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Updated almost 2 years ago, 01/14/2023
Housing crash deniers ???
Unfortunately I've been away for a few months while taking care of some personal matters, so I haven't been able to keep up on discussions.
However, several months ago there were ample amount of folks here insisting that a market crash/ correction was impossible and that prices would only continue to increase.
Curious if there are still people out there who feel this way? If so, I'd love to see some data that supports your view that the market isn't going to crash/ correct.
Quote from @John Carbone:
a bad deal for everyone (albeit better for usa)
#1 Market Trends & Data Contributor
I got it. I still stand by sex and booze though, lol
So I checked this data, and it seems the cannabis store has increased sales 4x and liquor store is like 3x sales compare to 2019. I think you've point in this very particular subject LOL
Classical store like Kohl is losing money but cannabis store makes fortune. It's reality.
Quote from @Carlos Ptriawan:
I got it. I still stand by sex and booze though, lol
So I checked this data, and it seems the cannabis store has increased sales 4x and liquor store is like 3x sales compare to 2019. I think you've point in this very particular subject LOL
Classical store like Kohl is losing money but cannabis store makes fortune. It's reality.
Quote from @Carlos Ptriawan:
I got it. I still stand by sex and booze though, lol
So I checked this data, and it seems the cannabis store has increased sales 4x and liquor store is like 3x sales compare to 2019. I think you've point in this very particular subject LOL
Classical store like Kohl is losing money but cannabis store makes fortune. It's reality.
Well alcohol shot through a roof when covid hit so no surprise. When stocking up on food I may have stocked up on more cases of wines and whiskey….
And Kohls actually did an admirable job of pushing back for a long time. Simple reality is retail wise long term it will be just Amazon, Walmart and target and then the subscription discounter companies like Costco. Malls will be no more soon enough.
#1 Market Trends & Data Contributor
Quote from @John Carbone:
Quote from @Carlos Ptriawan:
I got it. I still stand by sex and booze though, lol
So I checked this data, and it seems the cannabis store has increased sales 4x and liquor store is like 3x sales compare to 2019. I think you've point in this very particular subject LOL
Classical store like Kohl is losing money but cannabis store makes fortune. It's reality.
Check the store sales, the TLRY may not that representative:
Trending around rent vs home ownership: https://www.thestreet.com/real...
Looks like buying is never bad if you plan to rent…. Slightly tongue in cheek but I don’t think too many people here are going to be hurting.
#3 Real Estate News & Current Events Contributor
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#3 Real Estate News & Current Events Contributor
- Real Estate Broker
- Minneapolis, MN
Quote from @Michael Wooldridge:
Trending around rent vs home ownership: https://www.thestreet.com/real...
Looks like buying is never bad if you plan to rent…. Slightly tongue in cheek but I don’t think too many people here are going to be hurting.
LMAO: "If you decide to rent, you may benefit from a recent decline in prices. The median asking rent in the top 50 cities dipped 0.7%, or $12"......
Holly-cow, $12 whole dollars per month, lol, what will tenants do with all that spare cash.....
- James Hamling
Quote from @James Hamling:
Quote from @Michael Wooldridge:
Trending around rent vs home ownership: https://www.thestreet.com/real...
Looks like buying is never bad if you plan to rent…. Slightly tongue in cheek but I don’t think too many people here are going to be hurting.
LMAO: "If you decide to rent, you may benefit from a recent decline in prices. The median asking rent in the top 50 cities dipped 0.7%, or $12"......
Holly-cow, $12 whole dollars per month, lol, what will tenants do with all that spare cash.....
It’s not a bad option to do that for a year and see what happens. I know someone whose doing just this based on my recommendation. They are renting a 4 bed house for $2500. If they were to buy the same house (similar house in same subdivision) just sold and the monthly payment all in would have been $2950. So he’s saving $450 a month (let’s call it a wash since he would have about $450 in principle paid off if he owned) but he’s investing the $100k downpayment at effective 6 percent right now. He is going to buy next September and the flexibility is also worth something to him as well. Was a no brainer decision. It’s not a long term good option though.
Quote from @Greg R.:
Quote from @Dan H.:
Quote from @Greg R.:
Quote from @Michael Wooldridge:
Quote from @Carlos Ptriawan:
@Carlos Ptriawan rent data is messy as you pointed out earlier in this thread. ON an annualized basis which is what I was referencing it hasn't happened. Would love to zoom in on the dollars in that monthly swings refin one is there a link to the chart? Meanwhile annualized data from multiple sources:
OK understood, I use quarterly (short-term data) while you use long-term smoothed data, obviously, the result would be different.
I also want to point out, if 2019 data has the rent-to-income ratio as 20.1% but in 2022 it's 20.5%, the line is actually stagnant, there's no real actual rent increase although the $ seems to increase. that's just an adjustment to wage.
Yep I'm just not concerned with short term shifts because every market/investment has it. I try and look at the trend over time.
As to the bolded section stagnation has happened. I would fully agree and go so far to say I expect it this coming year. But hte funny thing about inflation/wage adjustment:
1) I've made that very argument as to one of the main reasons why rent won't drop next year. It's not that far off if you adjust for the last 12 months of wages and inflation.
2) my primary reason for calling out rents have never dropped annually is because of @John Carbone prediction that rents are going to drop and people will magically be hurting the next year for profits if they bought recently. Historically that has just not happened. Especially in such a good job market (and even 5% unemployment is good if the fed can even push it that high) and while inflation is happening.
This is a suburb of San Diego, not a lot of rental availability and rents are very high. I have rentals in the same city and every time I have a vacancy it's like a black Friday sale. Seemingly hoards people lined up around the block - a lot of them good A+ grade renters.
