You can't increase our rent.
There are over 2 million vacant unwanted homes in America today. There's a 6% vacancy rate in apartments. There are millions of screwed desperate homedebtors ("Floplords" - hattip sac landing) desperately trying to find renters to cover (some of) their second home mortgages. And the housing-led economy is quickly going into the crapper.
If you try to raise our rent, there's millions of other places for us to go. You have no pricing power. And you don't set the rent - the market does.
Bitter Renters and Bubble Sitters rejoice. You have the power in America today. Enjoy it.
Good Time for Tenants - Real estate slump pushes house rents down
Many people are trying to hold onto houses they purchased as investments by becoming landlords. That has flooded the Northern San Joaquin Valley rental market with houses, pushing down rents and forcing landlords to compete for tenants.
Many rental properties originally were bought by speculators who got caught in the real estate downturn, explained Paula Leffler Zagaris, whose Liberty Property Management company manages 1,500 rental houses.
"They were gambling," Zagaris said of investors who intended to quickly sell — or "flip" — houses to cash in on rising property values. "Anybody who did that before October 2005 was a genius and made a lot of money. … But if they bought after that, they're stuck."
50 comments:
Some terms prospective landlords should become familiar with:
HPS
halide
hydro
dirt
clone
skunk
215 (California only)
card
mold
stink
asset forfeiture
420
This went up yesterday, but when I saw it I had to thourgh in my two cents. So it's getting a run here (don't worry, there's a tie-in with Jack Tripper!):
"Anonymous said...
Is there any way a class action lawsuit could be initiated by honest homeowners against any part of or all of the REIC, for fraud, loss of $$$, and so on?
April 25, 2007 3:26 AM"
I have to imagine a class action would be near impossible. But it sure would be fun and entertaining to watch David Learah get hauled onto a courtroom floor and squirm on the witness stand. The coverage from the mainstream media would be intense, especially when he's examined about his book "Are You Missing the Housing Boom?" Lerah would resemble Keith's photo of Jack Tripper! And I bet Robert Shiller of "Irational Exuberence" fame would be overjoyed to testify as an expert witness.
So how about HP filing a civil suit for Learah being a shameless huckster? The longer and more severe the housing fall becomes, the more supportive the public will be in outing a fool like Learah. New legal groundwork could be made for reigning in morons and the harm they bring about. As a part of the civil suit HP could seek a public apology and 20,000 hours of community service (Learah picking up trash in every park across the country.)
You might also care to consider the fact that leverage or margin is now at its highest level in the US since 1929, the year of the Great Wall Street Crash. Or care to note that 90 per cent of stocks are not trading at all-time highs. It is only the performance of the top 10 per cent that produce these record index readings
Is a Watermelon a fruit or vegatable?
It won't be time to buy a home until the rental market turns around (and that's a turn in real dollars-> not an inflation turn!)
The rental market in Florida is VERY soft. In one year, we have moved from an extremely healthy rental market of above 95% occupancy to around 93% which is a huge drop. The number is projected to go even lower. When the number gets close to 90%, landlords start to panic.
In one year we have gone from having waiting lists to not being able to find qualified renters at most of our properties. We are cutting rents at one property and considering it at others.
I forgot to mention the reason for the soft market in Florida. The drop in the occupancy rate is due to the HUGE number of unoccupied condos that were purchased over the last several years and the condo projects that are starting to turn into apartments. The rental market is VERY saturated with condo reconversions and mom and pop landlords.
Supply and demand is painful if you're on the wrong end on the way down.
"As a part of the civil suit HP could seek a public apology and 20,000 hours of community service (Learah picking up trash in every park across the country.)"
Learah's community service should be performing lawn maintenance at abandoned homes.
Dow over 13,000 for first time in history! Everything is GREAT! now STFU
I don'tknow about that. I needed to rent a home in Las Vegas last month. I used craigslist mainly and a lot of homes were gone by the time I called. I made a few below asking offers and was turned down by all. Price rangw was $1800-2000.
Maybe in SoCal it's different, in LV renters don't quite have the upper hand, at least not in the higher end.
I've asked this before, but can someone tell me in English English what the difference is between a condo and an apartment?
