patrick.net

axmcmillan:

There are rentals on there that are not on CL.

Further, Bay Rentals does the paperwork, ie the credit reports for you.
That way, some random person on CL is not getting your SS# and other personal info.
Helps to avoid the scammers and people intent on letting their rental go to foreclosure while making off with your security deposit.

A number of good landlords are scared at what has become of the rental market with the influx of impaired credit history people.
They are used to dealing with renters who usually have at least 2 years of recent rental history.
Bay Rentals acts as a medium between the renter and landlord that makes the process less like crawling the infiltration course.

~Misstrial

The reality it the rental market is great, you have twice the number of renters in the market with all the foreclosures, can't qualify and jsut waiting. First step is get the H out of the Bay area, a place like CO offers a better lifestyle at half the cost, I know I used to live in SF. You can buy a minimansion on a golf course for same price as 2 bd rent in SF

Start of the school year? New fiscal year for the mega agency that seems to own everything in SF? Just from anecdotal experience, looks like someone tacked on $50 - $100 to all the rents downtown (i'm look'n at you art academy..).

Deigning to respond to a post like that is one thing, but citing it as a contrarian market indicator is going too far.

deflation has many definitions, but it usually has something to do with the money and credit supply. If paper clips get absurdly cheap because somebody invents a machine that can crank out 1 per second instead of having to bend them by hand, that's not deflation. Most of the cost reductions in technology, at least the hardware end, are manufacturing innovations, just like the paper clip.

I paid $1000 for a computer 3 years ago that I could probably buy for a few hundred now. Did I get ripped off? Hell, no. I've gotten immeasurable value from it, and it's essential to my business.

cab says

lb says

I agree with MarkInSF. It’s all about the students. Late November/early December there are more vacancies than at the beginning of the school term (that is, now); but in May/early June there are the most.

Ib, what is happening in May and early June? Are students giving up their apartments or why are there a lot of vacancies in those months? (and thanks by the way for explaining)

Sorry cab, took me a bit to get back to this discussion.

Yes, in May and early June the students are leaving for the summer. I left San Francisco a year ago, but I rented there for many years and almost daily kept a watch on rental prices. The "best" (that is, most unique, less corporate) places to rent--like MILs and one-of-a-kind flats, places with yards and reasonable pet policies--aren't listed on the more corporate sites, since they're not high-density buildings attractive to REITs. There are huge numbers of unique, one-of-a-kind rentals through the Richmond and the Sunset that would never show up on those listing sites. For most people craigslist is still the first place to go to find a place to live. And the number of rentals as well as the price fluctuate throughout the year pretty predictably. That's my experience, anyway.

ptiemann says

thomas.wong as always has an extremely distorted view to justify his positions.

Nobody would call a $300 netbook a ‘top of the line’ machine. I was about to buy a netbook past Monday and most cost around $350. They are the opposite of ‘top-of-the-line’.
Prices for most goods have gone up and will continue to increase in the future.

The real question is whether incomes in the US will go up or not.
I can only speak from my own experience. In 1998 I earned $75k as a senior SW engineer in Santa Cruz County. In 2010 this kind of position pays about 110k (130k in Santa Clara).

110/75 = a 46% increase.
Movie tickets went from $6.50 to $11.

Food has more than doubled in these 12 years.
It is a bad trend. To me it says that the quality of life (in the US) will adjust downwards, for most people.

Exactly. Salary increases 46% but the home values increased 3 times. Quite a lot of disconnect.

@PolishKnight

Condos are in really bad shape right now due to very stiff competition from low end SFR. I am observing few zip codes I am interested and see more activity in 500K or less SFR. All those that were priced 800K+ at peak are languishing for months with a asking for 650K+. 1 million+ SFR seems like a complete dead zone.

ptiemann says

thomas.wong as always has an extremely distorted view to justify his positions....

Food has more than doubled in these 12 years.

More than doubled? That looks pretty distorted too.

One thing I've noticed in San Francisco is that a preponderance of new restaurants are on the upscale side (more investment in decor, better service, better ingredients, etc) and are more expensive than older restaurants . But to compare those prices would be comparing apples and oranges. The restaurants I've been going to for 15 years are not a whole lot more than they were in the late 90's. E.g chinese/thai dish was $6 and now it's $9. Groceries are up less than %50.