Rents San Diego county wide have continued going up even as RE prices have fallen. YOY in my market the rent appreciation has averaged over 10%. $4k was always high rent for that unit. Rentometer lists the average as $3450 based on six 4 BR comps. It also shows that the highest rent ever for that unit is the current rent.
This property has been owner occupied for almost 10 years, so there's no recent/ relevant rental history for this exact property. I agree that the original listing price was too high, but I've seen other similar properties go for around 4k. He is renting it furnished with an 80" TV. These kinds of prices have been common in East county over the last year. I'm a bit surprised he can't find a renter for $3,550
It was not clear to me that it was being rented furnished. I do not know how furnished affects LTR rates. If it is furnished, did they consider STR or MTR? we have local STRs that have done well, but they are not in El Cajon
as for those “comps”…. They are not comps as neither referenced is rented and the second has been listed over one month. The first has been listed at least 18 days. it has been years since one of my rentals took 18 days to rent. Comps have to have found tenants willing to pay the rent. Rentometer is fairly accurate and used 6 comps.
if the property is special, it can dictate rents far above the average rent but it has to have something making it special.
Quote from @Carlos Ptriawan:
Quote from @Dan H.:
Quote from @Greg R.:
Quote from @Michael Wooldridge:
Quote from @Carlos Ptriawan:
@Carlos Ptriawan rent data is messy as you pointed out earlier in this thread. ON an annualized basis which is what I was referencing it hasn't happened. Would love to zoom in on the dollars in that monthly swings refin one is there a link to the chart? Meanwhile annualized data from multiple sources:
Rents San Diego county wide have continued going up even as RE prices have fallen. YOY in my market the rent appreciation has averaged over 10%. $4k was always high rent for that unit. Rentometer lists the average as $3450 based on six 4 BR comps. It also shows that the highest rent ever for that unit is the current rent.
In Bay Area rents already going down, especially for rental above $4k. It's just making non-sense to rent a house for $4k since at this rate one can already purchase primary (even in a condo). they move back to the $3k range just like what Greg mentioned previously. For rental at this price range usually, they have a personal reason why they haven't purchased one yet (either lifestyle choice, immigrant status or may move to texas lol)
The cheapest condo in South bay is now $499,999 why do folks want to rent...
At 80% LTV at 7%, PITI is ~$3,120. Add HOA and maintenance/cap ex and it increases the monthly costs. To get 80% LTV requires $100k plus closing costs. How many first time buyers have over $100k? FHA at 96.5% LTV at 7% has PITI of ~$3670. With HOA and maintenance/cap ex this is likely over $4k.
My point is that both these cases are not easy for many first time home buyers. In addition some tenants just prefer to rent over buy. There are many reasons they could have this mindset including mobility, belief that money can be invested elsewhere, prefer to use the money to have fun (toys, parties, etc).
Quote from @Dan H.:
Quote from @Greg R.:
Quote from @Dan H.:
Quote from @Greg R.:
Quote from @Michael Wooldridge:
Quote from @Carlos Ptriawan:
@Carlos Ptriawan rent data is messy as you pointed out earlier in this thread. ON an annualized basis which is what I was referencing it hasn't happened. Would love to zoom in on the dollars in that monthly swings refin one is there a link to the chart? Meanwhile annualized data from multiple sources:
OK understood, I use quarterly (short-term data) while you use long-term smoothed data, obviously, the result would be different.
I also want to point out, if 2019 data has the rent-to-income ratio as 20.1% but in 2022 it's 20.5%, the line is actually stagnant, there's no real actual rent increase although the $ seems to increase. that's just an adjustment to wage.
Yep I'm just not concerned with short term shifts because every market/investment has it. I try and look at the trend over time.
As to the bolded section stagnation has happened. I would fully agree and go so far to say I expect it this coming year. But hte funny thing about inflation/wage adjustment:
1) I've made that very argument as to one of the main reasons why rent won't drop next year. It's not that far off if you adjust for the last 12 months of wages and inflation.
2) my primary reason for calling out rents have never dropped annually is because of @John Carbone prediction that rents are going to drop and people will magically be hurting the next year for profits if they bought recently. Historically that has just not happened. Especially in such a good job market (and even 5% unemployment is good if the fed can even push it that high) and while inflation is happening.
This is a suburb of San Diego, not a lot of rental availability and rents are very high. I have rentals in the same city and every time I have a vacancy it's like a black Friday sale. Seemingly hoards people lined up around the block - a lot of them good A+ grade renters.
Rents San Diego county wide have continued going up even as RE prices have fallen. YOY in my market the rent appreciation has averaged over 10%. $4k was always high rent for that unit. Rentometer lists the average as $3450 based on six 4 BR comps. It also shows that the highest rent ever for that unit is the current rent.
This property has been owner occupied for almost 10 years, so there's no recent/ relevant rental history for this exact property. I agree that the original listing price was too high, but I've seen other similar properties go for around 4k. He is renting it furnished with an 80" TV. These kinds of prices have been common in East county over the last year. I'm a bit surprised he can't find a renter for $3,550
It was not clear to me that it was being rented furnished. I do not know how furnished affects LTR rates. If it is furnished, did they consider STR or MTR? we have local STRs that have done well, but they are not in El Cajon
as for those “comps”…. They are not comps as neither referenced is rented and the second has been listed over one month. The first has been listed at least 18 days. it has been years since one of my rentals took 18 days to rent. Comps have to have found tenants willing to pay the rent. Rentometer is fairly accurate and used 6 comps.
if the property is special, it can dictate rents far above the average rent but it has to have something making it special.
