patrick.net

robertoaribas says

RentingForHalfTheCost says

I have rented for 15 years here and each month I beat the pants out of owners in the long run.

If you had bought 15 years ago, the price difference from then to today makes your assertion that renting has worked out better completely ridiculous.

Ridiculous is all the statements that pack of SFBA owners make here each and every day. Renting is the way to go in SFBA, always has been. Owners are the ones sitting in the back concert seats because their tax bill has drained them. ;)

New Renter says

http://quake.abag.ca.gov/liquefaction/Bigsby says

RentingForHalfTheCost says

Lies! Rents are definitely dropping in the bay area. Anyone saying different is most likely an owner in denial.

And that claim is based on what?

I would also like to see some data as my lease is up for renewal next month.

Dude, just go to a few of the rental sites and see the inventory growing daily. There are a ton of investors hurting for decent renters. Now, if your credits is sucky and you have no referrals, then that is a different issue. However, if you are a known good renter, then the world is at your beckoning in the SFBA. Your printing your own money so to say. Owners can only sit and watch as you get richer faster than them. ;)

http://mapliv.com/

Go to any SFBA city and see the map get swarmed with cheap rentals. Good luck.

robertoaribas says

RentingForHalfTheCost says

I have rented for 15 years here and each month I beat the pants out of owners in the long run.

If you had bought 15 years ago, the price difference from then to today makes your assertion that renting has worked out better completely ridiculous.

I did buy. I have bought over 10 houses over that 15 year period. Still own 4 and am planning to sell them in the spring of this year. The beauty of living in a high income area and paying next to nothing for housing, is you can buy outside the area without having to sell your first born.

Renting in the SFBA rules! Buying is a gamble at the least. Good luck if you pick that path. I wouldn't

RentingForHalfTheCost says

robertoaribas says

RentingForHalfTheCost says

I have rented for 15 years here and each month I beat the pants out of owners in the long run.

If you had bought 15 years ago, the price difference from then to today makes your assertion that renting has worked out better completely ridiculous.

Ridiculous is all the statements that pack of SFBA owners make here each and every day. Renting is the way to go in SFBA, always has been. Owners are the ones sitting in the back concert seats because their tax bill has drained them. ;)

Your current 800k Pleasanton properties were 300-350k 15 years ago. That tax bill wouldn't drain too many.

RentingForHalfTheCost says

I did buy. I have bought over 10 houses over that 15 year period. Still own 4 and am planning to sell them in the spring of this year. The beauty of living in a high income area and paying next to nothing for housing, is you can buy outside the area without having to sell your first born.

Renting in the SFBA rules! Buying is a gamble at the least. Good luck if you pick that path. I wouldn't

What do you pay in rent?

Bigsby says

RentingForHalfTheCost says

Lies! Rents are definitely dropping in the bay area. Anyone saying different is most likely an owner in denial.

And that claim is based on what?

Huh? You made the claim. State your cartoon data. Please don't quote anything NAR related. I just ate my breakfast.

RentingForHalfTheCost says

Huh? You made the claim. State your cartoon data. Please don't quote anything NAR related. I just ate my breakfast.

I'm simply going on the comments people post up on here. I don't live there and you're the only person who claims discount prices in the BA. Why don't you post up your data as you claimed rents were falling?

And a quick google throws up plenty of results highlighting large rent increases...

robertoaribas says

Virtually any home you could have bought 15 years ago will have double or more value today.

"Value"
For the house buyer that actually lives in their house, that increase in "value" does not mean squat in the real world. If they really like where they are and want to die there (and plenty of people exist like this), the only way to capture that value is to sell, move and downsize. From a fixed living cost standpoint, I agree that after 15 years most people would have paid more in rent, unless they got super lucky and their landlord kept rents at 1998 levels, or they are either single or manage to cram a whole family into 1-2BR apartments.

Not everyone is a RE "investor" that plans to milk the HELOC cash cow and use it to buy even more leveraged property so that they can try to geometrically increase their landlording empire.

Bigsby says

RentingForHalfTheCost says

Huh? You made the claim. State your cartoon data. Please don't quote anything NAR related. I just ate my breakfast.

I'm simply going on the comments people post up on here. I don't live there and you're the only person who claims discount prices in the BA. Why don't you post up your data as you claimed rents were falling?

