Rent vs. Owning

[honobob]

Looks like a pretty good time to be a landlord or at least to not be renting. What are rents doing in your area?



San Francisco apartment rents climb fast in Q3
San Francisco Business Times - by J.K. Dineen
San Francisco apartment rental rates continued to rise in the third quarter, outpacing every city in United States except Seattle and Tacoma, according to a new report from Reis Inc., a New York-based research firm.

Asking rents in San Francisco have shot up 6.3 percent since the third quarter of 2007 to an average of $1,827 a month. Tacoma rates rose 7.3 percent while Seattle increased 7.1 percent. San Francisco rents are second only to New York, where renters shell out an average of $2,855.

The report comes as three major rental projects are under construction in the city: Trinity Properties' 1,900-unit development at 1169 Market St.; Avalon Bay’s 260-unit project at 355 King St.; and Urban Housing Group’s 192-unit project at 555 Mission Rock Blvd. In addition, New York developer Crescent Heights is considering building rentals rather than condos at its entitled two-tower development at 10th and Market.

Nationwide, the vacancy rate for U.S. rental apartment buildings rose to 6.1 percent in the third quarter as falling wages and a lack of jobs kept potential renters off the market, Reis reported. The average monthly asking rent rose 0.6 percent from the second quarter to $1,053, the 26th consecutive quarter that rents increased or stayed the same.

 

[ziggy29]

I don't think this is sustainable, especially not in lousy housing markets. As more people can't sell their homes for the price they need, expect the supply of rentals to rise -- perhaps considerably.

 

[ziggy29]

Having thought on this a little more, it could also be stated that rentals in downtown areas and other job centers may rise as gas prices and "peak oil" increase demand for living very close to work. But I think in outlying suburbs and exurbs, there will be a glut of rentals that people can't sell.

For example, this article talks about the rental boom *in* San Francisco -- makes sense given the increased desire to be able to walk to work because of gas prices. But if you went out to (say) Tracy or Stockton or Modesto, where so many people bought "cheap housing" over the last few years, you will see a simply terrible market. People are not moving into places that require 50+ mile commutes like they did with cheap gas.

 

[al_bundy]

run the math for your expected return compared to a bank account. i bet the bank account will still win

 

[calmloki]

Looks like Portland Oregon had home sales edrop 35% over the year ended June 2008, with median price SF homes dropping 2.1%. Local condo units are expected to be overbuilt within 3-5 years based on current and projected sales volume and are impacting the apartment market. "Unable to sell in today's environment, some condo units are being rented bby as much as $100-$150 less per month than a comparable apartment". This per Hendricks & Partners. They report average vacancy rate increase of 30 basis points and rent growth of 5.6% - the second highest rent 2nd quarter growth on record.

Down here in smallville Salem/Dallas/Monmouth I'd say that there are a bunch of single family homes that are/were for sale and are now competing with the regular SFH rentals. In apartments, i'm seeing low vacancy rates, but desperate tenants - several in one bedrooms have reported a desire to move to get a roommate and move into a two bedroom unit. Maybe a bit more criminal activity on their part to generate funds, late pays, or accomodations asked of us. Not a good time to be in lower middle class income strata.

 

[Notmuchlonger]

With all the information out on the internet. What do you believe?


34 cities where it's still better to rent - Rentals - MSN Real Estate

 

[honobob]

With all the information out on the internet. What do you believe?


34 cities where it's still better to rent - Rentals - MSN Real Estate

So it's BETTER to own in 66% of the top 100 cities and alot of them are in TEXAS! Well at least over the next four years and only if you're "Using a rule of thumb" and looking for "truly affordable homes". What the heck is that? When did they stop building those?

I've got to think 4 years is a short holding period for real estate and I have a hard time using average numbers that call "SF/Oakland/Fremont" a city.

 

[cho oyu]

Looks like a pretty good time to be a landlord or at least to not be renting. What are rents doing in your area?



San Francisco apartment rents climb fast in Q3
San Francisco Business Times - by J.K. Dineen
San Francisco apartment rental rates continued to rise in the third quarter, outpacing every city in United States except Seattle and Tacoma, according to a new report from Reis Inc., a New York-based research firm.

Asking rents in San Francisco have shot up 6.3 percent since the third quarter of 2007 to an average of $1,827 a month. Tacoma rates rose 7.3 percent while Seattle increased 7.1 percent. San Francisco rents are second only to New York, where renters shell out an average of $2,855.

The report comes as three major rental projects are under construction in the city: Trinity Properties' 1,900-unit development at 1169 Market St.; Avalon Bay’s 260-unit project at 355 King St.; and Urban Housing Group’s 192-unit project at 555 Mission Rock Blvd. In addition, New York developer Crescent Heights is considering building rentals rather than condos at its entitled two-tower development at 10th and Market.

Nationwide, the vacancy rate for U.S. rental apartment buildings rose to 6.1 percent in the third quarter as falling wages and a lack of jobs kept potential renters off the market, Reis reported. The average monthly asking rent rose 0.6 percent from the second quarter to $1,053, the 26th consecutive quarter that rents increased or stayed the same.