Just my $.02--I've been watching the El Cajon rental market for the last two years and have seen no decreases yet. I know there aren't many 4 bedroom units out there but part of me wonders if families or groups of people that could use the 4 bedrooms would really want to have more than 1 bathroom.
#1 Market Trends & Data Contributor
Quote from @Dan H.:
At 80% LTV at 7%, PITI is ~$3,120. Add HOA and maintenance/cap ex and it increases the monthly costs. To get 80% LTV requires $100k plus closing costs. How many first time buyers have over $100k? FHA at 96.5% LTV at 7% has PITI of ~$3670. With HOA and maintenance/cap ex this is likely over $4k.
My point is that both these cases are not easy for many first time home buyers. In addition some tenants just prefer to rent over buy. There are many reasons they could have this mindset including mobility, belief that money can be invested elsewhere, prefer to use the money to have fun (toys, parties, etc).
very true indeed from another renter POV. With 0.67 mortgage/rent ratio in CA ,renting is cheaper.
My previous sample is if the buyer would like to buy anything inside renting, the condo is becoming much cheaper now, price that used to be $650k now it's only $450k. They just need to buy lower tiered housing as James mentioned before.
#1 Market Trends & Data Contributor
Quote from @Maya Gorski:
Quote from @Dan H.:
Quote from @Greg R.:
Quote from @Dan H.:
Quote from @Greg R.:
Quote from @Michael Wooldridge:
Quote from @Carlos Ptriawan:
@Carlos Ptriawan rent data is messy as you pointed out earlier in this thread. ON an annualized basis which is what I was referencing it hasn't happened. Would love to zoom in on the dollars in that monthly swings refin one is there a link to the chart? Meanwhile annualized data from multiple sources:
OK understood, I use quarterly (short-term data) while you use long-term smoothed data, obviously, the result would be different.
I also want to point out, if 2019 data has the rent-to-income ratio as 20.1% but in 2022 it's 20.5%, the line is actually stagnant, there's no real actual rent increase although the $ seems to increase. that's just an adjustment to wage.
Yep I'm just not concerned with short term shifts because every market/investment has it. I try and look at the trend over time.
As to the bolded section stagnation has happened. I would fully agree and go so far to say I expect it this coming year. But hte funny thing about inflation/wage adjustment:
1) I've made that very argument as to one of the main reasons why rent won't drop next year. It's not that far off if you adjust for the last 12 months of wages and inflation.
2) my primary reason for calling out rents have never dropped annually is because of @John Carbone prediction that rents are going to drop and people will magically be hurting the next year for profits if they bought recently. Historically that has just not happened. Especially in such a good job market (and even 5% unemployment is good if the fed can even push it that high) and while inflation is happening.
This is a suburb of San Diego, not a lot of rental availability and rents are very high. I have rentals in the same city and every time I have a vacancy it's like a black Friday sale. Seemingly hoards people lined up around the block - a lot of them good A+ grade renters.
Rents San Diego county wide have continued going up even as RE prices have fallen. YOY in my market the rent appreciation has averaged over 10%. $4k was always high rent for that unit. Rentometer lists the average as $3450 based on six 4 BR comps. It also shows that the highest rent ever for that unit is the current rent.
This property has been owner occupied for almost 10 years, so there's no recent/ relevant rental history for this exact property. I agree that the original listing price was too high, but I've seen other similar properties go for around 4k. He is renting it furnished with an 80" TV. These kinds of prices have been common in East county over the last year. I'm a bit surprised he can't find a renter for $3,550
It was not clear to me that it was being rented furnished. I do not know how furnished affects LTR rates. If it is furnished, did they consider STR or MTR? we have local STRs that have done well, but they are not in El Cajon
as for those “comps”…. They are not comps as neither referenced is rented and the second has been listed over one month. The first has been listed at least 18 days. it has been years since one of my rentals took 18 days to rent. Comps have to have found tenants willing to pay the rent. Rentometer is fairly accurate and used 6 comps.
if the property is special, it can dictate rents far above the average rent but it has to have something making it special.
Just my $.02--I've been watching the El Cajon rental market for the last two years and have seen no decreases yet. I know there aren't many 4 bedroom units out there but part of me wonders if families or groups of people that could use the 4 bedrooms would really want to have more than 1 bathroom.
Sometimes I checked keyword for "reduced" in craiglist, these two markets seems having more growing reduced rent.
There're a lot of reduced rents.
https://sfbay.craigslist.org/s... median is $3250
https://sandiego.craigslist.or... median is $2378
Bay area median of $3250 seems rent price is almost normalized.
Quote from @Carlos Ptriawan:
Sometimes I checked keyword for "reduced" in craiglist, these two markets seems having more growing reduced rent.
There're a lot of reduced rents.
https://sfbay.craigslist.org/s... median is $3250
https://sandiego.craigslist.or... median is $2378
Bay area median of $3250 seems rent price is almost normalized.
Ok I said earlier Bay Area would drop more alongside rent/values. That was when you suggested maybe it wasn’t as bad. Which side is it? Somewhat tongue in cheek somewhat frustrated if I’m honest :).
All that said West coast should continue to normalize. I’m still waiting for measurable changes on the East Coast. And even the Texas folks seem a bit quieter than I would have thought. I figured by now they’d be seeing 5%
#1 Market Trends & Data Contributor
Quote from @Michael Wooldridge:
Quote from @Carlos Ptriawan:
Sometimes I checked keyword for "reduced" in craiglist, these two markets seems having more growing reduced rent.