A Condo is just like an apartment but you buy and own it. You pay a Home Owners Association Fee and Taxes on a Condo. An apartment is an apartment that you rent.
Floplord describes my grandmother's neighbor perfectly. This guy bought the house next door, at, guess when - Sept 2005, at the exact end of the bubble. So this guy is over at my grandmother's house hobnobing like he's Donald Trump, tell's her bought the place for $280k and intends to flip it for $400k or something. She calls me up and tells me she thinks her house is worth similar - I'm like no, that guy's a fu*kin moron.
So he put's the house on the market and it sits for a couple months. By December he's back over at my grandma's telling her the market's soft due to the fall months, never mind that shit was selling fast before that. So then he tries to rent it out for $1500/month. We're talking this is an older neighborhood in Las Vegas, where you could get a nice 3 bed for $1200/month in Summerlin. The guy was turning down tenants and sticking firmly with $1500/month, so again it sits for a while vacant. So by March or something he finally finds some tenants willing to pay his price. Fast forward six months, and here comes the SWAT team - apparently the tenants were selling drugs, meth, whatever out of the house.
So now our floplord friend is again stuck with the vacant house, this time with *unwanted renovations*. He's back hobnobing again with my granny as he works on the house, telling her that the market is soft but will bounce back in 2007. Obviously still in denial. By some stroke of luck though he found some illegal alien tenants, like 2-3 families crammed into the house.
Almost 2 years later and I just zillowed the house - it's worth $270k. And we all know zillow estimates are very sticky on the way down.
Dow 13,000 today, correlating with pathetic YOY new home sales (on the heels of pathetic existing home sales)--although with the margin of error, all of these government statistics are reasonably useless.
"Sales of new one-family houses in March 2007 were at a seasonally adjusted annual rate of 858,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 2.6 percent (±12.9%)* above the revised February rate of 836,000, but is 23.5 percent (±7.9%) below the March 2006 estimate of 1,121,000."
--dark1p
SITCOMs Single Income, Two Children, Oppressive Mortgage
Lawsuits? How's that any different than a bailout. If you bought at the top of the market, you're losing money. You also deserve to lose money. Hopefully the society (and you) will learn from your example what not to do, how not to live from your actions.
People, especially homedebtors need to take responsibility for their actions. If you lost money, suck it up. Or declare bankruptcy. At least you're not going to debtors prison (except hopefully Casey Serin).
As bad as the corrupt Lereah is, he is morally superior and socially beneficial when compared to the shyster hucksters selling fools the belief that their actions are not to blame for their predicament, that they are somehow "victims" of others actions.
This is how it works. Now "bitter renters" will get more house for less money in the finest neighborhoods, while overpriced crap in ghettoes will sit vacant.
Zillow is a piece of shit, if it was valid then why don't lenders use it?
Also, for all you mortgage experts, First Franklin just called me to approve a 600 score to 95% LTV...........wow, what a subprime shakeout this is...LOL
Oh man, this throws a giant wet-blanket on the wannabes who come on here and say they as landlords hold the cards! Those who own property and rent it out are not nearly as clever as they like to think.
They're royally screwed, and they think they're the "upper crust" of society!
Ha ha ha ha ha ha!!!
Sorry to burst your rental bubble.
but my one bedrooms in LA are getting $1650.00 2 bedrooms are $2450.00
3 bed are $2950.00
I have a waiting list in 2 of my buildings.
I know this blog covers the whole nation and I don't mean to brag
but I am not even getting top rent in the neighborhood. (miracle mile).
If i was a landlord in parts Arizona
and other low demand markets I may be a little worried but I am not!!!!
Good luck trying to find a bargain in my world.
For the first time, the city of Seattle has earned a spot in the $1,000 club. That means it now costs at least $1,000 per month to rent an average apartment in the city.
Seattle rent has been creeping higher and higher. In the past year, rental rates in Seattle jumped nine percent. And an average one-bedroom apartment, which used to rent for $925 per month, now rents for $1,004.
According to the survey by RealFacts research, only seven other West Coast cities have earned spots in the $1,000 club, and they're all in California. The survey says Tucson, Arizona offers the cheapest rent.