And a quick google throws up plenty of results highlighting large rent increases...

You were the first to make a claim. You said rents are increasing! Why don't you take your own "throw it out there" advice and back that up? Silly talk you have.

RentingForHalfTheCost says

You were the first to make a claim. You said rents are increasing! Why don't you take your own "throw it out there" advice and back that up? Silly talk you have.

You're bluffing. Any related google search throws up a multitude of articles stating there have been substantial rises in rents, so what's your evidence to counter that?

robertoaribas says

Renting may very well be the best choice today. However, claiming renting continuously over the past 15 years was better exemplifies very poor math skills. Virtually any home you could have bought 15 years ago will have double or more value today. You could have refied the interest rate down to 3.5%... and taxes would have been fixed from your purchase price.

Could have also refi'd and sucked out equity to buy a new car, new boat, spend above your means. Many did. Many still do.

Believe me, I have benefited much better renting that owning. Even if I bought 15 years ago. Remember, I own and the growth because I bought in more reasonable areas at the time has been better than here. Double? Try triple. SFBA real estate is just a pig farm.

John Bailo says

Based on the stagnation (and possible large downsides) in the stock market, I don't see how any real estate prices can "surge". Where is the money coming from? In the past, a lot of it came not only from skakey loans, but also from giant nest eggs built up with dual income 401k accounts. Where is that today? I'm not seeing it.

It is in NAR cooking the books again as always. They are still thinking it is 2003, or hoping it is. Talk to owners trying to sell and you get the real story. Normally, it has a few sketching realtor notes in there as well. ;)

Bigsby says

RentingForHalfTheCost says

You were the first to make a claim. You said rents are increasing! Why don't you take your own "throw it out there" advice and back that up? Silly talk you have.

You're bluffing. Any related google search throws up a multitude of articles stating there have been substantial rises in rents, so what's your evidence to counter that?

Still no evidence from you. Nice.

RentingForHalfTheCost says

Could have also refi'd and sucked out equity to buy a new car, new boat, spend above your means. Many did. Many still do.

Believe me, I have benefited much better renting that owning. Even if I bought 15 years ago. Remember, I own and the growth because I bought in more reasonable areas at the time has been better than here. Double? Try triple. SFBA real estate is just a pig farm.

Where did you buy, and what do you pay in rent?

RentingForHalfTheCost says

Still no evidence from you. Nice.

Are you saying I'm lying? Type in 'bay area rent increases' and tell me what comes up in your browser. Like I said, you are bluffing to cover yourself.

Bigsby says

RentingForHalfTheCost says

Still no evidence from you. Nice.

Are you saying I'm lying? Type in 'bay area rent increases' and tell me what comes up in your browser. Like I said, you are bluffing to cover yourself.

I said that from the beginning. Didn't you see the "Lies!" at the beginning of my reply? Weird.

New rentals in Mountain View/Sunnyvale area just in the last 3 days under $3000/mth. Over 100! Just wait for spring! This whole place will be for rent. Owners are now investors. This is going to be funny to watch crumble.

RentingForHalfTheCost says

Bigsby says

RentingForHalfTheCost says

Still no evidence from you. Nice.

Are you saying I'm lying? Type in 'bay area rent increases' and tell me what comes up in your browser. Like I said, you are bluffing to cover yourself.

I said that from the beginning. Didn't you see the "Lies!" at the beginning of my reply? Weird.

Then demonstrate I'm lying. What was the percentage decline in rents for the bay area for the last year?

RentingForHalfTheCost says

Dude, just go to a few of the rental sites and see the inventory growing daily. There are a ton of investors hurting for decent renters. Now, if your credits is sucky and you have no referrals, then that is a different issue. However, if you are a known good renter, then the world is at your beckoning in the SFBA. Your printing your own money so to say. Owners can only sit and watch as you get richer faster than them. ;)

http://mapliv.com/

Go to any SFBA city and see the map get swarmed with cheap rentals. Good luck.

Thanks for the link. I took a look at the local inventory. Based on what I see there and from Craigslist inventory is low, especially for pet friendly rentals. Rents for anything do not seem to have decreased since this time last year. There is too much variability for me to say based on what I have seen so far whether there has been a significant increase but your clear cut assertion that inventory is up and rents are down does not hold true in my part of the SFBA.

Don't get me wrong RFHTC, I WANT your assertions to be true. I'm just not seeing it in the data here yet.

