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Yikes, that someone would even ask this is a huge red flag. I’d want him out ASAP.

Send him notice of a rent increase and tell him you’re happy to prorate rent so he can quit the place mid-month right before he leaves for his trip.

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None of these are predictions. (We think anyone who has a confident multi-year interest rate forecast is deluding themselves).

But you are making a very bold prediction. You outline four scenarios and their impact on affordability, one where they stay the same and three more where they go up by varying amounts.

You all but rule out what I believe is quite likely, which is rates go down.

I also, for the reasons above, think you may be implicitly dismissing the chance of higher inflation with declining or flat rates.

While I think the low inflation and low rates is most likely, high inflation low rates is an easy enough scenario to imagine: BIB and BBB both pass, the boom continues, incomes rise and partly bleed into higher prices, but partly are saved. Dem gains in 2022 are unlikely but possible, and I think would lead to an even bigger round of BidenBux that again is split between consumption and debt reduction.

This chart is illuminating.

https://fred.stlouisfed.org/series/HDTGPDUSQ163N

The cost of debt keeps going down, but it doesn’t matter, the quantity of debt demanded goes down even more.

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The main point of contention is whether the recent rise in inflation will be temporary or more protracted.

You know I am on Team Transitory. My view that the Fed is doing a great job and should be commended is the true contrarian take of 2021.

That aside, I am dubious that moderately higher inflation will actually have any effect on interest rates. Not even a couple years of 6% inflation, which is very unlikely.

The old model where inflation and nominal interest rates moved closely in tandem was based on a world where the marginal and median dollar saved was from middle class families. That world is dead, replaced by our current world of extreme inequality and elite domination. And while a middle class family may decide to spend more if inflation is high and return on their bank account balances is low, the wealthy just don’t work that way.

Rates are low and will continue on a secular path even lower, real and nominal both, because demographic and technological change has resulted in a permanent “creditworthy borrower’s” market. We are getting rarer, and savers are getting more common.

You have savings to lend, but want stability, low risk, and liquidity? Take a number bub, nobody cares in 2021.

The idea that savers can say “Due to higher inflation, I won’t lend out my money unless I get a commensurable higher rate” just doesn’t fly. The marginal and median dollar saved is saved by someone with a high net worth who does not have a bunch of consumption he will substitute for savings if he doesn’t get his desired rate.

Negative real rates are our future, and negative nominal rates will be a regular thing too in a large and growing portion of the world.

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The decline in spending on travel, entertainment, and the like is temporary, so the “nothing else to spend it on” effect has already diminished and will disappear entirely.

I disagree that we’ll ever get back to pre-COVID levels on a lot of these issues.

I think these broad “fun outside the home” areas that ranges from trips to France to Applebees, will never recover.

Older people, even fully vaccinated, are frequently afraid to resume these activities. Others don’t like the additional hassle, like covid tests before you can come home from a trip abroad.

And on top of just older people, you have a lot of younger people who consider themselves immuno-compromised, and young people who are in regular contact with elderly relatives.

Then there’s the labor shortage issue. Restaurants in general have worse service and higher prices than before.

Here’s one way the new “nesting in a bigger home” is permanent for me. I spent a ton of money setting up a full home gym. This has both saved me money on gym membership and transportation costs to get there, but permanently increased my demand for residential housing.

What percentage of the population will never go out to the movies again because they upgraded their home theater system with high end speaker and an 60-inch TV or even a projector setup?

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Wow, MM is quite cheap for how central it is. I hate driving on MM Blvd however, seems rush hour there starts at 2:30 and goes to 7 and people drive aggressively and poorly on it, like LA though not that bad.

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The idea here isn’t to argue that rents are currently not keeping up with prices. The data is what it is, and I don’t have reason to doubt it is basically right.*

My point is that relatively slow asking rent growth “only” in the low double digits isn’t a sign that prices are excessive and overshooting rents. The article’s comparison of them suggested otherwise.

Rather, I think rents are temporally below their current equilibrium level.

*My periodic searches for rent data suggest the data quality is pretty low, with huge gaps from the various sources.

My guess is that Zillow will eventually have the best rent data, though the monthly rent estimates it sends for me on my condo have ranged from 2400 to 3500 in the last year, and swings wildly.