There're a lot of reduced rents.
https://sfbay.craigslist.org/s... median is $3250
https://sandiego.craigslist.or... median is $2378
Bay area median of $3250 seems rent price is almost normalized.
Ok I said earlier Bay Area would drop more alongside rent/values. That was when you suggested maybe it wasn’t as bad. Which side is it? Somewhat tongue in cheek somewhat frustrated if I’m honest :).
All that said West coast should continue to normalize. I’m still waiting for measurable changes on the East Coast. And even the Texas folks seem a bit quieter than I would have thought. I figured by now they’d be seeing 5%
Logically, the rent reduction may occur after the previous spike in price. As you clearly demonstrated before, only the west region had experienced an extreme price spike in housing. So it's not really surprising if the bay area/west region is reverting to the mean.
I think the reason why the east coast and texas is quieter in rents is that the single-family price range is still within 300-600k , which still follows the normal SF nationwide home price of $420k.
Quote from @Michael Wooldridge:
Quote from @Randy Gutierrez:
Quote from @Michael Wooldridge:
Quote from @Randy Gutierrez:
Quote from @Michael Wooldridge:
@James Hamling not the best example because there was a massive Porsche shortage. But I agree 100%. And it’s not so much that people the upper class doesn’t spend disposable income it’s just that they already spend it. To your point lower class lower middle class have much less displayable. Your reasoning is the exact reason I gave the example of food stamps. There are small businesses all across the US that make a good portion of their income off of food stamps. It’s not so much a direct cash infusion to the poor but more to the businesses servicing them.
@Greg H.
Our 2 supermarkets located in NYC see about 19-25% of purchases made with SNAP benefits (EBT Food, EBT Cash, WIC). Pre-pandemic it used to be around 7-15%, a sizeable increase. In theory, if 25% of the business disappeared today we would definitely have to close up shop.
Case in point. I know a lot of businesses rely on this and in communities people wouldn’t think.
Which is why I brought this up in the beginning. The simple truth the wealthy buy what they want generally speaking already. There buying habits don’t necessarily change too much as income goes up or down. Double the income of those making $18k a year or add $10k a year to those making $50k-$60k a year - you better believe they spend it on new toys.
Truthfully not even sure why it was an argument earlier with some.
I would say one is located in a B neighborhood while the other is in a B+, so yes they are not in low-income areas per say.
Funny you mention, my wife works for one of the top 3 companies in the world and handles marketing for LVMH. She basically said what you said, the only people still buying their products today are the ones that are well off and during the times of stimulus there were crystal clear patterns indicating where and what people were spending their money on. Today those patterns have disappeared.
Not surprised by the first. I avoid politics like the plague but it’s one thing I always laugh about Republicans when they talk about reducing food stamps. It’s literally hurting small businesses more than anybody. ON the flip side dems and reducing military - sure why not lets put people on unemployment - won’t hurt anything. I’m simplifying of course the examples but in general hate when people suggest world is black and white when it’s pretty much 100% gray.
Our business benefits a lot from the program but I'm not a huge fan of it, at least in its current form. I deal with food stamp recipients all the time so I have a good grasp of who they are. A lot, and I mean a lot are entitled - 90%+ of my problems at the stores are food stamp recipients. Here are some interactions I deal with: Paying $200 worth of groceries and refusing to pay a mere .30 cents for a reusable bag (not covered by food stamps) - and then asking for delivery and not tipping the delivery driver. Trading their benefits for cash by trying to pay for another customers groceries. Asking to process non-food stamp items prohibited by law manually so food stamps can accept them. Paying for groceries and just leaving them behind for a myriad of reasons - (they don't care because it's not their money.). Not having enough in food stamps and expecting other people to cover the remaining of the purchase. Very common to see customers using more than one food stamps card indicating someone is ineligible aka fraud or there is a surplus. Purchasing groceries with EBT and reselling it to a bodega (small grocery store). My favorite one, theft which is an increasing issue here in NYC - I would say 95% if not more of the people we catch stealing are wielding an EBT card in their pockets (we know because we typically make them pay for it)
The program is so entrenched today that pulling the plug would obviously be disastrous and I do think there are people out there who genuinely do need assistance but the program today should be reformed. It should do a better job of filtering out who really needs help versus who doesn't, better job of detecting fraud and abuse, and a better job of actually lifting people out of poverty and incentivizing them to make more money.
Quote from @Carlos Ptriawan:
I got it. I still stand by sex and booze though, lol
So I checked this data, and it seems the cannabis store has increased sales 4x and liquor store is like 3x sales compare to 2019. I think you've point in this very particular subject LOL
Classical store like Kohl is losing money but cannabis store makes fortune. It's reality.
Quote from @James Hamling:
Quote from @Michael Wooldridge:
Trending around rent vs home ownership: https://www.thestreet.com/real...
Looks like buying is never bad if you plan to rent…. Slightly tongue in cheek but I don’t think too many people here are going to be hurting.
LMAO: "If you decide to rent, you may benefit from a recent decline in prices. The median asking rent in the top 50 cities dipped 0.7%, or $12"......
Holly-cow, $12 whole dollars per month, lol, what will tenants do with all that spare cash.....
I agree that it's likely rents aren't going to go down massively, but I wouldn't be surprised in a slight correction. However, $12 a month over a sustained amount of time can add up @James Hamling. Big picture.
Quote from @Randy Gutierrez:
Quote from @Michael Wooldridge:
Quote from @Randy Gutierrez:
Quote from @Michael Wooldridge:
Quote from @Randy Gutierrez:
Quote from @Michael Wooldridge:
@James Hamling not the best example because there was a massive Porsche shortage. But I agree 100%. And it’s not so much that people the upper class doesn’t spend disposable income it’s just that they already spend it. To your point lower class lower middle class have much less displayable. Your reasoning is the exact reason I gave the example of food stamps. There are small businesses all across the US that make a good portion of their income off of food stamps. It’s not so much a direct cash infusion to the poor but more to the businesses servicing them.
