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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 @James Hamling:
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 getting into metrics for the year. My teams "median" listing time to lease is 14.66 days.
Since the covid showing restrictions were lifted, we have found a tenant on the first day of showing every time in San Diego. San Diego has a large rental shortage with associated low vacancy rate. However, we do not pull the listing until the tenant has placed a deposit to hold the unit. With our tenant check process, occasionally having to process more than one application due to tenant not meeting our criteria, and arranging to get the deposit, the listings usually are up over a week and sometime approach 2 weeks.
>18 days is long time in our market. Over 30 days is almost unheard of in residential (<5 units) rentals.
We have no units in El Cajon but we have quite a few units in escondido which would seem to be similar. Our only 4 BR is in bad need of rehab so the rent on our unit would not be a good comp (it is far less than $3500).
Quote from @Carlos Ptriawan:
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.
Just wanted to point out that there are 2-3 per day that are labeled as "reduced" but we don't actually know if they're really being reduced, and if one looks at the pictures we see that a lot of them are just complexes repeatedly advertising. Also, that Rolando one is a scam (it's Craigslist after all)--it's actually for rent for $2990:
Quote from @John Carbone:
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.
I've seen one guy drive off in a 85k bmw once, I was floored to say the least. A few times I have seen people drive off in the 30k-45k range of vehicles.
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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
Haha, I am about to say that John. Precisely the same.
So James, Michael,etc..... are you really ready if American has to work like people in Thailand, Brazil , Romania or Laos to sustain a daily living ?
Seriously ? Once it happened there's no reset button
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Quote from @Randy Gutierrez:
Quote from @John Carbone:
Quote from @Randy Gutierrez:
Quote from @Michael Wooldridge:
Quote from @Randy Gutierrez:
Quote from @Michael Wooldridge:
Quote from @Randy Gutierrez:
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.
I've seen one guy drive off in a 85k bmw once, I was floored to say the least. A few times I have seen people drive off in the 30k-45k range of vehicles.
Oh like this, yes, just check the car of Section 8 tenants :-) and they're paying late rent.
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Quote from @Dan H.:
Quote from @James Hamling:
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 getting into metrics for the year. My teams "median" listing time to lease is 14.66 days.
Since the covid showing restrictions were lifted, we have found a tenant on the first day of showing every time in San Diego. San Diego has a large rental shortage with associated low vacancy rate. However, we do not pull the listing until the tenant has placed a deposit to hold the unit. With our tenant check process, occasionally having to process more than one application due to tenant not meeting our criteria, and arranging to get the deposit, the listings usually are up over a week and sometime approach 2 weeks.
>18 days is long time in our market. Over 30 days is almost unheard of in residential (<5 units) rentals.
We have no units in El Cajon but we have quite a few units in escondido which would seem to be similar. Our only 4 BR is in bad need of rehab so the rent on our unit would not be a good comp (it is far less than $3500).
Very similar process and market in T.C..
Listing stays active until an accepted applicant posts funds to secure unit and take off market. 30+ days list time is bonkers, totally unheard of unless it's a ridiculous ask, which some have gotten into that zone of ridiculous greed, pressing for $3k mnth rents on a place that was $1,500 just 24-36 months ago. Or just leaving a place looking like hell with marked up stained walls, nasty carpets, a general film of funk all over, saying idiotic things like "well, it's a tight market, someone will take it as-is".
I don't allow those games to happen, I will fire a client. But other teams, I see them allowing all kinds of stupidity, and i don't know why, nobody wins in that case, it's a clear path to bad results.
A few months ago my team hit an all-time record of average list time being 72hrs, that includes time for deposit received. It was insane. I had prospective tenants calling breaking down into tears begging to be allowed to apply on a unit that had approved pending move-ins. Never seen anything like it, insanely tight market for unit supply.
This summer season is going to be even worse I think. People have to remember how many leases are multi year, so we didn't see the end of it this past season, which was record setting. With inventory even more tight, it's going to be another record setter.
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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
And now as European energy demands are under heavy pressure, the Fed increases the rate to discipline the Europe and rest of the world to say to the world "Who is the boss". The rate increases definitely cause a devaluation of other countries, thus making other country dependence on the Dollar stronger--at least on a short-term basis.
I also thought before that the world would be just using US Dollar and we may not see this trend be replaced in 50 years ahead, but the Russian occupation followed by OPEC decision, etc, makes the possibility of that happening accelerating.
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Quote from @Carlos Ptriawan:
And now as European energy demands are under heavy pressure, the Fed increases the rate to discipline the Europe and rest of the world to say to the world "Who is the boss". The rate increases definitely cause a devaluation of other countries, thus making other country dependence on the Dollar stronger--at least on a short-term basis.
I also thought before that the world would be just using US Dollar and we may not see this trend be replaced in 50 years ahead, but the Russian occupation followed by OPEC decision, etc, makes the possibility of that happening accelerating.