Bigsby says

RentingForHalfTheCost says

I did buy. I have bought over 10 houses over that 15 year period. Still own 4 and am planning to sell them in the spring of this year. The beauty of living in a high income area and paying next to nothing for housing, is you can buy outside the area without having to sell your first born.

Renting in the SFBA rules! Buying is a gamble at the least. Good luck if you pick that path. I wouldn't

What do you pay in rent?

Less than the after-tax dividends I make currently from stock I accumulated by not buying in the SFBA.

The current house I rent the landlord wants me to buy for 1.1-1.2m range. I rent for $3050 and that includes gardener and pool maintenance. You do the math.

RentingForHalfTheCost says

Less than the after-tax dividends I make currently from stock I accumulated by not buying in the SFBA.

The current house I rent the landlord wants me to buy for 1.1-1.2m range. I rent for $3050 and that includes gardener and pool maintenance. You do the math.

My math tells me you'd have been better off buying 15 years ago just as I would have been. Still waiting on your data for the year-on-year rent declines.

New Renter says

Based on what I see there and from Craigslist inventory is low, especially for pet friendly rentals.

Lose the pets. Sorry. That will make you overpay more than anything out there. If you really need pets then owning is most likely in your future. Probably more than kids. As a landlord I used to let people have pets, but after replacing hardwood floors, moldings, etc. never again. The idea of clean for some pet owners is just too different. You might be one of the good ones, but you will pay the premium because of a few bad ones. Kinda like insurance.

RentingForHalfTheCost says

New Renter says

Based on what I see there and from Craigslist inventory is low, especially for pet friendly rentals.

Lose the pets. Sorry. That will make you overpay more than anything out there. If you really need pets then owning is most likely in your future. Probably more than kids. As a landlord I used to let people have pets, but after replacing hardwood floors, moldings, etc. never again. The idea of clean for some pet owners is just too different. You might be one of the good ones, but you will pay the premium because of a few bad ones. Kinda like insurance.

So your solution to affordable rent is to majorly curb your quality of life ("lose the pets")? Pets reduce depression and dogs get your butt out of the house to exercise daily (if you are a responsible and loving human).

It is much more difficult to get a great place to rent with a pet, but it is doable with some research and a pet resume with references.

Bigsby says

RentingForHalfTheCost says

Less than the after-tax dividends I make currently from stock I accumulated by not buying in the SFBA.

The current house I rent the landlord wants me to buy for 1.1-1.2m range. I rent for $3050 and that includes gardener and pool maintenance. You do the math.

My math tells me you'd have been better off buying 15 years ago just as I would have been. Still waiting on your data for the year-on-year rent declines.

Guess you just got by in math class then. You made the claim that rents are rising and I called BS on it. Back that up smarty pants and then I'll give you some of my time. Otherwise, keep waiting for my effort to show you how wrong you are about your claim.

RentingForHalfTheCost says

Guess you just got by in math class then. You made the claim that rents are rising and I called BS on it. Back that up smarty pants and then I'll give you some of my time. Otherwise, keep waiting for my effort to show you how wrong you are about your claim.

Still bluffing I see. As I said, do a google search for the yearly rental changes in the bay area and come back and tell me they declined. You won't because they didn't.

Bigsby says

RentingForHalfTheCost says

Guess you just got by in math class then. You made the claim that rents are rising and I called BS on it. Back that up smarty pants and then I'll give you some of my time. Otherwise, keep waiting for my effort to show you how wrong you are about your claim.

Still bluffing I see. As I said, do a google search for the yearly rental changes in the bay area and come back and tell me they declined. You won't because they didn't.

Data=Nada

RentingForHalfTheCost says

Bigsby says

RentingForHalfTheCost says

Guess you just got by in math class then. You made the claim that rents are rising and I called BS on it. Back that up smarty pants and then I'll give you some of my time. Otherwise, keep waiting for my effort to show you how wrong you are about your claim.

Still bluffing I see. As I said, do a google search for the yearly rental changes in the bay area and come back and tell me they declined. You won't because they didn't.

Data=Nada

Yeah, and your evidence is what exactly? Prices fluctuate all the time, but it is a fact that rents are higher now than they were a year ago. They may well have flattened in the previous quarter after a long run up but I've been reading your posts for a while now and you've been stating rents have been declining for a good long time. That has simply not been the case. You really are one for demanding data from others (when a simple google search would suffice), but are hardly forthcoming when asked to back up your own claims.