@Greg H.
Our 2 supermarkets located in NYC see about 19-25% of purchases made with SNAP benefits (EBT Food, EBT Cash, WIC). Pre-pandemic it used to be around 7-15%, a sizeable increase. In theory, if 25% of the business disappeared today we would definitely have to close up shop.
Case in point. I know a lot of businesses rely on this and in communities people wouldn’t think.
Which is why I brought this up in the beginning. The simple truth the wealthy buy what they want generally speaking already. There buying habits don’t necessarily change too much as income goes up or down. Double the income of those making $18k a year or add $10k a year to those making $50k-$60k a year - you better believe they spend it on new toys.
Truthfully not even sure why it was an argument earlier with some.
I would say one is located in a B neighborhood while the other is in a B+, so yes they are not in low-income areas per say.
Funny you mention, my wife works for one of the top 3 companies in the world and handles marketing for LVMH. She basically said what you said, the only people still buying their products today are the ones that are well off and during the times of stimulus there were crystal clear patterns indicating where and what people were spending their money on. Today those patterns have disappeared.
Not surprised by the first. I avoid politics like the plague but it’s one thing I always laugh about Republicans when they talk about reducing food stamps. It’s literally hurting small businesses more than anybody. ON the flip side dems and reducing military - sure why not lets put people on unemployment - won’t hurt anything. I’m simplifying of course the examples but in general hate when people suggest world is black and white when it’s pretty much 100% gray.
Our business benefits a lot from the program but I'm not a huge fan of it, at least in its current form. I deal with food stamp recipients all the time so I have a good grasp of who they are. A lot, and I mean a lot are entitled - 90%+ of my problems at the stores are food stamp recipients. Here are some interactions I deal with: Paying $200 worth of groceries and refusing to pay a mere .30 cents for a reusable bag (not covered by food stamps) - and then asking for delivery and not tipping the delivery driver. Trading their benefits for cash by trying to pay for another customers groceries. Asking to process non-food stamp items prohibited by law manually so food stamps can accept them. Paying for groceries and just leaving them behind for a myriad of reasons - (they don't care because it's not their money.). Not having enough in food stamps and expecting other people to cover the remaining of the purchase. Very common to see customers using more than one food stamps card indicating someone is ineligible aka fraud or there is a surplus. Purchasing groceries with EBT and reselling it to a bodega (small grocery store). My favorite one, theft which is an increasing issue here in NYC - I would say 95% if not more of the people we catch stealing are wielding an EBT card in their pockets (we know because we typically make them pay for it)
The program is so entrenched today that pulling the plug would obviously be disastrous and I do think there are people out there who genuinely do need assistance but the program today should be reformed. It should do a better job of filtering out who really needs help versus who doesn't, better job of detecting fraud and abuse, and a better job of actually lifting people out of poverty and incentivizing them to make more money.
I knew a guy that drove a 100k car and rich family, somehow he was eligible for food stamps. This guy lives in Minneapolis so maybe it’s local, but he would only buy the top tier steaks with them as a joke. This was 10 years ago so maybe things changed, but I doubt it.
Quote from @Dan H.:
Quote from @Greg R.:
Quote from @Dan H.:
Quote from @Greg R.:
Quote from @Michael Wooldridge:
Quote from @Carlos Ptriawan:
@Carlos Ptriawan rent data is messy as you pointed out earlier in this thread. ON an annualized basis which is what I was referencing it hasn't happened. Would love to zoom in on the dollars in that monthly swings refin one is there a link to the chart? Meanwhile annualized data from multiple sources:
OK understood, I use quarterly (short-term data) while you use long-term smoothed data, obviously, the result would be different.
I also want to point out, if 2019 data has the rent-to-income ratio as 20.1% but in 2022 it's 20.5%, the line is actually stagnant, there's no real actual rent increase although the $ seems to increase. that's just an adjustment to wage.
Yep I'm just not concerned with short term shifts because every market/investment has it. I try and look at the trend over time.
As to the bolded section stagnation has happened. I would fully agree and go so far to say I expect it this coming year. But hte funny thing about inflation/wage adjustment:
1) I've made that very argument as to one of the main reasons why rent won't drop next year. It's not that far off if you adjust for the last 12 months of wages and inflation.
2) my primary reason for calling out rents have never dropped annually is because of @John Carbone prediction that rents are going to drop and people will magically be hurting the next year for profits if they bought recently. Historically that has just not happened. Especially in such a good job market (and even 5% unemployment is good if the fed can even push it that high) and while inflation is happening.
This is a suburb of San Diego, not a lot of rental availability and rents are very high. I have rentals in the same city and every time I have a vacancy it's like a black Friday sale. Seemingly hoards people lined up around the block - a lot of them good A+ grade renters.
Rents San Diego county wide have continued going up even as RE prices have fallen. YOY in my market the rent appreciation has averaged over 10%. $4k was always high rent for that unit. Rentometer lists the average as $3450 based on six 4 BR comps. It also shows that the highest rent ever for that unit is the current rent.