Rising rates have some renters running to the outskirts of Seattle - a move that clogs the commute.
"As much as I'd prefer to live here (in the city), I can't afford it. The cost of living is ridiculous," said one renter, Samson Grigorian.
Housing statistics show only about half the people who work in Seattle live in Seattle. Most of them have the lowest incomes, so they qualify for housing help.
I own multi-unit apartment complexes and the last 18 months have been the best months in the past 5-6 years. I have been able to consistently raise rents whenever a tenant moves out and fill it within 30 days. Rents have probably increased 10-15% over the last 18 months. We no longer have to provide "movein" incentives to attract tenants.
for a smallish complex (~30 units) I budget for 6-7% vacancy, just because of churn (figure a good number of the units will turn every 12 months).
Good times!
"Sales of new one-family houses in March 2007 were at a seasonally adjusted annual rate of 858,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 2.6 percent (±12.9%)* above the revised February rate of 836,000, but is 23.5 percent (±7.9%) below the March 2006 estimate of 1,121,000."
Hold on. March has 31 days, and February has 28 days.
February 2007: 30,000/day
March 2007: 27,000/day
So the March figure was in actuality BELOW the February figure? I thought March was supposed to be the spring peak?
Anonymous said...
Sorry to burst your rental bubble.
+++++++++++++
No need to apologize. You haven't burst anything. Parts of Phoenix are nasty, but LA is far worse -- the worst polluted sh|thole this side of the Mississippi. Anyone who lives there, much less pays high rent prices, deserves what they get.
Anyway, you appear to be talking about apartments, and I'll bet your renters can find rental houses not too far away for around the same $ per month.
Why call us bitter renters? I am renting a new condo for $8000 less per year than if I bought it. (Taxes, insurance, and payments)I think we should be called "Happy Renters". Those that bought homes during the bubble should be called "Bitter Buyers".
Anonymous said...
Zillow is a piece of shit, if it was valid then why don't lenders use it?
Also, for all you mortgage experts, First Franklin just called me to approve a 600 score to 95% LTV...........wow, what a subprime shakeout this is...LOL
_____
Wow, are you dumb.
Zillow doesn't claim to be authoritative, and certainly not something lenders would use to appraise homes. Having said that, every house I know the details on, Zillow is amazingly accurate. It's accurate enough that it gives fits to sleazy realtors trying to pump an overpriced home...I'll bet you belong to that camp, don't ya, tiger?
We have real live corrupt humans to provide the appraisals, skillfully and magically providing whatever number the seller and bank need.
Your insignificant little anecdote about First Franklin has no bearing on the very real and very widespread subprime and Alt-A meltdown. Even the mainstream media acknowledge this meltdown.
Whatever, creep...say what you need to in order to convince yourself that the giant Ponzi scheme is not disintegrating.
Too bad you didn't pay better attention in school so you could get yourself a real job.
Have a buddy. Bought a little 2 bed "rehabbed" it, tried ot sell it fro profit. NO takers. Now he's renting it out for $500 less than his PITI! oh boy
I am teaching myself to unlearn deep conditioning about buying a home. I am trying to forget the whole thing for several years. It's affecting my sanity.
Dow over 13,000 for first time in history! Everything is GREAT! now STFU
April 25, 2007 1:46 PM
-----------------------------
Unfortunately, it has nothing to do with our current state of the economy or housing. Companies are reporting profits, but 50% of sales made by U.S. based corporations are now outside the United States to foreign markets. To put it short, our economy can go down the shitter and the stock market can still go up. Must suck to own a home right now and be illiquid, ouch.
This is true, renters are in control these days. I have worked in the industry for 10 years and rental business has never been so competitive.
That said, all renters should rent well below their means and save at least 30% of their income to buy a house paying cash.
Just a simple example would be a college grad that makes about $35K to start (about $2500 a month after taxes). If he lived in a 1 bdrm apartment for $500, drove a used cash car that he had in college, and was smart with his money he could save at least $12K per year in cash.
Keep saving and when the firesale on housing is fully underway he will be able to pickup a nice home. People in their 20s and early 30s usually change jobs and move around a lot so home purchasing should really not be done until your mid 30s in most cases. You will have close to or over $200K in cash in 15 years (by the time you are 37.