MarkInSF says

ptiemann says

thomas.wong as always has an extremely distorted view to justify his positions….
Food has more than doubled in these 12 years.

More than doubled? That looks pretty distorted too.
One thing I’ve noticed in San Francisco is that a preponderance of new restaurants are on the upscale side (more investment in decor, better service, better ingredients, etc) and are more expensive than older restaurants . But to compare those prices would be comparing apples and oranges. The restaurants I’ve been going to for 15 years are not a whole lot more than they were in the late 90’s. E.g chinese/thai dish was $6 and now it’s $9. Groceries are up less than %50.

This whole bread and butter talk just doesn't makes sense as they cover small fraction of income. I'd agree if it were mortgage/health insurance cost compared with salaries then and now.

Bap33 says

the rental ASKING numbers are for the EMPTY rents. The amount they are asking for those empty places is LOWER than it was last year, but they are empty now becasue the folks that used to live in them rented the LOWER priced rentals. The lower priced rentals are no longer advertised since they are rented.

I agree with the above statement.

xlr8 says

Patrick,

How far back does your Property finder data goes?

Back to January for SF, LA, Seattle, and Phoenix. Just beginning of August for San Diego.

Landlords are smart. They figured they can squat for 30 months and not get foreclosed. Can tenants live for 30 months homeless?

bubblesitter says

I’d agree if it were mortgage/health insurance cost compared with salaries then and now.

I wouldn't even agree that medical costs have more than doubled. BLS puts the number at about 60% since 1998.

Health insurance is more expensive partly because drugs/equipment/procedures are getting more expensive, but but mostly because we are using far more of them than we did 12 years ago. Aging population, way more testing - often tests which didn't even exist 15 years ago, more drugs - again, many that didn't even exist 15 years ago. MRI machines per capita have more than doubled since 2000.

To say medical costs have more than doubled is akin to saying LCD TV costs have soared, since people spend far more on LCD TV's than they did 12 years ago.

APOCALYPSEFUCK says

When despair sets in, people will just start burning their properties and selling them to the insurance companies. An explosion of arson is about to sweep America, part from despair and desperation and part from insensate rage at a banking and financial system designed to enslave Americans. Hahahahahahahahaha! Let the burning begin! Hahahahahahahahahaha!

But when a home gets burnt down, the owner does not cash out. Do the insurance companies not decide whether they want to replace or rebuild?

Which brings up another interesting thought. What happens to a severely underwater owner that burns down their home? The insurance will probably want to replace the home. Will they really just build a similar home to put on the banks' books?

Burning down doesn't really help when the house is under water.

APOCALYPSEFUCK says

Sure it does when you take the settlement and walk away from the note and the property.

That's not how it works....

"Landlords are smart. They figured they can squat for 30 months and not get foreclosed. Can tenants live for 30 months homeless?"

I'm sure that there's another article that addresses this, but can a landlord try to market a rental for a property that has been foreclosed upon without disclosing it to the buyer? Or can he even do something like this legally to begin with?

In any case, what renter would want to pay top dollar for a property that can be seized by the bank at any moment?

bubblesitter says: "Condos are in really bad shape right now due to very stiff competition from low end SFR. "

Do you mean they're in bad shape in that they are now priced higher for purchase, rental, or the opposite? (Prices for purchase going down?) I have just noticed some more price reductions for condos in my area (and this is NOT helping them move any faster although there are investors/flippers biting.)

It's amazing, really, that there are still people who didn't learn anything from the last bubble. When a market has a lot of people sitting on the sidelines and prices have just moved down a LITTLE bit, that's not a sign of a bottom but rather a BEGINNING of a downward slide.

PolishKnight says

bubblesitter says

What I meant was they priced very low to buy.

I've been looking at listings and I think they're MORE REASONABLE than in years past, but not really "low". IMO, they are still overpriced at about halfway through the bubble. Certainly they're more affordable than $600K SFH's.

SF ace says

Then there is the macro factors which should be a real concern for renters. There are very little new supply in the market and even less in the pipeline. If people are less concerned about losing their jobs and household starts to unbundle, rentals have nowhere to go but up. Job Growth will take it to another gear.

Macro factors? The macro factors are that baby boomers are beginning to retire in droves, many of them with no savings. They will be downsizing by choice or because their house is the only they they own that's worth anything. No, the Macro factors point to house prices being flat for decades.