This property has been owner occupied for almost 10 years, so there's no recent/ relevant rental history for this exact property. I agree that the original listing price was too high, but I've seen other similar properties go for around 4k. He is renting it furnished with an 80" TV. These kinds of prices have been common in East county over the last year. I'm a bit surprised he can't find a renter for $3,550
It was not clear to me that it was being rented furnished. I do not know how furnished affects LTR rates. If it is furnished, did they consider STR or MTR? we have local STRs that have done well, but they are not in El Cajon
as for those “comps”…. They are not comps as neither referenced is rented and the second has been listed over one month. The first has been listed at least 18 days. it has been years since one of my rentals took 18 days to rent. Comps have to have found tenants willing to pay the rent. Rentometer is fairly accurate and used 6 comps.
if the property is special, it can dictate rents far above the average rent but it has to have something making it special.
Yeah, I don't disagree. But don't you think it's crazy that they're not getting interest at $3,550? That's not far off from your estimate. Plus, there is a shortage, not a whole lot of houses out there for rent. To your point I've never waited nearly as long to rent a property in SD, which makes this a bit perplexing.
I don't think he wants to do STR. He's a more old-school kind of investor. He wants to go the traditional route. He's well aware of the success I've had w/ my STRs.
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Quote from @Dan H.:
Quote from @Greg R.:
Quote from @Dan H.:
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Quote from @Carlos Ptriawan:
@Carlos Ptriawan rent data is messy as you pointed out earlier in this thread. ON an annualized basis which is what I was referencing it hasn't happened. Would love to zoom in on the dollars in that monthly swings refin one is there a link to the chart? Meanwhile annualized data from multiple sources:
OK understood, I use quarterly (short-term data) while you use long-term smoothed data, obviously, the result would be different.
I also want to point out, if 2019 data has the rent-to-income ratio as 20.1% but in 2022 it's 20.5%, the line is actually stagnant, there's no real actual rent increase although the $ seems to increase. that's just an adjustment to wage.
Yep I'm just not concerned with short term shifts because every market/investment has it. I try and look at the trend over time.
As to the bolded section stagnation has happened. I would fully agree and go so far to say I expect it this coming year. But hte funny thing about inflation/wage adjustment:
1) I've made that very argument as to one of the main reasons why rent won't drop next year. It's not that far off if you adjust for the last 12 months of wages and inflation.
2) my primary reason for calling out rents have never dropped annually is because of @John Carbone prediction that rents are going to drop and people will magically be hurting the next year for profits if they bought recently. Historically that has just not happened. Especially in such a good job market (and even 5% unemployment is good if the fed can even push it that high) and while inflation is happening.
This is a suburb of San Diego, not a lot of rental availability and rents are very high. I have rentals in the same city and every time I have a vacancy it's like a black Friday sale. Seemingly hoards people lined up around the block - a lot of them good A+ grade renters.
Rents San Diego county wide have continued going up even as RE prices have fallen. YOY in my market the rent appreciation has averaged over 10%. $4k was always high rent for that unit. Rentometer lists the average as $3450 based on six 4 BR comps. It also shows that the highest rent ever for that unit is the current rent.
This property has been owner occupied for almost 10 years, so there's no recent/ relevant rental history for this exact property. I agree that the original listing price was too high, but I've seen other similar properties go for around 4k. He is renting it furnished with an 80" TV. These kinds of prices have been common in East county over the last year. I'm a bit surprised he can't find a renter for $3,550
It was not clear to me that it was being rented furnished. I do not know how furnished affects LTR rates. If it is furnished, did they consider STR or MTR? we have local STRs that have done well, but they are not in El Cajon
as for those “comps”…. They are not comps as neither referenced is rented and the second has been listed over one month. The first has been listed at least 18 days. it has been years since one of my rentals took 18 days to rent. Comps have to have found tenants willing to pay the rent. Rentometer is fairly accurate and used 6 comps.
if the property is special, it can dictate rents far above the average rent but it has to have something making it special.
Just getting into metrics for the year. My teams "median" listing time to lease is 14.66 days.
- James Hamling
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Quote from @Randy Gutierrez:
Quote from @Michael Wooldridge:
Quote from @Randy Gutierrez:
Quote from @Michael Wooldridge:
Quote from @Randy Gutierrez:
Quote from @Michael Wooldridge:
@James Hamling not the best example because there was a massive Porsche shortage. But I agree 100%. And it’s not so much that people the upper class doesn’t spend disposable income it’s just that they already spend it. To your point lower class lower middle class have much less displayable. Your reasoning is the exact reason I gave the example of food stamps. There are small businesses all across the US that make a good portion of their income off of food stamps. It’s not so much a direct cash infusion to the poor but more to the businesses servicing them.
@Greg H.
Our 2 supermarkets located in NYC see about 19-25% of purchases made with SNAP benefits (EBT Food, EBT Cash, WIC). Pre-pandemic it used to be around 7-15%, a sizeable increase. In theory, if 25% of the business disappeared today we would definitely have to close up shop.
Case in point. I know a lot of businesses rely on this and in communities people wouldn’t think.
Which is why I brought this up in the beginning. The simple truth the wealthy buy what they want generally speaking already. There buying habits don’t necessarily change too much as income goes up or down. Double the income of those making $18k a year or add $10k a year to those making $50k-$60k a year - you better believe they spend it on new toys.
Truthfully not even sure why it was an argument earlier with some.
I would say one is located in a B neighborhood while the other is in a B+, so yes they are not in low-income areas per say.
Funny you mention, my wife works for one of the top 3 companies in the world and handles marketing for LVMH. She basically said what you said, the only people still buying their products today are the ones that are well off and during the times of stimulus there were crystal clear patterns indicating where and what people were spending their money on. Today those patterns have disappeared.
