[CA renter]

[quote=poorgradstudent][quote=flyer]Have lived in RSF for years, and, yes, there are a lot of homes for sale right now. As mentioned, many things could be going on, but, most people we know who have been here as long as we have or longer are fine, and never plan to move, but the nouveau riche do tend to come and go in cycles.

It does seem that many are unprepared to stay in San Diego through retirement, so it’s not too surprising to see this happening. We have investment properties here and elsewhere, and have noticed there does seem to be a growing demand in less expensive areas around the country.[/quote]

Considering how high home prices are right now, it wouldn’t shock me if some of the Smart Money is looking to cash out.[/quote]

Yes, that was my thought as well. The current RE bubble (probably near peak) and the water issue would certainly push some people off the fence.

[CA renter]

Thank you for your observations, North Park Girl. Sounds like you timed your entry and exit very well.

I agree with you about bubbles in tech and the Bay Area. Also agree with OCR regarding the Chinese bubble(s) and their potential effects on our markets, along with other markets around the world.

It’s probably a good idea to sit on some cash and just watch how things pan out right now.

Hope you enjoy the SF area as it really is beautiful up there and they get rain. Lucky you!

[CA renter]

[quote=harvey][quote=CA renter]There’s a lot of money to be made with all of this testing and the related curriculum changes. Lots and lots of money.[/quote]

That’s a really compelling argument.

I particularly like all the evidence you’ve provided.

(Cue the confirmation bias dance and links to fringe websites … maybe we can even work shadowstats into the mix!)[/quote]

Yes, “fringe” websites like NBER or the Federal Reserve’s website, or Grant’s Interest Rate Observer,” to which you’ve responded with “lol” in the past. (These are literally the websites/sources that you claimed weren’t valid in another thread.)

Anyway, follow the money…

[CA renter]

[quote=njtosd]I know this sounds like I’m 130 years old, which I am not, however . . . math as it was traditionally taught in the U.S. was sufficient to get us to the moon and to fuel the IT and biotech industries.

My mother was a science teacher – she bragged that she could get kids to like her class second best to PE. It was unfair, but years ago smart women (who would now be doctors or engineers) became math and science teachers, nurses, etc. I have encountered very few elementary teachers in recent years who love math or science (and, sadly, science in 6th grade is relegated to a 3 month “rotation” along with public speaking). If the teachers don’t love the subject, the students won’t either, regardless of all of the methods that you use to teach.

What is the answer? Pay science and math teachers more to lure science-y types to teaching. Not sure whether the unions would permit that. But when you look at the fact that California’s big industries – agriculture, high tech, biotech and pharma all are dependent on a supply of people with math and science capabilities, something has to be done.[/quote]

Agree that we should pay math and science teachers more if we’re not getting them in sufficient quantity and quality with the current pay structure.

And since some teachers can earn more for being bilingual or for having certain certifications, I think one could easily make the argument that math and science teachers could be paid more.

[CA renter]

In normal circumstances, I’d say wait until late January/February. But if the markets continue to be volatile (it affects psychology, as well as the actual wealth of potential home buyers), it might be better to get out while housing prices are still peak-ish.

[CA renter]

[quote=njtosd]I heard a lot about this test that didn’t seem encouraging.
My daughter said it was 2 hours a day over 10 days for a total of twenty hours. To compare, the California Bar is about the same (although it is administered over three days). And there is no homework given for those two weeks and no apparent learning taking place during those weeks. I shouldn’t even start thinking about all of this. I hate the Common Core, which appears to be something like the least common denominator.[/quote]

There’s a lot of money to be made with all of this testing and the related curriculum changes. Lots and lots of money.

[CA renter]

[quote=bearishgurl][quote=no_such_reality]While I think long term ownership is more beneficial than long term renting for building financial stability and wealth, that’s not what we’re talking about in this thread.

This is about whether gutting prop thirteen for any non-primary residence and removing the ability to protect the tax basis in family transfers will be better or not for the majority.

The proposal will make it harder for people to buy, harder to move up, harder to save to buy because it will increase rents and push more to corporation run housing which will churn them.