This is money aside of the investments you have on your own for retirement. In a post crash world $200K will buy a pretty nice house. Of course, you have to be smart and buy something that is not beyond your means if the market were to go into a psycho cycle again.
Many people in my family did it this way and they were for the most part not impacted by the bubble directly. They did not finance so it did not matter what the rates did. They only has problems with insane taxes caused by the prices that more than doubled between roughly 1997 and 2006.
Anonymous said...
Also, for all you mortgage experts, First Franklin just called me to approve a 600 score to 95% LTV...........wow, what a subprime shakeout this is...LOL
April 25, 2007 3:35 PM
Good luck w/ that FB.
I think we should import mortgage products from China and Japan. They each have about 1 trillion dollars in US currency reserves that they can lend to mortgage borrowers in the US. Japan’s mortgage interest rate is only 2.375%. Banks and lending institutions should be forced to compete globally, just like the manufacturing industry.
I have watched what has happened in the US housing from up here in Canada. I work for www.bytheowner.com and we help people sell their home without using an agent. We have not had the crash that you have had in the states. Does anyone think the same will happen in Canada, or also, do you find that more people are selling FSBO because the prices have dropped so much in the states?
DJIA above 13000 and zillow says my home increased by 10k! yea baby, time to draw down on my HELOC and buy that hummer I have been looking at!
$1650/month rent for a 1 bdr in Miracle Mile?!? Kudos to you for finding such fools.
Meanwhile, I'm safely ensconced in my rent-stabilized ($716/month) 1 bdr in West Hollywood waiting (and saving lots of $$$) for the bubble to finally pop in the LA area (it appears that prices are just now beginning to peak). I'm guessing that 2009 or 2010 will be a good time to start thinking about buying.
I'm... not sure that makes sense. (I'm not an "HP hater" by any means, btw...)
It would seem to me that if more people are renting versus owning, then demand for rental houses or apartments goes up... and so does the rent.
Builderonline.com, in fact, has an article about this very thing - and this source is one that is espoused by HP'ers.
http://tinyurl.com/2bn5zh
I'm no expert by any means... I just don't see how rents could fall (with my limited knowledge.)
- Anonymous non-hater in Austin TX
Sorry to burst your rental bubble. I have a waiting list in 2 of my buildings.
Apples and oranges...
We are talking about houses and condos, NOT apartments.
Maybe your "renters" just aren't hip to what their housing dollars could get them.
I believe vegetable and recently named proud member of the cucumber/gourd family.
Oh man do I wish this were true in the San Francisco bay area. But rents are going up and I just spent 3 weeks looking for another place closer to work. Nothing. They all want to much for junk. Mostly mlder homes and apartments, probably rife with mold going for outragous rents. But they always seem to find someone to rent their trash. Seems all the busted homeowneers are back flooding the rental market. This sucks.
I just heard that Shawn Hannity clown on the radio a few minutes ago. Some woman from California called his show and tried to tell him what RE was like in her neck of the woods. He put her off with some government statistics that show how strong the economy is, and what a great job Bush is doing.
Yeah right.
I recently bought a nice little home in Nashville since my wife and I just relocated. Our 3 br, 2.5 ba, .5 acre lot in a quiet subdivision- $140k. With a 20% down payment, my total mortgage payment is around 800 bucks; rent for this house would be around 850-900 a month here.
I like living in the south.
I have to agree with Anon, rents haven't gotten any cheaper at all here in Southern Cal.
Perhaps they will in the future, but I really doubt it.
More good news for California renters. This will probably result in more rental properties coming on the market. Renters sit back and enjoy the show.
Study: California Foreclosures Up 68 Percent
(CBS) IRVINE, Calif. California reported 80,595 first-quarter foreclosure filings, about 18 percent of the national total and numerically more than any other state, according to figures released Wednesday by Irvine-based RealtyTrac.
Foreclosures increased 68 percent statewide from the previous quarter and more than doubled from the first quarter of 2006, resulting in a foreclosure rate of one foreclosure filing for every 152 households -- fifth highest among the states and 1.7 times the national average, according to RealtyTrack.
