed, rents went down as well.

I don’t know personally what’s going on in Orange County that would make rents go up drastically. What I have been seeing here in San Diego is that rents have been going up, because more former owners are becoming renters. While there have been buyers (former renters becoming homeowners) the trend has not been large enough to offset the former owners. As a result, there has been a larger demand for affordable rental units. As a result, those affordable units have been able to increase their prices.

Many people have assumed that as foreclosures increase, that there would be a reduction in rental prices. I have always said that this is a false assumption. What has been happening is that there is a large amount of houses empty due to foreclosures, very few people are buying them, and most people are opting to rent instead of buy. This activity has had the effect of putting pressure on rentals, allowing for price increases. Foreclosures have to be bought and converted by investors into viable rental units first and until they start doing so in huge numbers, do not expect rents to go down. While there has been some investor activity, the effect has been minimal.

My guess is that in order for rents to be decreased, you would have to see a large increase in sales first, heralding the end of the bubble bust. Or of course, the worsening of the economy. That always does the job.

[Author]

Posts