The anti-13 crowd has a lot of wishful thinking on what they want, but no basic economic connection to what will happen in their proposal.[/quote]

NSR, your post above assumes that current landlords who are most benefiting from the existence of Props 13, 58 and 193 are somehow “benevolent” and thus renting their affected propertie(s) below market due to the generous property tax subsidy attached to them.

In the absence of rent control, nothing could be further from the truth. LL’s charge (and get) as much rent as their local market will bear (to still be able to retain longer-term tenants). I will repeat again here that the amount of their annual property tax has nothing to do with this.

The end result of these propositions is that one set of property owners is unjustly enriched over the set who is paying closer to market-rate property taxes, plain and simple. The “unjustly-enriched” set can also afford to be more selective on tenants because they can hold a vacancy longer due to much lesser carrying costs than the “market-rate set” has, since many (most?) of these properties have been in the same family for ~40 years and are likely now free and clear. The latest “owner” (child or grandchild) is no more “deserving” (than the “market-rate set” of owners) of a generous tax subsidy than they are. The child/grandchild owner was simply born to people who were not necessarily even well off themselves, educated or even contributed anything to their communities but owned (or inherited) CA property at the “right time” and often situated in the “right place.”

These props (esp the last 2) are a gross example of unjust enrichment to one group (consisting of many thousands of younger, able-bodied individuals of working age) to the detriment of all the “near market-rate taxpayers” and our state and local governments.[/quote]

Agree that most landlords do not pass on their lower costs to their tenants, though some do. Our old LL charged us market rent when we moved in, but by the time we were moving out almost eight years later, our rent was a good $400-$600 below market, possibly more. There are a number of good and wise landlords around here who have been doing the same thing. But I would agree that they are in the minority.

We also need to distinguish between the different types of beneficiaries of Prop 13 protection:

1. owners who are original purchasers

2. the descendants/heirs of these original purchasers

3. non-owner-occupiers who are renting these houses out (traditional residential rentals, or vacation rentals…they may or may not be heirs, it doesn’t really matter)

4. non-owner-occupiers who are using these homes as second homes or vacation homes

5. commercial/industrial property owners who are original purchasers

6. commercial/industrial property owners who have purchased a share of a property from an original purchaser, which enables them to get the Prop 13 subsidy

—————–

I believe that you, BG have a problem with all of the above, with the possible exception of #1 (and #5?).

I think that #1 should always be protected, and am okay with #2 as long as it is their primary residence and they are not getting any subsidies of any sort on any other properties in the U.S., or even around the world. And if #2 elects to maintain the subsidy, then they (and their own descendants/heirs) would NOT be able to step-up the cost basis of the property when calculating capital gains upon sale — the basis would be the same as the original purchaser’s cost basis.

The rest should not be entitled to a subsidy except, possibly, for #5, and if we were to subsidize these commercial/industrial property owners, they should get a much smaller subsidy — maybe cap the amount that the assessment can rise in a given year to perhaps 4%, and only if the building they own is also their principal place of business and they get no other subsidies on any other properties in California. If there are multiple tenants in their commercial/industrial properties, then they would have to agree to rent control to ensure that the benefit of the subsidy was passed on to their tenants, as the purpose of the subsidy would be to help businesses maintain somewhat lower RE costs, though I’m not entirely behind this idea.

[CA renter]

[quote=mixxalot]True and since I am fluent in Spanish it’s a possible way to afford ocean front living.[/quote]

If it’s really as cheap and safe as your friend says it is, and if you are bilingual, this sounds like a really good idea.

If you check it out down there, please give us an update.

[CA renter]

[quote=harvey]Shadowstats is a perfect example demonstrating that one can find any data on the internet to support any economic argument – provided one does not apply any common sense when citing the numbers.

Nevertheless, there is no recession. The word recession has a specific definition involving hard data. It is not based upon subjective evaluation by economic curmudgeons.