FBigsby says

Prices fluctuate all the time, but it is a fact that rents are higher now than they were a year ago. They may well have flattened in the previous quarter after a long run up

As a renter in San Jose I agree that rents have gone up year over year. However, I pay a lot less in rent now, live in a much nicer place, in a better part of town, closer to my work. Why? Because I shopped around and didn't just accept a rent increase (most people in the Bay Area will just pay the extra $200 a month)

It does seem that rents are now going back down in the area. My buddy had 2 years of rent increases: it went from $1800 to $2000 to $2200. He just renewed his lease last month and reduced his rent to $2000. As well there are a lot of new rentals coming on the market from these investors that are now landlords.

Bigsby says

but I've been reading your posts for a while now and you've been stating rents
have been declining for a good long time. That has simply not been the case. You
really are one for demanding data from others (when a simple google search would
suffice), but are hardly forthcoming when asked to back up your own claims.

I actually did a google search as you said, and here is a small sample of what I found:

rents +22% YOY
http://sf.curbed.com/archives/2013/01/31/whalesized_rents_finally_done_jumping_to_the_sky.php

rents up anywhere from +1 to +100% in various locations on the peninsula
http://sf.curbed.com/archives/2012/05/14/the_bad_news_as_suspected_rental_rates_have_increased_dramatically_over_the_past_year.php

rents +22 to +28 in various locations in SFBA
http://www.sfgate.com/realestate/article/S-F-apartment-market-is-hot-4237719.php#ixzz2Ja9Tqu6P

SFBA & SV post "double digit gains" for two consecutive years
http://www.costar.com/News/Article/Apartment-Rent-Growth-Expected-To-Decelerate-In-Top-Markets-Ahead-of-New-Supply-Wave/145859?ref=/News/Article/Apartment-Rent-Growth-Expected-To-Decelerate-In-Top-Markets-Ahead-of-New-Supply-Wave/145859&src=rss

Assuming RFHTC would claim "bias" I looked at some other bearish blogs - sure enough they too claim rent increases.

So RFHTC, on this specific point, do you have anything further to say? Are all of these sources, (some of whom freely were pointing out rent declines in 08-09) all in the pocket of the NAR? What too of the bear blogs, and the other posters here - are they all incorrect, biased, and you (and your general lack of data) correct? Is that what you want to have us believe?

Now sure, you can pick apart the sample size of this, or the methodology of that. However, all of them point to a very consistent notion - rents are rising.

That said, note too how several of these items I noted state rents are decreasing in the rate of growth, have "plateaued" or perhaps could even decrease. As such, seems to me these would support your bearish notions and you should celebrate them.

Still, just understand the very narrow point at issue here. Your claim was not that rents are "flat" or "could go down" or "will go down soon". No. Your claim was that rents are CURRENTLY going down now. So the question now is, do you have any data that the rest of us can review to judge the veracity of your claim?

RentingForHalfTheCost says

Just wait for spring! This whole place will be for rent. Owners are now investors. This is going to be funny to watch crumble.

I am not sure where in the SFBA you have been renting, but you are lucky to have avoided the rent increases of the last 18 months. THey are very real and hit my wife and me in a very real way in this time in Mountain View.

Now, I do think that you are getting at something in the quoted part of your post. The amount of inventory coming online in the south bay is enormous. New complexes are being built, and the "investors" are loading the market up with rentals. The needle is going to go full-tilt the other way because of the momentum that "cash flow investing" has picked up, and it is still going. People like E-Man & SFace that got in a while ago should be fine, but today's "investors" are going to find their returns to be dwindling I think. This is nothing new of course, since markets tend to over-correct and overreact. I guess we'll see what happens.

There was no date range stated by Bigsby's claim of rent increases. It was a blanket statement. My rebuttals is about the last quarter. Rents are under pressure right now!!! Shop around, look around, talk to landlords in this area. Investors are not coming close to recovering costs! Say what you want and quote all the articles you want, these next few months will be wild in the SFBA!!

