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KingKongParticipant
As a landlord, I can tell you that the rent increase is negotiatable. If you do not like the 8% increase, tell them. If they are smart, they will counter offer by reducing the increase to 4%.
From the landlord perspective, it does not pay to lose a good tenant. It takes at least a month to get a new tenant in, that’s one month or 8.3% (1/12) without rental income. Addition of any amount is better than substraction of 8.3%!
So my advise is to talk to your landlord and I am sure you will both find a comfortable solution.
BTW, it is renter’s market right now π
KingKongParticipantThis reminded me of a recent letter I got from Pacific Highland Ranch. I no longer has the letter but the main idea is that “since somehow they did not get enough construction permit so they could not build new units until July, that’s the bad news. But the good news is that there are existing homes ready to close escrow in 45-60 days, that’s the good news.”
Any comments?
KingKongParticipantYes!
KingKongParticipantzk, I am not a judge but I strongly disagree with your first statement that PS started the whole name calling thing. If you had read her post, she first rumbled logically that why it is very unusual to have a personal 3X sales over previous year while the market is 35% down. I am not math wizard but the odds are strongly against this scenario provided that he had a decent sales last year ( as you know 3X of 0 is 0 and 3X of 1 is 3 and so on.). Then at the last sentence, after the logical analysis, PS concluded that this is highly unlikely and demanded real numbers. I believe if SDR just gave us some ballpark numbers, everyone will be happy π
April 18, 2006 at 8:53 AM in reply to: UT Sunday Home Section article “Is there a buble? Do the math” #24319KingKongParticipantWhy OC and SD are sorely lacking in high paying professional job creation?
Welcome Boston! Your insights and experiences adds a lot of substance to this forum.
I want to know your opinion why OC and SD are sorely lacking in high paying professional job creation. My observation is that here people are mostly well educated but we lack big corporations because we have a much shorter history than East coast and SF.
I have over 10 year of software development experience with an advanced degree but got paid barely over 100K. A person with similar experience will get at least 150K in SF or BOS. However, relocation is not an option for me π
KingKongParticipantA personal experience with Pardee Pacific Ranch development.
Portico/Anabella neighborhood in the PR development opened in the spring of 2005. At its openning, more than 200 people showed up for the roll call. I was about #400 on the list. They released the phases fast, every two to four weeks and every phase was sold out on the same day. I had to take a vacation and dropped out of the list in August. Then this year, I went over there for some free food on Valentine’s day. Portico has about four houses for sale. One of them is about $790 with $20K incentive. Unfortunately no takers. I did not even see people inquiry about them except me.
I always think that the developers know better than us, the average Joes. They have a long institutional memory and can buy the best statistics and research possible. If they are in a hurry to get rid of their inventory, watch out.
KingKongParticipantI am more or less in the thinking that one should own his /her primary residence. My argument is that there are two risks to it: higher mortgage rate and home value decrease. If you take an affordable 30 year fixed, your payment is fixed until you are paying off the house and it greatly reduces your risk. The only risk you can’t avoid is that if you have to for whatever reason sell, you might sell for far less than what you paid for.
I know a family that sold their house in 2000 and became renter because the consecutive double digits increase prior to that. Every year I saw him, I can see the pain in his face and have to hear over and over his argument why the housing can’t go up permanently. From this painful observation, I think it is important to own your primary residence.
I think the risk in the market is for people who over extended themselved. There are two types here too: over extended to get in a primary residence and landlords who own multiple units through over extended leverage. I felt sympathy for the former and disgust for the latter.
KingKongParticipantpowayseller, thanks for the discussion.
I am in a old neighbourhood. The price doubled from its previous peak of 1990’s. We only had fewer people selling and each told me that they do not need the money from the sale.
As for your anticipated 50% drop. I am confused on the math, the current ration of median house price to per capita income is 14.5 and the lowest is 9. That implies a 30% drop. If it is a 50% drop, the ration should be 7.25. Plus, the per capital income should increase with inflation and it will further soften the drop. I am expecting a 20 to 25% correction. I would love to hear your arguement.
KingKongParticipantThere was a condo conversion near my home and I almost bought it. When they first change the owner and opened the door, they are already approved for the conversion, so all the paperwork has been done. They were selling for 6 month advance. They need to get the renters out for the interior since they did not do any work on the exterior (maybe just a fresh new paint.)
KingKongParticipantI am not as pessmistic as you are. Since they were so much free money, people has a large amount of cash or stock on hand. So it will soften the blow from the housing bubble.
Case in point: you sold your house for $800K and netted probably $300K cool cash. You have to put it somewhere. No matter where you put it, it is going back to the economy.
KingKongParticipantJim,
Could you ellaborate on exactly how Fanny Mae works?
Originally I thought they more function as a bond broker that they buy mortages and sell to investors. You seem to imply that they also has a huge mortgage holdings and also guarantee the mortgages they sell. Please shed more lights on this. Thanks.
KingKongParticipantDoes this support the view that more people are comming to SD?
Personally I think this is temperary situation cause by the rental housing shortage created by condo-conversions. It takes a while to convert an apartment complex into “new homes”.
Also it reflects the quality of the tenants. Most good tenants have become homeowners by now. So they have to rent it to less qualified renters and so they have to price in more risk premiums.
Does anybody know how long does it take to refurbish a building for conversion? My guess is about half a year. First you have to do the exterior and then interior of each units.
KingKongParticipantI do not think so.
With the securilization of the mortgage bonds, the risks are on the mortgage bond holders.
December 22, 2005 at 11:30 AM in reply to: Differences Between The Tech Bubble and the Real Estate Bubble #23287KingKongParticipantAs a person who invested during the tech bubble, I can tell you that stock can also be bought on margins. Most tech companies has a 50% margin requirement.
So a stock holder can buy $100 worth of stock with $50 and carry the rest $50 with a loan of about 7%. If the stock drop to $50, he has a choice of either pay up the $50 and still hold the stock or sell the stock and got nothing for it.
The only difference between tech and RE bubble is the size of the leverage. In stock, you got a 1 to 2 leverage (50% margin). In RE, the leverage before all the easy credit was 1 to 5 (20% down) but now with all the new creative financing, the leverage is 1 to infinity (0% down and no closing cost).
Also the carrying cost is different. You can do the math.
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