With 45,156 foreclosure filings during the quarter, Florida ranked second among the states in terms of total foreclosure activity.
Nationwide, first-quarter foreclosure rates were up 35 percent compared to the same quarter last year. Default notices, auction sale notices and bank repossessions totaled 437,498, making the foreclosure rate of 1 per 264 households the highest since RealtyTrac began issuing its report 27 months ago.
"Certainly the surge in subprime defaults has contributed to the overall rise in foreclosures; we estimate that more than 50 percent of the foreclosure activity we charted in the first quarter was from subprime loans," said RealtyTrac Chief Executive Officer James J. Saccacio.
"However, it's not just low-end homes that are going into foreclosure; we're seeing a rising percentage of foreclosures with an estimated market value of more than $750,000."
Nevada had the highest first-quarter foreclosure rate -- 1 per 75 households -- with a total of 11,514 foreclosure filings, an increase of 66 percent from the previous quarter and more than double the total reported in the first quarter of 2006.
Longtime HP readers know "bitter renter" and "flying monkey" are badges of honor we wear. It's the Greg Swanns of the world who call HP'ers such things, so we put it right back in his face by wearing the tags proudly
Yes, the people who sold at the peak and rent (bubble sitters, bitter renters) are OVERJOYED FRICKING RENTERS, or BEYOND HAPPY BUBBLE SITTERS, who are putting away lots of cash every month into something called 'savings', while avoiding big-time depreciation on a dead inventory house
Hope that helps.
Here's how things went when I rented my current residence in Newport Beach CA:
- Asking rent: $3,950
- Homedebtor immediately lowered to $3,750 when I showed interest.
- I counter offered $3,350.
- Final price: $3,500
...on a house the homedebtor paid $1.2M for!!! Yes that's ONE POINT TWO MILLION!!!
Hopefully he won't get foreclosed anytime soon.
Still very easy to get a loan with good rates. I have not seen a changed in the ease of a liars loan. The mortagage guy i have used in socal, tx, utah have no problem doing stated income loans. All this talk from KEITH and the rest on this blog about tightening credit and prices dropping i don't see it. Don't read your so call static go out and try to get a loan then back out or make low ball offer on a used house a you will not see people dropping there price. Maybe new home builder have thrown in incentives i'll give you that but a 211,000 median homes price, where? Even in salt lake , austin , nv you cannot find anything worth a damn at that median. If you did not buy already you are priced out for a long time. stop lying to yourself. your priced out. I bought a condo 2 years ago outside of salt lake for 120,000 and rented to a couple who said they would rent for a year or 2 then buy. Those condo are selling for 210 to 230,000 now what will they do?
corvinus said...
"Sales of new one-family houses in March 2007 were at a seasonally adjusted annual rate of 858,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 2.6 percent (±12.9%)* above the revised February rate of 836,000, but is 23.5 percent (±7.9%) below the March 2006 estimate of 1,121,000."
Hold on. March has 31 days, and February has 28 days.
February 2007: 30,000/day
March 2007: 27,000/day
So the March figure was in actuality BELOW the February figure? I thought March was supposed to be the spring peak?
April 25, 2007 4:54 PM
----------
Not sure. If these sales #s are "closings" then the numbers reflect contracts cut 30-60 days prior. If they are "contracts" then they would reflect the current activity, but would not be final #s because some contracts are canceled for one reason or another. I think they are "contracts" because they ways adjust the prior month's #s down somewhat. I think the actual peak for contracts is April-May, because most people what to move in by July-early august so they can get in a vacation & get the kids settled for school etc. Hope it helps. Joe
>>>She calls me up and tells me she thinks her house is worth similar - I'm like no, that guy's a fu*kin moron.<<<
Keith, you didn't curse while talking to your Nanna, did you? LOL You better be careful, she may still wield a mean wooden spoon LOL
house prices in slc will come down. to many speculator not investors, speculators. check out mls #661476 in draper this house has drop in price considerably and is much nicer then other house asking much more. All though suncrest homes way overpriced and speculator drove up price and now there renting townhouse up in suncrest for $1500 which they bought for 3 to $400,000 those #'s don't work.
Post a Comment