Not surprised by the first. I avoid politics like the plague but it’s one thing I always laugh about Republicans when they talk about reducing food stamps. It’s literally hurting small businesses more than anybody. ON the flip side dems and reducing military - sure why not lets put people on unemployment - won’t hurt anything. I’m simplifying of course the examples but in general hate when people suggest world is black and white when it’s pretty much 100% gray.
Our business benefits a lot from the program but I'm not a huge fan of it, at least in its current form. I deal with food stamp recipients all the time so I have a good grasp of who they are. A lot, and I mean a lot are entitled - 90%+ of my problems at the stores are food stamp recipients. Here are some interactions I deal with: Paying $200 worth of groceries and refusing to pay a mere .30 cents for a reusable bag (not covered by food stamps) - and then asking for delivery and not tipping the delivery driver. Trading their benefits for cash by trying to pay for another customers groceries. Asking to process non-food stamp items prohibited by law manually so food stamps can accept them. Paying for groceries and just leaving them behind for a myriad of reasons - (they don't care because it's not their money.). Not having enough in food stamps and expecting other people to cover the remaining of the purchase. Very common to see customers using more than one food stamps card indicating someone is ineligible aka fraud or there is a surplus. Purchasing groceries with EBT and reselling it to a bodega (small grocery store). My favorite one, theft which is an increasing issue here in NYC - I would say 95% if not more of the people we catch stealing are wielding an EBT card in their pockets (we know because we typically make them pay for it)
The program is so entrenched today that pulling the plug would obviously be disastrous and I do think there are people out there who genuinely do need assistance but the program today should be reformed. It should do a better job of filtering out who really needs help versus who doesn't, better job of detecting fraud and abuse, and a better job of actually lifting people out of poverty and incentivizing them to make more money.
Very very simple way to address this, and it's the core issue of it all.
The current system gives entitlements in exchange for....... nothing. Absolutely 0. I call it the "Human Cat" factor. We are training generations to be Human Cats. We give them everything and expect nothing. Then we get upset when they meet our expectations, by giving nothing.
If I had the power/office, all welfare and entitlement would radically change as issuance would require an action in return. All recipients would be required to be actively working. Now here is where it get's jazzy.
There is workforce centers all across America, in every town, county all over. When persons apply for welfare benefits, or SSDisability benefits, or such similar entitlement programs, ALL would be required to complete an ASVAB test, a civilian type version. The results would direct options of placements.
A joint venture would be made with Vo-Tech's across the nation. So a recipient has a choice, they can either attend an approved Vo-Tech approved course FT, as there job, can get placed into a skills-position as their job, or an assistive placement occupation which this is mainly for disabled persons. In joint venture with municipalities persons of disabilities or best matched with positions. A person in a wheel chair can still use there hands, talk, there mind etc and guess what, it's actually hard for most of these people to find employment oddly enough and having known such disabled persons I know how much they WANT to contribute, sitting at home and rotting is mental torture.
Each center can open and staff it's own daycares via applicants who test into child care. Or have them at Vo Tech's for example, providing FREE daycare for those in the program AND providing skill training for those who tested into child care and development. Which it's across the board, incudes trainings on entrepreneurship for those who test for such, like managing and running a child care center. Starting to see the picture, EVERY job/function is a training opportunity.
Are you starting to see the picture? This is a massive labor and talent pool that can self-sustain itself AND contribute massively to countless under staffed, under engaged activities and actions, all it requires is coordination and the established requirement that to receive an entitlement one MUST contribute. That you will work, learn, something, EVERYONE will contribute.
The Vo-Tech would be a deferred student loan, that upon completion of certificate it moves into additional deferment that after 24 months of working in that occupational sector, is fully forgiven. You don't complete, bill comes due.
We NEED to change the paradigm where we are currently of making "Human Cats" too one of HELPING people to better selves, to contribute, to receive help to survive while earning ones way out of the rut there in.
And this would provide "the" workforce of skilled labor the entire world would envy. JV with private industry would come available. Think, why wouldn't an auto manufacturer JV to help develop a Vo-Tech skills program to train skilled line workers? U.S. wants to be the semi-conductor manufacturer, it starts with persons trained to do the job right?
This is how U.S. get back on the ball of "MADE IN USA".
Only downside is, not much opportunity for politicians and trans-national corps to profit off of it. It by far betters the middle and lower class, big time. So we would need a gov FOR the people.
The insane part is everything, I mean EVERYTHING in infrastructure exists today to do this. This could be launched in a matter of months, up to full operations in less then 24 months. Everything exists to do it except the political will. They rather breed Human Cats.
- James Hamling
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Quote from @James Hamling:
Quote from @James Hamling:
Quote from @Randy Gutierrez:
Quote from @Michael Wooldridge:
Quote from @Randy Gutierrez:
Quote from @Michael Wooldridge:
Quote from @Randy Gutierrez:
Quote from @Michael Wooldridge:
@James Hamling not the best example because there was a massive Porsche shortage. But I agree 100%. And it’s not so much that people the upper class doesn’t spend disposable income it’s just that they already spend it. To your point lower class lower middle class have much less displayable. Your reasoning is the exact reason I gave the example of food stamps. There are small businesses all across the US that make a good portion of their income off of food stamps. It’s not so much a direct cash infusion to the poor but more to the businesses servicing them.
@Greg H.
Our 2 supermarkets located in NYC see about 19-25% of purchases made with SNAP benefits (EBT Food, EBT Cash, WIC). Pre-pandemic it used to be around 7-15%, a sizeable increase. In theory, if 25% of the business disappeared today we would definitely have to close up shop.
Case in point. I know a lot of businesses rely on this and in communities people wouldn’t think.