SFace says

"For example, Q1 2013 renewals went out between 7% and 9% in both regions, pretty consistent with the north of 8% renewal increases we achieved during Q4 2012."

http://seekingalpha.com/article/1148561-avalonbay-communities-management-discusses-q4-2012-results-earnings-call-transcript?page=5

You have to hate money to rent at Avalon IMHO. It is only for the rich foreigners who just forward on the expense to the family slush fund. No one living without a trust fund should rent at these crooked establishments. For the cost of a 1 bedroom I can rent a full 3/2 with garden/pool in the same neighborhood. It amazes me the amount people pay to have neighbors coughing 6 inches away from them. Amazing.

donjumpsuit says

So who is losing out? If I bought gold in 1998 instead of that bay area house, I would be $50 richer, wouldn't have paid taxes, and wouldn't have paid a bank to borrow money and be the ruler of all.

My scenario is similar. However, instead of paying $3k/mth 15 years ago to be an owner I rented for $800/mth and bought two places out of the area and invested in gold. 15 years ago at a salary of 60K and not much savings I would have been looking at a 300-400K house. So that would be worth about 1.2m or so today if I did the upkeep properly and dumped about 200k in improvements into the place. I can say that I am close to 2x that value today because I didn't buy. Sure, my salary increased, but most of my smart moves were done when my salary was less that 100k. To each his own.

SFace says

For 2013 in the Bay Area, we expect revenue growth of 5.5% to 6.75%"

I bet they don't get it. Expect all you want. It just doesn't make any sense.

robertoaribas says

I notice you left 15 years of rent payments out of your gold/home comparison...

Rent in SFBA doesn't even cover the taxes and maintenance many times. Owners are running a loss and will be for a while. The only way they can break even is if they bought pre 1997 or they charge $5k for a 2bd/1ba 1000 sqft house. Ain't gonna happen.

Patient: I can't find anything in Santa Clara/Sunnyvale/Mtn View for less than 2500/Mth.

Doctor: I'm a family practice doctor, you need to see an optometrist.

RentingForHalfTheCost says

I rented for $800/mth and bought two places out of the area and invested in
gold. 15 years ago at a salary of 60K and not much savings I would have been
looking at a 300-400K house.

So its true then - even 15 years ago, Patrick's "wait" for rental parity was false in the SFBA. Good to know.

CDon says

RentingForHalfTheCost says

I rented for $800/mth and bought two places out of the area and invested in

gold. 15 years ago at a salary of 60K and not much savings I would have been

looking at a 300-400K house.

So its true then - even 15 years ago, Patrick's "wait" for rental parity was false in the SFBA. Good to know.

You'll never see it in the SFBA. Too many people willing to go into debt thinking it is a great road to wealth.

robertoaribas says

It is very hard to argue a $600K home purchase then would have been a bad investment...

Also, your argument: " I rented in the Bay Area, and purchased elsewhere" is a false choice. You could have bought in the bay area and purchased elsewhere as well.

I couldn't afford a 600k house 15 years ago. A 300K house would have made me cash poor for years. That alone would have meant that I couldn't buy elsewhere. I guess the math is too difficult for the professor. ;)

RentingForHalfTheCost says

15 years ago at a salary of 60K and not much savings I would have been looking at a 300-400K house.

Was that your position 15 years ago? You are now paying $3050 a month, presumably for a fairly similar house to one that could have been purchased for around 400k back in 97. If buying hasn't been appealing to you before, it certainly isn't going to be moving forward. A lifetime of renting vs you having dumped your money into a 300-400k house back in 97 still doesn't look a particularly great decision to me. You could have easily paid that off by now, so all your current $3050 cheques and all those future payments could have been redirected to your chosen investments (not to mention all the other money in those intervening years you would have saved between your 97 refied mortgage and increasing rental prices).
Now, you did well to buy your two houses and invest in gold back in 97, but that is not exactly a typical scenario for someone on 60k. And if you'd bought say a 300k house, why would that have stopped you making investments going forward as your salary improved? You seem to argue that if you'd tied yourself to that kind of purchase all else would have gone out of the window.
And all this talk about this or that investment back in '97 is kind of missing the point. Investing in a house was a far more typical scenario for most people than dumping money into gold or if you were very lucky, knocking on Larry Page's garage door with 300k in your hand.
And yes, my point about rent increases was vague, but I was referring to what people have been talking about on here for quite some time and the newspaper reports I've read from time to time. You have been arguing the opposite for quite a bit longer than the last few months.