The reason rents are rising in tight markets is because people are losing or walking away from their homes yet still need a place to live. Banks are not selling these properties so they sit vacant, pushing down supply. There's plenty of supply, it's just being withheld.

And what job growth are you talking about? Bernanke has said we need 100k new jobs per month to keep the unemployment rate stable. We're still bouncing along the bottom.

ptiemann says

thomas.wong as always has an extremely distorted view to justify his positions.
Nobody would call a $300 netbook a ‘top of the line’ machine. I was about to buy a netbook past Monday and most cost around $350. They are the opposite of ‘top-of-the-line’.

No i dont expect a former SV Engineer to understand once a consumer purchases a netbook, they forgo buying a "top of the line", opportunity cost, forces the competing producer to lower their cost in kind. Under the hood the netbooks have the same components, but cheaper labor from Taiwan. I seen this played out several times over for the past 25 years.

"Prices certainly don’t rise forever but they don’t fall forever either. This bear market in real estate has already exceeded every prior one in both magnitude and duration. Yet some of you are predicting further declines of 5 years and 50%. This cannot and will not happen."

I think 50% is aggressive myself BUT not inconceivable. In addition, it depends upon how long the decline takes. The runup took about 10 years and we're only about 3 years into the decline. So 5 years is quite reasonable. In fact... I and most bubblers here would prefer to see prices collapse ASAP because we could buy in all that much sooner AND the recovery could begin.

Why is 50% impossible? If prices could RISE 50%, why can't they fall 50%? This is an indication of "real estate can only go up" thinking. They can rise in one direction easily, but not fall. Why not? It's easy to see why prices can RISE in a growth market fueled by exuberance and speculation thinking: "Prices are going up and others made money so I can't lose! I'll be priced out!" and this causes 50% growth in an even shorter period of time. Yet, it's inconceivable to you that people can't think: "Why should I buy now when prices have fallen, continue to fall, and there's plenty of inventory? How can I be priced out when there's almost a year's worth of supply?"

If this bear market has been unprecedented, so has the bull market as well. Once again, if a 100% increase is ok because, hey, it's based upon past performance then why not the opposite direction? That's like saying that an elevator going down 100 floors means it's impossible to go down further because that's such a big number but not seing that going up 300 floors just 5 years ealier might be cause for the "floor" to not be reached yet.

And that "floor" is going to hurt knife catchers almost as badly as falling down in a real elevator...

Hey, good for them actually. Let them spend their life's savings on the "bottom" because the tax break caused a few months of weak growth. That'll save the taxpayers and banks a lot of money. Speaking of rich bankers...

"This isn’t true. Trillions of dollars went to prop up the banks and keep interest rates low, but most real estate investors now are paying cash."

This doesn't change the fact that trillions of dollars are continuing to go to the banks in order for them to keep empty houses on the books.

"The reason the banks needed to be propped up is deregulation by Republicans and the total absolute failure of Republican administrations to enforce antitrust laws on the books created banks that were too big to fail and would have taken the entire economy with them had they crashed."

"Deregulation" by "Republicans" means Bill Clinton and Barney Frank requiring banks to buy sub-prime loans for their special racist constituency groups that wanted to get in on the "real estate boom". It was GW Bush who called for MORE regulation of Fannie and Freddie...

Regarding "too big to fail"... Indeed, so much for the hopes of getting rid of the Republican establishment. You see, these big corporations run by capitalists are now the primary constituencies of the socialist state. OH, wait, they were all along. You don't think these socialist fatcats really CARED about you did they? Hahahaha!

The New Deal kept the country in a great depression for a decade until FDR... got us into a war! Yeah! Here's to the great solution of blowing money on wars and getting people killed! All praise warmongers! Oh, and then FDR went and gave away Eastern Europe to a bigger butcher than Hitler, his "ally" and f-buddy Josef Stalin because FDR LIED to the American people about his illness.

FYI, Ronald Reagan didn't want to bail out the "deregulated" banks in the 1980's. That was the Democrats idea because they didn't want to see THEIR wall street buddies take the hit.