Which is why I brought this up in the beginning. The simple truth the wealthy buy what they want generally speaking already. There buying habits don’t necessarily change too much as income goes up or down. Double the income of those making $18k a year or add $10k a year to those making $50k-$60k a year - you better believe they spend it on new toys.
Truthfully not even sure why it was an argument earlier with some.
I would say one is located in a B neighborhood while the other is in a B+, so yes they are not in low-income areas per say.
Funny you mention, my wife works for one of the top 3 companies in the world and handles marketing for LVMH. She basically said what you said, the only people still buying their products today are the ones that are well off and during the times of stimulus there were crystal clear patterns indicating where and what people were spending their money on. Today those patterns have disappeared.
Not surprised by the first. I avoid politics like the plague but it’s one thing I always laugh about Republicans when they talk about reducing food stamps. It’s literally hurting small businesses more than anybody. ON the flip side dems and reducing military - sure why not lets put people on unemployment - won’t hurt anything. I’m simplifying of course the examples but in general hate when people suggest world is black and white when it’s pretty much 100% gray.
Our business benefits a lot from the program but I'm not a huge fan of it, at least in its current form. I deal with food stamp recipients all the time so I have a good grasp of who they are. A lot, and I mean a lot are entitled - 90%+ of my problems at the stores are food stamp recipients. Here are some interactions I deal with: Paying $200 worth of groceries and refusing to pay a mere .30 cents for a reusable bag (not covered by food stamps) - and then asking for delivery and not tipping the delivery driver. Trading their benefits for cash by trying to pay for another customers groceries. Asking to process non-food stamp items prohibited by law manually so food stamps can accept them. Paying for groceries and just leaving them behind for a myriad of reasons - (they don't care because it's not their money.). Not having enough in food stamps and expecting other people to cover the remaining of the purchase. Very common to see customers using more than one food stamps card indicating someone is ineligible aka fraud or there is a surplus. Purchasing groceries with EBT and reselling it to a bodega (small grocery store). My favorite one, theft which is an increasing issue here in NYC - I would say 95% if not more of the people we catch stealing are wielding an EBT card in their pockets (we know because we typically make them pay for it)
The program is so entrenched today that pulling the plug would obviously be disastrous and I do think there are people out there who genuinely do need assistance but the program today should be reformed. It should do a better job of filtering out who really needs help versus who doesn't, better job of detecting fraud and abuse, and a better job of actually lifting people out of poverty and incentivizing them to make more money.
Very very simple way to address this, and it's the core issue of it all.
The current system gives entitlements in exchange for....... nothing. Absolutely 0. I call it the "Human Cat" factor. We are training generations to be Human Cats. We give them everything and expect nothing. Then we get upset when they meet our expectations, by giving nothing.
If I had the power/office, all welfare and entitlement would radically change as issuance would require an action in return. All recipients would be required to be actively working. Now here is where it get's jazzy.
There is workforce centers all across America, in every town, county all over. When persons apply for welfare benefits, or SSDisability benefits, or such similar entitlement programs, ALL would be required to complete an ASVAB test, a civilian type version. The results would direct options of placements.
A joint venture would be made with Vo-Tech's across the nation. So a recipient has a choice, they can either attend an approved Vo-Tech approved course FT, as there job, can get placed into a skills-position as their job, or an assistive placement occupation which this is mainly for disabled persons. In joint venture with municipalities persons of disabilities or best matched with positions. A person in a wheel chair can still use there hands, talk, there mind etc and guess what, it's actually hard for most of these people to find employment oddly enough and having known such disabled persons I know how much they WANT to contribute, sitting at home and rotting is mental torture.
Each center can open and staff it's own daycares via applicants who test into child care. Or have them at Vo Tech's for example, providing FREE daycare for those in the program AND providing skill training for those who tested into child care and development. Which it's across the board, incudes trainings on entrepreneurship for those who test for such, like managing and running a child care center. Starting to see the picture, EVERY job/function is a training opportunity.
Are you starting to see the picture? This is a massive labor and talent pool that can self-sustain itself AND contribute massively to countless under staffed, under engaged activities and actions, all it requires is coordination and the established requirement that to receive an entitlement one MUST contribute. That you will work, learn, something, EVERYONE will contribute.
The Vo-Tech would be a deferred student loan, that upon completion of certificate it moves into additional deferment that after 24 months of working in that occupational sector, is fully forgiven. You don't complete, bill comes due.
We NEED to change the paradigm where we are currently of making "Human Cats" too one of HELPING people to better selves, to contribute, to receive help to survive while earning ones way out of the rut there in.
And this would provide "the" workforce of skilled labor the entire world would envy. JV with private industry would come available. Think, why wouldn't an auto manufacturer JV to help develop a Vo-Tech skills program to train skilled line workers? U.S. wants to be the semi-conductor manufacturer, it starts with persons trained to do the job right?
This is how U.S. get back on the ball of "MADE IN USA".
Only downside is, not much opportunity for politicians and trans-national corps to profit off of it. It by far betters the middle and lower class, big time. So we would need a gov FOR the people.
The insane part is everything, I mean EVERYTHING in infrastructure exists today to do this. This could be launched in a matter of months, up to full operations in less then 24 months. Everything exists to do it except the political will. They rather breed Human Cats.
This will only happen when it is forced on us. The only way I see this happening is if the USD is no longer the world reserve currency. If/when that is lost (may not be in our lifetime who knows), then what you describe will happen by FORCE. Fortunately this country has the resources to pull it off, but it will be a culture shock and could take 10-20 years to get everyone on board. The biggest threat is selling land to foreign interests, they can have our treasuries but selling land and resources to foreign entities/gov should be banned or heavily restricted to plan for the day we lose the reserve currency
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