Oh blah. How on earth are rising rents relevant to buying a house in San Francisco?

Based on the average rent number, you could only purchase something that cost a little over $300k even when considering maximum tax advantages. Find a single dwelling in San Francisco that is selling for that price or even within $200k of that price.

And for that matter, find me more than a handfull of dwellings in San Francisco that aren't depreciating. Yes, I know you can (and will) cherrypick a few that have appreciated in the last year, but if we're doing city-wide statistics for rents, we have to do the same for purchasing. And it's pretty obvious to anyone with both a pulse and a bit of grey matter that you then have a losing argument.

 

[honobob]

Oh blah. How on earth are rising rents relevant to buying a house in San Francisco?

Based on the average rent number, you could only purchase something that cost a little over $300k even when considering maximum tax advantages. Find a single dwelling in San Francisco that is selling for that price or even within $200k of that price.

And for that matter, find me more than a handfull of dwellings in San Francisco that aren't depreciating. Yes, I know you can (and will) cherrypick a few that have appreciated in the last year, but if we're doing city-wide statistics for rents, we have to do the same for purchasing. And it's pretty obvious to anyone with both a pulse and a bit of grey matter that you then have a losing argument.

Huh?

 

[honobob]

I don't think this is sustainable, especially not in lousy housing markets. As more people can't sell their homes for the price they need, expect the supply of rentals to rise -- perhaps considerably.

The average monthly asking rent rose 0.6 percent from the second quarter to $1,053, the 26th consecutive quarter that rents increased or stayed the same.
__________________

 

[honobob]

Oh blah. How on earth are rising rents relevant to buying a house in San Francisco?

Based on the average rent number, you could only purchase something that cost a little over $300k even when considering maximum tax advantages. Find a single dwelling in San Francisco that is selling for that price or even within $200k of that price.

And for that matter, find me more than a handfull of dwellings in San Francisco that aren't depreciating. Yes, I know you can (and will) cherrypick a few that have appreciated in the last year, but if we're doing city-wide statistics for rents, we have to do the same for purchasing. And it's pretty obvious to anyone with both a pulse and a bit of grey matter that you then have a losing argument.

http://www.early-retirement.org/forums/newreply.php?do=newreply&p=701271

Cherry pick?

 

[CuppaJoe]

The average monthly asking rent rose 0.6 percent from the second quarter to $1,053, the 26th consecutive quarter that rents increased or stayed the same.
__________________

Just curious, Honobob, what would an average $1,053 apt. look like?

 

[honobob]

Just curious, Honobob, what would an average $1,053 apt. look like?

Made me look! Studio Open House--Tue, Oct 7 and Wed, Oct 8

125 Square feet. Isn't market in your neighborhood $3,500-$4,500?

http://sfbay.craigslist.org/sfc/apa/862319813.html Hey, here's your NBHD. Shared bathroom? I wouldn't call this an apartment.

 

[ziggy29]

The average monthly asking rent rose 0.6 percent from the second quarter to $1,053, the 26th consecutive quarter that rents increased or stayed the same.

I think that's a lagging economic indicator.

My point remains: In the suburbs and exurbs, there is going to be an increasing glut of rentals coming from people who can't sell.

Many city downtowns may buck this trend because of an increase in interest in living where you can walk to everything in the face of gas prices and peak oil. But just because the rental markets may be recently hot in a few places doesn't mean that will continue, and it ignores the fact that much of the overall rental market isn't in the city center.

 

[honobob]

And for that matter, find me more than a handfull of dwellings in San Francisco that aren't depreciating.

if you want the good news I'll be happy to email you the report I just got that has 761 resales in San Francisco (18 pages total) that shows mostly double digit appreciation and quite alot of triple digit appreciation!! and not ONE decline in value. First sale in 05,06,& 07 and resold in 07 or 08.

 

[CuppaJoe]

Made me look! Studio Open House--Tue, Oct 7 and Wed, Oct 8

125 Square feet. Isn't market in your neighborhood $3,500-$4,500?

Room in Residential Hotel Hey, here's your NBHD. Shared bathroom? I wouldn't call this an apartment.

Thanks, Honobob, that is too funny. Gotta love the child-size furniture and the Bernal Heights place leaves a lot for reading between the lines, and, of course, no pets. Now I understand why people pay $1,950 - $2,150 for normal sized studios.

 

[honobob]

Actual lines in SF craigslist ads.

Separate Entrance to your bedroom and bathroom. There is no living room or kitchen.

Admit it! It’s a studio!

Full ventialization thru mechanical fan to compensate the lack of window

Ventialization? I can’t breathe.

Landlord only speaks Chinese, so prefers Tenant can speak Chinese.

Cantonese or Mandarin?

It's quiet, has amazing Muni access, and the best Vietnamese sandwiches in town around the corner.

Hey, this is where OAP ate.

LARGE ROOM FOR RENT HAS NEW CARPET,WALK IN CLOSET AND MATERNAL BED.

Complex or not, my girl ain’t getting in the maternal bed!