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(former)FormerSanDiegan
ParticipantPS –
The cool thing about West of I-5 is that it is literally cooler. In the summer the temperature is 1-2 degrees higher per mile as you move inland, compared to the coast.
e.g. 78 degrees at Point Loma or Mission Beach
83 degrees in Clairemont
87 degrees at Qualcomm Stadium
94 degrees in La Mesa
100 degrees in El Cajon
Yeah, it’s definitely cooler west of I-5.As a former resident (who was first in SD in 1992) I consider areas west of I-5 such as Point Loma, La Jolla, Del Mar, Solana Beach, Pacific Beach to be more desireable than Clairemont, Kearny Mesa, North Park, Normal Heights, La Mesa, El Cajon, Lemon Grove.
However, there are notable exceptions, such as Mission Hills (East of I-5) but very nice and some parts of lower Ocean beach (West of I-5), mostly nice, but with some crappy pockets.ParticipantActually in the last downturn areas like Manhattan Beach and Santa Monica suffered the worst of the brunt. But what do I know, I was in Kansas at the time.
ParticipantJosh –
Doesn’t the comma in 50,000 make it six figures.
Right? Is my counting off ? Someone check my math.ParticipantAwesome.
I bet this will prevent George Bush from getting elected again.
Participant1) Own (LA)
2) Sold personal residence in July 2005 for self-directed job move (tech company). RE cycle was a factor, but not primary.
3) Sold at the Peak. Sold personal residence in SD in July 2005 for 820K (purchased in 2000 for 280K + 150K improvements). Purchased first SD house in 1996. Feel lucky, not smart.
4) I wrongly thought we were near a bubble peak in 2003, based on previous cycle. Found Piggington this Spring 06.
5) No, still own a second house (rental) there.
6) Yes, Considered also selling rental.
7) N/AParticipantCarlsbad –
I concur, they are large enough to have per-square-foot rates over large swaths of the county. I’m sure they provided the equivalent of a zillow market eval for rent.
August 24, 2006 at 3:21 PM in reply to: I think we’re past the point of treating Permabulls with Kid Gloves #33053ParticipantPS –
Hey, to be fair sometimes Bears are too early too. I would have thought we hit a top in 2003, based on Rich’s plots of historic ratios.
In the stock market arena … remember Alan Greenspan’s infamous “irrational exuberance” speech, and all the bears who pounced on it. They were eventually right, but …the speech was December 5, 1996, and the S&P 500 never retreated to that level. Today it’s about 70% above that level (not including dividends). That’s about 6+% growth, plus 1-2% dividends.
Bulls make money, bears make money, … and Piggingtons get it right.
Participantoops… typing too much today …
Here’s the rest of the story ..
As a side note, I don’t think the term “lowly renter” really applies these days. You are living in a place for about 4% of the current “value” annually. That’s like getting a mortgage of < 3%. You are now living like King. Perhaps the term "Kingly renters" is more appropriate. (Or Queenly renters).
ParticipantRaw Numbers, anyone ?
Anyone find the raw numbers that go into Rich’s famous Median price-to-per capita income chart ?
With those, it would be easier to play games with projections, such as Rich did in his VOSD article.
Rich
ParticipantCarlsbad –
I understand that you’ve had a bad experience with AHP. Perhaps they are understaffed, or too big. I will send my tenant a 3-4 question survey.
AHP does provide a recommendation on rental rates at the end of the lease … and since 2000 they have always (OK, 3 times, not much of a sample size) recommended for me to keep the same rate.
If the owner tells them to raise the rent AHP will do it. The renter will likely leave and the owner will find out what the current market rate is to get a new tenant.
As a side not, I don’t think the term “lowly renter” really applies these days. You are living in a place for about 4% of the current “value” annually. That’s like getting a mortgage of < 3%. Renters are living like kings now. How about "kingly renters" or "queenly renters" ?
ParticipantOK.
I too believe that this downturn will be worse that the last one. But that’s not the point.
The point of the experiment about the last downturn is not to compare it to this one, it is to compare the method you are using to predict this one.
If the method you used to interpret Rich’s data accurately measured the downturn the last time, you will have more confidence that it is the right method to predict it this time.
ParticipantI think I need to send an independent survey to my tenant to grade the PM company from her point-of-view.
Participantgunbuster – The 10% includes screening tenants, but does not include any fees associated with advertising in the UT.
There is no additional commission when they find new tenants. They take the 10% off the monthly rent and send a check for the rest.Carlsbadliving – Obviously they are good at finding quality tenants 🙂
Regarding rent increases, that is up to the greedy property owner, not AHP. When the lease is nearly up they send a standard form to the me to offer a new lease, continue on month-to-month per the original lease, and whether to change the monthly rent. It is solely up to the OWNER.
As a reasonable property owner, in my case I always ask them what the tenant wants (new 12-month lease or month-to-month) and give it to them. I’ve also never raised the rent to an existing tenant. I rented for 10 years, I know what I did when the rent went up … I looked at other options. When it didn;t go up I continued along.
Raising rent by 10% to get a new tenant does not pay off for the PM company or the owner. For the owner, the rent increase will not cover the cost of turnover. There is always at least 2 weeks between tenants, along with carpet, paint, proefessional cleaning, etc that eat up that cost. These costs are paid to third party cleaning companies, painters, not AHP.AHP actually would make more profit by keeping tenants rather than churning. It is easier to continue to take your 10% off the top and handle the day-to-day, than to continually screen applications and schedule viewings by potential renters to secure a new tenant.
I can’t comment on the maintenance issue from the tenants point of view. Perhaps it is non-responsive. But, in non-emergency issues where the value of the repair/replacement is > $100 they contact me, the owner, first before proceeding. I suspect that maintenance issues and rent increases are due to having non-responsive owners. The contract I have with AHP (the standard contract) is that they cannot proceed without my authorization on those issues.
I don’t think it is possible from a tenants point of view to separate the property management company’s actions from the owners’ actions. I suppose there are a fair number of negative dealings people have had with AHP and that it probably reflects the overall population of landlords out there.
August 24, 2006 at 10:11 AM in reply to: I think we’re past the point of treating Permabulls with Kid Gloves #33000ParticipantWhere are the permabulls ?
OK, davidpeace aside, where are the permabulls ?
Seems to me that even the David Lereahs of the world are hoping for only moderate declines (5%) in values, hoping that it doesn’t become a rout. Is he still a “perma-bull” ?
How about different categories of bears:PapaBear : The market was way too hot. anticipates 35-50% nominal price decline
Mama Bear : The market is already too cold, anticipates some leveling and only a 5-10% decline, followed by slight warming.
Baby Bears : The market will be just right (in 2-5 years), 10-20% correction.
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