patrick.net

Soberity isnt very pretty.

This is very sad news for people who want to pay more but not to worry i am sure there are housing bulls somewhere out there just waiting for no income verification loans and 0 down to comeback to make new construction homes expensive again.

Well, I can say from personal experience that 0 NEW homes sold in my neighborhood. Then again, there are 0 NEW homes for sale in my neighborhood, so I don't think that's really much of a concern.

cab says

No sign of that around here in SF. Nowhere close.

U FUNNY

I think the doom & gloom is being overdone.

In the end this bad news is just more ammo for the folks pushing for principal reductions.

toothfairy says

In the end this bad news is just more ammo for the folks pushing for principal reductions.

It's the only ammo for their argument, but it's not nearly enough. There's no rational financial, economic, or moral argument that can be made to support principal reductions. Not gonna happen, sorry.

SF ace says

It’s a drag on construction industry, growth and jobs, especially in areas that rely on new constructions. It just means GDP growth will be modest with the construction industry still shrinking.
From a longer term view, new homes construction plunge is absolutely great development for landlords. You go through an extended period of dismal construction and it just means vacancy rate will be going down from here. Vacancy rate is clearly trending down already. The conditions are set for above normal rent escalation for the next 10 years.
It’s be careful what you wish for.

Largess has to be paid for. Extend, pretend, and self-delusion doesn't help anybody.

SF ace says

It’s a drag on construction industry, growth and jobs, especially in areas that rely on new constructions. It just means GDP growth will be modest with the construction industry still shrinking.
From a longer term view, new homes construction plunge is absolutely great development for landlords. You go through an extended period of dismal construction and it just means vacancy rate will be going down from here. Vacancy rate is clearly trending down already. The conditions are set for above normal rent escalation for the next 10 years.
It’s be careful what you wish for.

Except for all the landlords jumping in on the housing market right now is even a bigger drag on rental rates. Many of these landlords seem to look only at the demand side of the picture, completely ignoring the supply side.

SF ace says

It’s a drag on construction industry, growth and jobs, especially in areas that rely on new constructions. It just means GDP growth will be modest with the construction industry still shrinking.

From a longer term view, new homes construction plunge is absolutely great development for landlords. You go through an extended period of dismal construction and it just means vacancy rate will be going down from here. Vacancy rate is clearly trending down already. The conditions are set for above normal rent escalation for the next 10 years.

Maybe. Alternatively, unemployed/underemployed people may not be able to make rent if food and fuel prices climb faster than their incomes. They'd be forced to co-habitate with family and friends, or become homeless, thereby curbing the downswing in vacancy rate.

SF ace says

It’s a drag on construction industry, growth and jobs, especially in areas that rely on new constructions. It just means GDP growth will be modest with the construction industry still shrinking.

From a longer term view, new homes construction plunge is absolutely great development for landlords. You go through an extended period of dismal construction and it just means vacancy rate will be going down from here. Vacancy rate is clearly trending down already. The conditions are set for above normal rent escalation for the next 10 years.

It’s be careful what you wish for.

Drag on construction industry is going to create layoffs and on a consumer driven economy (ours is 70% consumer driven) that helps rents to go up ?wise man sad once fundamentals of our economy are strong but only aplies if u want to be rich man in poor country.

SF ace says

This is exactly looking at the supply side. The industry is building at 1/4 to 1/3 of normal. If this keeps up for another five years, rents will be way higher than they are now. 5% vacancy rate is very very favorable to be a landlord to push rent up.

'The industry, has no interest in keeping high prices and increasing number of unsold inventory. Like any other industry they will adjust, build and sell at lower prices. As in recent years, when prices decline, they are forced to mark down their 'unsold inventory' rather quickly within 90 days. There is very little if any emotions when it comes to builders/construction.

Shrinking jobs continue and will lower much of the demand some claim that will inflate rental prices. Good luck on that one!

dodgerfanjohn says

I’m 38 and make on the upper edges of middle class for a single person in Los Angeles.

My current rent is $1550/mo. I could afford more, but theres really no reason too. All it would buy me is a bit more space.

If rents were to “skyrocket”(LOL at the hyperbolic language)…go up 25-30%….I’d simply go live with my parents, whose home is basically paid off. Or my brother and his wife, who have already extended the invitation. This of course assumes my parents live into their 100’s and that I wouldn’t actually inherit their ocean view coastal OC home.