Regarding the stock market... indeed! So much for the notion that HOUSING is a SAFE investment and STOCKS are just "paper", eh? Yeah, how are all the knife catchers doing on THAT idea? "I bought this great investment property in early 2010 after cashing out my portfolio at half price because the 'bottom' was here! I can hardly wait to sell it this fall because we all know how great the real estate market will rise now the bottom is past us!"

Hahahaha!

Your claim that the RE market is "gaining" in most areas is totally contrary to widely accepted reality. On the contrary, even in markets such as NoVA, buyers are sitting on the sidelines waiting for the "shadow inventory" to be released.

Which leads us to... the rents. OK, as I said, go ahead and celebrate. Many people here did say that rents could rise in the short term as buyers needed someplace to sit out the market. I was one of them. However... a 20% rise in rents for a year sure makes it worth the easily predicted 20% fall in RE values (much less 50% as some are saying.) Hmmmm, 20% of a years rent versus saving 20% on a purchases. Guess which one is greater? And that leads us to:

Owner/landlords who try to "wait out the market" and hope to see that "bottom" come aren't necessarily just playing with the banks' money. Some of them may have real equity from the boom they could cash out. In the Wash Post article, for example, the owner had put in $800K and tried to sell for a million. Then lowered by $50K Then by another $50K. That's called chasing down the market... In the end, he may be left with nothing.

And you didn't disprove my main point: That government money is going to the banks, directly and indirectly, and "too big to fail" capitalists as directed by SOCIALISTS in their pockets. I love it. When you vote for crooks, they act like crooks. Sorry to break it to you. If you want to believe in a religion, don't go for Marxism. Go catholic. They at least serve wine!

PolishKnight says

Deregulation” by “Republicans” means Bill Clinton and Barney Frank requiring banks to buy sub-prime loans for their special racist constituency groups that wanted to get in on the “real estate boom”. It was GW Bush who called for MORE regulation of Fannie and Freddie…

Really? This is the best you can come up with? I expected a little more...

Space requirements. :-) Do you REALLY want more?

Seriously though, I love how the real estate bubble is blamed on "deregulation" as defined by evil banks doing what the government told them to do. It's doublespeak.

I remember 5 years ago when these same people were chuckling about all their "preferential treatment" loans and how the "trashy, but overprivileged" conservatives were "missing out" on the real estate boom and special loans. Tee hee. Yeah, that really worked out well for them...

PolishKnight says

Seriously though, I love how the real estate bubble is blamed on “deregulation” as defined by evil banks doing what the government told them to do. It’s doublespeak.

That's utter nonsense. The government didn't tell them to do anything. Banks made the loans because they wanted to--pure and simple.

cab says

I’m not sure what MILs are but the rest of your response makes a lot of sense to me. I’ve decided to go old-fashioned and see what happens. I’m going to drive around neighborhoods and keep a notepad handy in my car and just look for For Rent signs with phone numbers to call

Sorry, cab. MIL = mother-in-law. In SF they're usually the bottom floor of a house, tricked out for independent living. Occasionally in SF there's an MIL unit behind a house.

The method you describe works when there are a lot of vacancies in town. I moved to SF at the beginning of the internet crash and there were lots of signs in windows. One thing I learned renting there is that the rent price asked is not necessarily non-negotiable. I rented a one-bedroom flat advertised for $1400 but ended up paying $1100 a month. The landlords were really tired of trying to rent the place and when I made the offer they jumped on it. Nice place, too.

Good luck to you.

sybrib says

But I don’t agree with you about places in close commute to the Bay Area dropping like a rock: modest neighborhoods in close commute to the Bay Area will continue to have high rents because those places are close to where the jobs are

That depends where you define your job at. No longer centered in Mt-View to Sunnyvale. Jobs are far too spread out across the 9 counties for landlords to have any upper hand.

For example Concord which is close to the East Bay, Walnut Creek, and BARTable to Frisco.

PolishKnight says

Not one single loan written in the United States during the real estate boom was forced on the banks. Every penny was voluntary.”
I guess it’s “voluntary” for me to drive in the speed limit too. I could exceed it if I don’t think I’ll get stopped…
Weaseling.

Huh? You use a very poor analogy and then call it weaseling? Face it--you are just flat wrong.