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California is a community property state. Property purchased before marriage and inherited at anytime is not community property unless you take steps to add it. And even then you may get credit for simply adding to the community without compensation.

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Flyer, most skin damage leading to cancer happens in childhood, even though the cancer is decades later.

One very bad sunburn from an unprotected 4 hours in direct sun increases risk far more than a year of light tanning.

Many cosmetics increase risk of sunburn. The two most common offenders are alpha hydroxy acid and salicylic acid. Anything that exfoliates too, as the outer dead layer of skin protects the rest from burn.

The FDA has a suggested warning on photosensitizing cosmetics but does not require it. One of my public interest lawsuits involved such a product and I learned a huge amount about skin cancer and sunburn, but confidentiality means I cannot name it or discuss details.

Almost all whites will have many skin cancers by old age, but the immune system usually catches and destroys the cancers before they are ever detected. An illustration of this is people with damaged immune systems from AIDS get Karposi’s sarcoma, a viral induced skin (and elsewhere) cancer that a healthy immune system is easily able to destroy.

Conversely over avoiding the sun causes depression, sleep disorders, and immune system dysfunction. It also prevents the light tanning that protects the skin and makes the very unhealthy peeling sunburns more likely.

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Have you asked for your money back?

They are likely swamped and also dealing with backordered parts being delayed. I doubt you will get better service elsewhere.

I’d take your case on contingency if the deposit were 200k+.

Now is an awful time for doing home improvement projects. Wait for the next recession.

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Same in OB. Only 2 houses listed below 1.9M, versus 16 listings exactly a year ago.

In the combined peninsula 92106/7 the cheapest detached is currently 1.32M.

High income bay area people are paying top dollar for long term rentals and monthly airbnb whole house short terms too. We remain #2 of 20 in the case schiller index behind Phoenix.

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I did it! Ended up at 2.0% no cost.

Lots of Cal muni funds, hard to decide. The closed end ones all pay about 4% tax free.

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“unlimited ADUs”

My backyard in 5 years:

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SDR: we already debated how practical it is to add backyard units to an existing suburban style property.

I think it can make economic sense, but rarely will be a slam dunk.

Here’s the first result I saw looking for encinitas adu and jadu construction. I note it is a complete teardown and gigantic .27ac lot less than a full block to the beach.

https://www.zillow.com/homedetails/128-W-Glaucus-St-Encinitas-CA-92024/295343142_zpid/

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I have developable beach lots with teardowns, so I have given the question of zoning changes some thought.

As I said above, in general I think the average effect is going to be small.

But here’s how I think about it.

The worst effected will be recently built and renovated places that would have liked to take advantage of the new changes.

The best effected are those like mine that are ripe for development and probably would take advantage of the changes.

For the typical single family, they suffer from additional density and more supply. However, they benefit from the density too, and over time it is dense areas that are worth the most.

One way to look at it is that having a big condo complex go up next door is bad, but having ten of them going up two blocks away is good, because the untapped demand for walkable neighborhoods is gigantic, and that density creates a virtuous circle by encouraging amenities.

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I think people overestimate the degree zoning rules have held back new construction.

Construction costs are really high. And the legal costs still include lots of crazy environmental reviews, Indian artifact checks, variances getting approved.

To take one example, does this new law do anything about the rule that no more than 50% of the street-facing ground level of a development can be parking?

While parking requirements are getting eliminated and relaxed, some parking is still generally needed, especially for new mid to high end construction. Having them in the back of the lot means wasted space going to long driveways.

This is just a single example.

Here in 92107, we just have vast areas that have long been zoned multifamily but 75% or more of the lots remain single family. And even new construction tearing down old single family is about 2/3 replaced with larger single family, with most of the rest being two detached houses on 1 lot.

In other words, there just isn’t a lot of evidence people are maxxing out their lots now, and will go even denser if permitted. Parts of SF and LA are of course different where no-parking new construction condos will sell for $1200/sqft easy, so even with high construction costs developers want to max out.

San Diego just isn’t that expensive yet.

The only place where higher maxes would really come into play is oceanfront or within a 2 blocks. But these areas are limited by the height limit, not unit limits.

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