Each of my close friends in my age range is already in this situation….

I'm not sure what's sadder ... a 38-year-old man who makes good money moving in with his parents because his rent would be $2,000/month, or thinking that people in this situation drive demand for the rental market.

I'm no housing bull, but this argument just makes no sense to me.

NJ says

be $2,000/month, or thinking that people in this situation drive demand for the rental market.
I’m no housing bull, but this argument just makes no sense

Hmmm makes no sense to me to pay 35% of my take home pay for rent when I can live for free in a home designed to accomodate 6 adults, but where only two reside.

Maybe each of us has their own breaking point?

OTOH, maybe I'm coming in on the low end of "skyrocketing".

Or maybe I'm using just as hyberbolic an argument as someone who so carelessly tosses out the term "skyrocketing?

Who knows?

thank you for avoiding the "L" word, it makes your posts more credible.

unemployment number is trending lover not actual unemployment

Median price for existing/used houses is now at April 2002 levels, in the 150K area range.

Median price for new houses is now down to 2003 levels, just barely 200K or so.

And in both cases still way too expensive!

APOCALYPSEFUCK says

The only thing houses are good for now are as cheap sources of firewood

My house gives me shelter and a place for my stuff. Are you homeless?
Oh wait, maybe you're one of those folks who travels the country in an RV.
Having no permanent residence (once retired) actually sounds pretty appealing, Banking and bill payment can be done online. I won't miss the junk mail. Where do I receive delivery of my online purchases? And I can't figure out how I would pick a state to register my vehicle or get a DL.

robertoaribas says

dodgerfanjohn says

My current rent is $1550/mo. I could afford more, but theres really no reason too. All it would buy me is a bit more space.

If rents were to "skyrocket"(LOL at the hyperbolic language)...go up 25-30%....I'd simply go live with my parents, whose home is basically paid off.

great life plan!!!

what the hell is a guy making as little as you do paying $1500 a month for rent? I make probably close to three times as much as you, and my mortgage is $1147.

I probably make 5 times what you and my mortgage is only $987 so whats your point? He's paying more in rent because he lives in L.A. and not the armpit of AZ dude. Not an apples to apples comparision. Your mortgage my be lower but at least dodgerfan isn't baking his nutsack off in the middle of Shitzville.

It's pretty weak when you have to start throwing out "what you make" to try and get your point across my friend.

My rent is only $400/month and that also includes free heat. The local economy here is booming. New houses are being built everywhere and going up in value. Finding a place to rent or buy is almost impossible?
The truth is the whole country isn't screwed up, just 2/3 of it.
BTW, I would prefer to not say where I'm living.
Do your own research. Nice places are still out there.

Phoenix, AZ just had a 4th record high temperature - 118 degrees.

Just wait until it hits 130 degrees. All houses will be empty :)

xenogear3 says

Phoenix, AZ just had a 4th record high temperature - 118 degrees.

Just wait until it hits 130 degrees. All houses will be empty :)

At 132 they will spontaneously combust.

I hope rents sky rocket and all you renter needs to get 35 roommates

Smallblock57 says

It's pretty weak when you have to start throwing out "what you make" to try
and get your point across my friend.

No, it's pretty weak when you have to sink to the "well my city is better than your city" argument...

tatupu70 says

Smallblock57 says

It's pretty weak when you have to start throwing out "what you make" to try
and get your point across my friend.

No, it's pretty weak when you have to sink to the "well my city is better than your city" argument...

LOL .........L.A is not my "city" and besides I never said one was better than the other......as a matter of fact both are shitholes......happy? : )

Smallblock57 says

LOL .........L.A is not my "city" and besides I never said one was better
than the other......as a matter of fact both are shitholes......happy? : )

lol--OK. I'm happy.

schmitz_kris says

http://news.yahoo.com/s/ap/us_new_home_sales

Page not found error.

APOCALYPSEFUCK is Shostakovich says

The only thing houses are good for now are as cheap sources of firewood

Damn, houses in Florida are made of concrete, not wood, because of hurricanes. I guess when the cannibal anarchy comes, we'll have to use the more decomposed bodies as fire fuel.