There hasn’t been a recession for over half a decade, and there are no real indications one is developing.[/quote]

If you had read this entire thread, not to mention just that one post, you would understand that the official unemployment rates were listed there as well. I even noted it in my post. Shadowstats attempts to correct for certain deficiencies in the official numbers. Nobody is saying that it is the gold standard for statistics, it’s just another way of looking at things (for the record, I think he overstates things, but at least he tries to address some of the weaknesses in the official data). Even the experts acknowledge that “official” statistics aren’t particularly accurate, nor do these official numbers convey the full picture of what’s going on in the economy. It’s always best to look at a variety of sources and methods for gaining information in order to fill in the gaps.

I’m well aware of the official definition of a recession. But that definition is fairly meaningless to those who are out of a job, insecure in their jobs, underemployed, and/or making less today than they were 10+ years ago. Some would argue that we’ve been in an “unofficial” recession since the late 90s which has been masked (just barely) by serial credit/asset price bubbles. Some claim it’s been going on even longer than this.

We need to look at debt levels if we want to get a better picture of where we stand and what might happen in coming years, too. And this is happening while the Fed/govt are in a weaker position now, as opposed to during the financial crisis, to counter any potential problems.

http://www.mckinsey.com/insights/economic_studies/debt_and_not_much_deleveraging

[CA renter]

[quote=no_such_reality]For the 1 or 2 out of ten that get to buy it, but buying it is more expensive than renting. And frankly, many renters are renting out of necessity. They don’t have the money to close the deal on $500,000.

The other 8 will be squeezed into an even tighter renting pool that is already experiencing signifcant rent increases.http://www.ocregister.com/articles/rent-680104-month-three.html

And then prop 13 elimination plans will universally raise costs to ALL landlords.

What happens when all producers experience cost increases? They raise prices.

BTW, the largest slumlord in California is about to sell off a bunch of properties. CalTrans is going to sell the homes they own in the path of the never built 710 extension in Pasadena.[/quote]

Yes, the down payment is a huge obstacle for many people, especially when a “starter” home costs $450K and up. But owning can be cheaper than renting in many areas. In our neighborhood, it’s pretty close, precisely because of the ridiculous rent increases, especially if you have 20% down.

[CA renter]

[quote=paramount][quote=CA renter]If your house isn’t selling in a hot RE market like today’s, there is only ONE reason for it: your price is too high.

Never trust a Realtor to look out for your best interests, and don’t think that having a Realtor absolves you from doing your homework, I don’t care who the Realtor is. You must take charge and know what you are doing.

If you do the above, you can sell your house within a week, or less, if you price it correctly. Heck, ask one of our Pigg Realtors, maybe SDR, if they can help you or recommend someone.

I think you were right to try to sell it right now. This is a fantastic time to sell — you might even manage to sell it at/near a market peak. Not sure why you gave up so quickly and rented it out, instead. Might want to re-think that.

Good luck![/quote]

Thanks CAR for the comments.

I reluctantly decided to re-rent for these reasons:

1. Once the listing price was to high, I felt the listing was botched or as I noted a lemon.

2. I barely had any traffic and the heavy buying season was on it’s way out. If this all would have happened in April I would have kept it on the market knowing we were going into the buying season.

3. The house costs ~2k/month to carry when water, elec, etc..are factored in – maybe a little less. It was critical to get the price right from the start.

4. Given that the listing was a lemon, I wanted to get the property back on the rental market ASAP. After labor day it gets more and more difficult to rent or sell – at least that’s my impression.

I agree I have some responsibility, but I also depend on a realtor to provide competent advice. That didn’t happen.

And yes, this may end up costing even more in the long run. That’s why it’s so critical to hire a competent realtor.

The house is in very good/move-in condition. But it’s essentially a starter home.

First time buyers are a smaller and smaller share of the market – there are many more renters than 1st time buyers.

On top of that, millenial buyers IMO have very unrealistic expectations.[/quote]

Yikes…you’re in the hole every month. 🙁

Are you planning to put it on the market in late winter/early spring of 2016? Do you have a shorter-term lease with this tenant?

On the other hand, if you want to sell it sooner, you might be able to swing a deal with the tenant who might be more attached to the house and willing to pay a bit more in order to avoid having to move, etc. You could complete the transaction without a Realtor, in that case, and split the benefits of not paying the commissions between the buyer and seller. But do consider consulting with a RE attorney just to be sure that everything is in order.