If this is true, why don't we just say "who's the boss" by producing our own energy again as we did just a few short years ago? Become energy independent and start selling our surplus to Europe? This would destroy Russia in a matter of months. Yet we don't do it.....why? Almost like some people on our team are playing for the Russians.....
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Quote from @Bruce Woodruff:
Quote from @Carlos Ptriawan:
And now as European energy demands are under heavy pressure, the Fed increases the rate to discipline the Europe and rest of the world to say to the world "Who is the boss". The rate increases definitely cause a devaluation of other countries, thus making other country dependence on the Dollar stronger--at least on a short-term basis.
I also thought before that the world would be just using US Dollar and we may not see this trend be replaced in 50 years ahead, but the Russian occupation followed by OPEC decision, etc, makes the possibility of that happening accelerating.
If this is true, why don't we just say "who's the boss" by producing our own energy again as we did just a few short years ago? Become energy independent and start selling our surplus to Europe? This would destroy Russia in a matter of months. Yet we don't do it.....why? Almost like some people on our team are playing for the Russians.....
100% agree with you. The right step would be more fracking, and more drilling.
There's another 'economic war' that happened last week, it's the direct consequences of Chip's act. Starting yesterday October 14 any US guy working in China there for fab and semiconductor industry has to leave the country, if not risking losing citizenship. The China tech industry could collapse shortly by forcing US folks to resign.
Man this is like history in the making in just matter of weeks.
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Quote from @Greg R.:
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.
I think it is area dependent. Perhaps if people take huge losses on their stock market portfolio they would consider selling for less to regain back their losses. I think there will be an adjustment but the majority of the market is sitting in strong equity positions if they have held for longer than 2 years. The majority of sellers I've spoken with are not worried about selling but rather watching the market to buy more if the dip is big enough.
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There are some sellers that I have been offering on that are in 100% DENIAL of the current housing market decline. It's quite frustrating, what can I do? It's still low inventory out there.
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Quote from @Rob Chiang:
There are some sellers that I have been offering on that are in 100% DENIAL of the current housing market decline. It's quite frustrating, what can I do? It's still low inventory out there.
You can only wait until reality catches up to them.....
Quote from @Rob Chiang:
There are some sellers that I have been offering on that are in 100% DENIAL of the current housing market decline. It's quite frustrating, what can I do? It's still low inventory out there.
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Markets where prices could fall 20% or more:
Not real sure what the fix is. But even aside from the people it’s helping - there are many small businesses across america that would likewise be impacted. Not a great situation unfortunately.
Quote from @Carlos Ptriawan:
Quote from @John Carbone:
Quote from @James Hamling:
Quote from @Randy Gutierrez:
Quote from @Michael Wooldridge:
Quote from @Randy Gutierrez:
Quote from @Michael Wooldridge:
Quote from @Randy Gutierrez:
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
Haha, I am about to say that John. Precisely the same.
So James, Michael,etc..... are you really ready if American has to work like people in Thailand, Brazil , Romania or Laos to sustain a daily living ?
Seriously ? Once it happened there's no reset button
@Carlos Ptriawan am I ready? Sure because we are so many massive shifts away from it ever happening. The only economy that is even in the ballpark of where it “might” become feasible is China. After that you drop down to Japan a 5 trillion GDP and then Germany a 3.8 trillion GDP. You know what is number 5? California. Number 9? Texas. even yanking out 2 of our biggest states, with economies bigger than most of Europes countries, we still would be ahead of the number 2 economy in terms of GDP.
I’m not saying it can’t happen (and I often see this come up in politics forums) but the simple reality is people who predict it happening near term (@John Carbone i know you weren’t saying it was imminent) usually fail to consider just how big of an economic powerhouse we are and the large wealth gap between us and everybody else (even China is 75% but we’ll call them equal) after China it’s not close.
Anyway I don’t see it happening in my lifetime but what I do know is even if it does in my lifetime there will need to be FAR more shifts before it becomes feasible.
So am I ready? Sure as much as anybody can be.
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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 getting into metrics for the year. My teams "median" listing time to lease is 14.66 days.
Since the covid showing restrictions were lifted, we have found a tenant on the first day of showing every time in San Diego. San Diego has a large rental shortage with associated low vacancy rate. However, we do not pull the listing until the tenant has placed a deposit to hold the unit. With our tenant check process, occasionally having to process more than one application due to tenant not meeting our criteria, and arranging to get the deposit, the listings usually are up over a week and sometime approach 2 weeks.
>18 days is long time in our market. Over 30 days is almost unheard of in residential (<5 units) rentals.
We have no units in El Cajon but we have quite a few units in escondido which would seem to be similar. Our only 4 BR is in bad need of rehab so the rent on our unit would not be a good comp (it is far less than $3500).
Very similar process and market in T.C..
Listing stays active until an accepted applicant posts funds to secure unit and take off market. 30+ days list time is bonkers, totally unheard of unless it's a ridiculous ask, which some have gotten into that zone of ridiculous greed, pressing for $3k mnth rents on a place that was $1,500 just 24-36 months ago. Or just leaving a place looking like hell with marked up stained walls, nasty carpets, a general film of funk all over, saying idiotic things like "well, it's a tight market, someone will take it as-is".