PolishKnight says

Seriously though, I love how the real estate bubble is blamed on “deregulation” as defined by evil banks doing what the government told them to do

Most sub-prime lenders were not even commercial banks subject to regulation. They were specialty mortgage companies that wrote loans, sold them to wall street investment banks, where they were packaged up and sold as secuturies. Nowhere along the way was the government telling them to do this. That is just ridiculous nonsense.

MarkInSF, these "mortgage companies" are not banks. The banks ordered to buy the bad securities were ordered to do so for political reasons based upon race and gender. Perhaps the great irony of leftism is that the groups that suffer the most tend to be their constituencies. After all, if their special interest groups ever were to become wealthy or succesful, then they wouldn't need socialist preferential treatment anymore.

PolishKnight says

MarkInSF, these “mortgage companies” are not banks. The banks ordered to buy the bad securities were ordered to do so for political reasons based upon race and gender.

Wrong. This has been disproven mutliple times. There are several old threads on pat.net where it has been thoroughly debunked.

"the CRA thing has been very thoroughly discredited many times over by many people with impeccable credentials"

I feel like I've stepped into the twilight zone. Patrick.net has tons of links and comments about how Freddie and Fannie helped cause the bubble in the first place due to the CRA and also the subsequent crash and how government is CONTINUING to prop up bad debt. You know, the one where Democrats control both houses and the presidency?

Yeah, sure. Keep on believing that. "The power of leftism (and the Koran) compels you! The power of leftism (and the Koran) compels you!" :-)

I hear that the climate is changing. It's changed in the last month and it's causing the leaves to change color. They may even fall in the next month...

I could be way off, but aren't sales down YoY, MoM, and foreclosures and supply way up? Generally speaking, of course. I know SF and NYC are Different and Special. I've read too many articles and glossed too many charts, so maybe my hold on the facts is shakey here.

CNBC (for whatever they are worth) is right now on my boob tube telling me that the volume of housing sales were most definitely in a decline YoY.

Rents are more directly tied to wages. That's a fundamental. With unemployment at 12%, plus another 10-15% of UNDERemployment, I'm not convinced. However, given that a former homeowner was paying easily 50% more per month in a Big Fancy City than a renter would have paid for a similarly-appraised property, perhaps that 50% margin between renters and former homeowners is pulling rentals up in these Big Fancy Cities. It's the great downward squeeze.

"The CRA has never forced a single institution to make a loan since its inception. Furthermore CRA banks actually wrote fewer toxic loans than non-CRA banks did.
If you were honest, you’d confirm these facts."

Perhaps the source of your frustration is that your claimed facts don't, by themselves, make them facts.

For example, let's define your "facts": How many banks are "CRA"? How many are not? What percentage of bad loans are CRA and not? How many CRA banks exist compared to nonCRA banks? What IS a CRA bank?

Why is it a failure of my "honesty" for you to make unsupported claims? You sure don't seem in a rush to confirm where my "facts" are right.

Amazing.

"You’re not going to believe a word I say on the subject which is why I want YOU to research it for yourself and discover how silly your beliefs are."

Think through what you just said. Let's pick it apart piece by piece:

You start out by saying I'm not going to believe a word you say. So by definition, arguing with me is pointless according to you (and also a great copout.) Smart people usually end it here.

But then you say that you expect me to go out and prove your argument for you. If only people were that helpful. Yet you just claimed that I'm anything but helpful.

Then you have the nerve to say I'm the one with silly beliefs.

Yeah, good luck with that method of argument.

You then turn around and engage in an argument of equivalence and redirection:

"So I guess my question is why you demand all kinds of evidence from me when you’re totally 100% incapable of providing any evidence for anything you’ve said in this entire thread? "

For starters, that's a loaded question. I disagree with you that I'm "100% incapable of providing any evidence for anything I've said in this entire thread." I just provided URL's. In any case, YOU are the one demanding I do YOUR research for you even as you just said I'm "100%" incapable of doing so.

Again, amazing.

PolishKnight says

For starters, that’s a loaded question. I disagree with you that I’m “100% incapable of providing any evidence for anything I’ve said in this entire thread.” I just provided URL’s

You did?

No offense, but doesn't a case of Obama suing because minorities weren't getting loans prove exactly the opposite of what you are arguing? If the banks were writing these loans, there would be no lawsuits, right?

And your wiki quote says things "could" have happened. We're not interested in what "could" have happened. The bubble is over--what we need to find is what DID happen.