I know of a few families who did this and everyone came out a winner. We even tried to buy our last rental, but the LL decided against it once they realized how much the price had fallen after the bubble burst.

[CA renter]

[quote=Leorocky]Shadowstats is not a reputable source.[/quote]

It includes the official unemployment numbers AND the ShadowStats numbers.

For the record, I believe that the employment numbers have improved over the past few years, but there is no question that the job market is saturated with workers, many of whom are overqualified for the available positions (to discredit the myth that people “just need to get a better education”).

There is hope, though, as some of these minimum wage laws go into effect, trade agreements are better scrutinized, and currency manipulations are curbed. And if the tide is turning back toward a more pro-labor environment, which seems to be happeing, things could really start to improve. It’s long past time that wages started moving up because our purchasing power has most definitely been eroding over the years.

[CA renter]

[quote=no_such_reality]CAR because the renter/unit relationship is neither direct nor linear. We were a good example and know many friends that essentially did the same. When we rented, we settled for a 2/2 townhome. When we bought, like our friends, we went SFR 3 or more/2.5 or more.

The rental market for 3 bedrooms or more is pretty lean. Selling those properties that have low tax rates will disporptionately hit the higher bedroom count of the rental market.. Essentially, you will see slightly less competition for significantly less properties in that property space.

Where today you may essentially have 11 people vying for 10 SFR rentals, after stripping the tax basis, I suspect you will end up with 9/10 vying for 6 or 7 available SFR properties. More competition on those properties will put upward pressure on rents there. While eventually the number of renter at a given property type balances back out, you have more people substituting a lower end good for a higher end good because the higher end unit isn’t available. That in turn actually pulls those rents up on the better quality lower end units which in turn pushes more up.

The second factor is many of those same properties that will get returned to the buyer pool are managed by small time landlords. In general small time landlords value stability in tenants more than the dollars. While your major property management firms will raise rents like clockwork on lease expiration, smaller owners often won’t on good tenants. The tax basis will again shift the property mix more to large landlords, large landlords that will raise rents relentlessly because they are going to have the market vacancy anyway.

Those two factors will create a rental environment that experiences more churn, more instability for the renters, more rent increases and more upward pressure on rent.[/quote]

But the people who would be looking for a 3/2 or larger rental would be able to buy it, instead. Many people are renting out of necessity, not desire. If more homes came out of the rental pool and onto the for-sale market, then prices would come down a bit, and those former renters could buy. IMHO, this is a good thing.

[CA renter]

[quote=jeff303]Looks like their integration with Google apps or appliance is broken. In the meantime, you can always go to http://www.google.com, and search that way, with site:piggington.com at the end. Example[/quote]

Thanks for that! Learning new things every day. 🙂

[CA renter]

If your house isn’t selling in a hot RE market like today’s, there is only ONE reason for it: your price is too high.

Never trust a Realtor to look out for your best interests, and don’t think that having a Realtor absolves you from doing your homework, I don’t care who the Realtor is. You must take charge and know what you are doing.

If you wanted to get a feeling for the price of your house, you could have linked a similar home here on Piggington with explanations regarding similarities and differences. You could even take pics of the inside (and possibly outside, if you don’t have privacy concerns), and we could tell you what your house is worth.

No need to ever pay 6% in a hot market, not even in a cold one. Just give your house an exceptionally good cleaning; maybe paint the interior in neutral colors if the walls are looking scruffy; *maybe* put in new, relatively inexpensive carpeting if the old carpet is really stained and ugly; and give the outside a good cleaning and perhaps plant a few plants if there are bare patches, though the planting is optional. If you don’t feel like spending any money, just CLEAN it like crazy, and adjust the price accordingly.

If you do the above, you can sell your house within a week, or less, if you price it correctly. Heck, ask one of our Pigg Realtors, maybe SDR, if they can help you or recommend someone.

I think you were right to try to sell it right now. This is a fantastic time to sell — you might even manage to sell it at/near a market peak. Not sure why you gave up so quickly and rented it out, instead. Might want to re-think that.

Good luck!

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