I don't allow those games to happen, I will fire a client. But other teams, I see them allowing all kinds of stupidity, and i don't know why, nobody wins in that case, it's a clear path to bad results.
A few months ago my team hit an all-time record of average list time being 72hrs, that includes time for deposit received. It was insane. I had prospective tenants calling breaking down into tears begging to be allowed to apply on a unit that had approved pending move-ins. Never seen anything like it, insanely tight market for unit supply.
This summer season is going to be even worse I think. People have to remember how many leases are multi year, so we didn't see the end of it this past season, which was record setting. With inventory even more tight, it's going to be another record setter.
@Dan H. @James Hamling interesting article on rents and realpage in big cities: https://www.propublica.org/art...
Quote from @Bruce Woodruff:
Markets where prices could fall 20% or more:
It’s an old article put out in August when people were panicking. Honestly I’d love to know what data sets they used to build it because it looks like they just flagged 90% of the most active counties in america.
So the Philadelphia region market they have the suburbs flagged for 20% reduction. Those markets saw 10% from 2007 peaks to 2009 bottom. So it’s rather unlikely.
On top of that the median sale price rigth now is $447k, up 26% since pandemic but adjusted for inflation 15% over those years a lot but not a massive risk. Meanwhile counties in NJ not far it calls for no decrease despite those homes having a higher median $650k and up 30% since the pandemic.
Anyway time will tell but just off markets I know well - I don’t see it and it’s calling for double what we saw in 08…..
Funny this just popped up: https://fortune.com/2022/10/15...
Shows May - august home value trends.
@Paul De Luca they might get it right in 2023 but you know what they say about broken clocks (correct twice a day!)
#1 Market Trends & Data Contributor
@Carlos Ptriawan am I ready? Sure because we are so many massive shifts away from it ever happening. The only economy that is even in the ballpark of where it “might” become feasible is China. After that you drop down to Japan a 5 trillion GDP and then Germany a 3.8 trillion GDP. You know what is number 5? California. Number 9? Texas. even yanking out 2 of our biggest states, with economies bigger than most of Europes countries, we still would be ahead of the number 2 economy in terms of GDP.
It's not about GDP my friend, it's about balance of trade, the last time USA has a positive balance of trade is like in 1970s something.
This means American has to start working harder to produce something like everyone else in the planet. No more section 8 , no more Food stamps, no more Freddie Mac guaranteeing 30 years fixed rate . It will impact everyone, not just the working class.
With the country having negative BOT like today there're already so many comments oh I hate my job I would to retire in 40 :-) when Dollar is cut by half , folks have to work 3x harder,spend more time in the office, and produce something.
#1 Market Trends & Data Contributor
Quote from @Michael Wooldridge:
Quote from @Bruce Woodruff:
Markets where prices could fall 20% or more:
It’s an old article put out in August when people were panicking. Honestly I’d love to know what data sets they used to build it because it looks like they just flagged 90% of the most active counties in america.
Yea it turned out even Moody guy is not that smart, the smart guy in the room is this Blacknight mortgage that shows it's all about the relative's liquidity and relative's mortgage/income ratio.
There's not much price adjustment in the east part of the US.
Home prices may be going lower again in Feb 2023-July 2023 due to seasonality but inflation data from JPM analytics showing core CPI would be heading down by Q1 2023.
Quote from @Carlos Ptriawan:
@Carlos Ptriawan am I ready? Sure because we are so many massive shifts away from it ever happening. The only economy that is even in the ballpark of where it “might” become feasible is China. After that you drop down to Japan a 5 trillion GDP and then Germany a 3.8 trillion GDP. You know what is number 5? California. Number 9? Texas. even yanking out 2 of our biggest states, with economies bigger than most of Europes countries, we still would be ahead of the number 2 economy in terms of GDP.
It's not about GDP my friend, it's about balance of trade, the last time USA has a positive balance of trade is like in 1970s something.
This means American has to start working harder to produce something like everyone else in the planet. No more section 8 , no more Food stamps, no more Freddie Mac guaranteeing 30 years fixed rate . It will impact everyone, not just the working class.
With the country having negative BOT like today there're already so many comments oh I hate my job I would to retire in 40 :-) when Dollar is cut by half , folks have to work 3x harder,spend more time in the office, and produce something.
That’s a far more complex discussion. We always run at a services surplus on deficit and it’s in goods where the the deficit runs. Given that we are the global currency there are some very specific benefits to us running this way and some risks.
The reality is it’s not a great economic indicator on its own. BTW the deficit has been closing recently :https://www.marketwatch.com/st... GDP will rise now. Would you say our economy is healthier now vs a year ago?
It’s one dimensional indicator. Also the trade metrics used have a big problem accounting for the digital economy - which is a big part of our country these days as you know. https://www.nytimes.com/2015/0...
So no not worries about any other country supplanting us right now.