Comments on: Don’t Catch a Falling Guillotine: Housing Free Falling in Southern California. A Deep Look at the Numbers. http://www.doctorhousingbubble.com/dont-catch-a-falling-guillotine-housing-free-falling-in-southern-california-a-deep-look-at-the-numbers/ How I Learned to Love Southern California and Forget the Housing Bubble Thu, 18 Mar 2010 17:15:41 +0000 http://wordpress.org/?v=2.9.2 hourly 1 By: DADDY YANKEE http://www.doctorhousingbubble.com/dont-catch-a-falling-guillotine-housing-free-falling-in-southern-california-a-deep-look-at-the-numbers/comment-page-1/#comment-14438 DADDY YANKEE Mon, 12 May 2008 12:29:40 +0000 http://www.doctorhousingbubble.com/dont-catch-a-falling-guillotine-housing-free-falling-in-southern-california-a-deep-look-at-the-numbers/#comment-14438 Rents? Vacancies are increasing, asking/effective rents are down in many areas. The consumer's hanging on by a thread: high energy/food costs, overwhelming debt, declining wages, rising unemployment, etc. Add a recession and you've reached the tipping point (already starting to see the effects of the implosion from the FIRE sector alone). Although the multifamily market isn't overbuilt like the late 80s boom, a lot of units were taken offline for condo conversions, shadow inventory from SFR/condos, and at the end of the day the "it's cheaper than buying" argument held up. Rents basically moved in lockstep with home prices. In tough times people move back home, get roommates, etc. In some cities rent/purchase costs have almost reached parity. It's funny to look at deals from a year ago: $1.5k actual rents, $1.8k proforma, today they're sitting empty @ $1.2k The same I/O and/or high LTV was done on the commercial side -- virtually every property that changed hands in the past couple years. Pure speculative purchases producing little/no income, lots of people will go belly up. Rents? Vacancies are increasing, asking/effective rents are down in many areas.

The consumer’s hanging on by a thread: high energy/food costs, overwhelming debt, declining wages, rising unemployment, etc. Add a recession and you’ve reached the tipping point (already starting to see the effects of the implosion from the FIRE sector alone).

Although the multifamily market isn’t overbuilt like the late 80s boom, a lot of units were taken offline for condo conversions, shadow inventory from SFR/condos, and at the end of the day the “it’s cheaper than buying” argument held up. Rents basically moved in lockstep with home prices.

In tough times people move back home, get roommates, etc.

In some cities rent/purchase costs have almost reached parity.

It’s funny to look at deals from a year ago: $1.5k actual rents, $1.8k proforma, today they’re sitting empty @ $1.2k

The same I/O and/or high LTV was done on the commercial side — virtually every property that changed hands in the past couple years. Pure speculative purchases producing little/no income, lots of people will go belly up.

]]> By: rick http://www.doctorhousingbubble.com/dont-catch-a-falling-guillotine-housing-free-falling-in-southern-california-a-deep-look-at-the-numbers/comment-page-1/#comment-9514 rick Sat, 15 Mar 2008 16:12:28 +0000 http://www.doctorhousingbubble.com/dont-catch-a-falling-guillotine-housing-free-falling-in-southern-california-a-deep-look-at-the-numbers/#comment-9514 Those who have just been foreclosed on will not be able to afford $2000+ unless they did not even try to fight and just walk away. If they do their life has turned upside down, and I kind of doubt they are ready to spend much with their savings gone and their CC loaded. Also if I were a landlord I would be stupid not to demand a lot of deposit from these people, I think many of them on the higher end simply avoid FBs. So many stories of FBs just walk away or rip everything out of the house or fight silly battles with lenders, several thousand dollars are not going to cover the very likely hazzle. Those who have just been foreclosed on will not be able to afford $2000+ unless they did not even try to fight and just walk away. If they do their life has turned upside down, and I kind of doubt they are ready to spend much with their savings gone and their CC loaded.

Also if I were a landlord I would be stupid not to demand a lot of deposit from these people, I think many of them on the higher end simply avoid FBs. So many stories of FBs just walk away or rip everything out of the house or fight silly battles with lenders, several thousand dollars are not going to cover the very likely hazzle.

]]> By: Andy http://www.doctorhousingbubble.com/dont-catch-a-falling-guillotine-housing-free-falling-in-southern-california-a-deep-look-at-the-numbers/comment-page-1/#comment-9508 Andy Sat, 15 Mar 2008 08:13:45 +0000 http://www.doctorhousingbubble.com/dont-catch-a-falling-guillotine-housing-free-falling-in-southern-california-a-deep-look-at-the-numbers/#comment-9508 Rents-I think people who tried to flip could not sell. Now they have decided to rent out their "flips gone bad". "I'll rent it out till it goes up again" theory is not working (how long can you cover that monthly negative?) . Their not paying the mortgage and still collecting rents. Now they're bank owned and banks are not in the business of renting out houses. Rents-I think people who tried to flip could not sell. Now they have decided to rent out their “flips gone bad”. “I’ll rent it out till it goes up again” theory is not working (how long can you cover that monthly negative?) . Their not paying the mortgage and still collecting rents. Now they’re bank owned and banks are not in the business of renting out houses.

]]> By: Genius http://www.doctorhousingbubble.com/dont-catch-a-falling-guillotine-housing-free-falling-in-southern-california-a-deep-look-at-the-numbers/comment-page-1/#comment-9507 Genius Sat, 15 Mar 2008 07:37:26 +0000 http://www.doctorhousingbubble.com/dont-catch-a-falling-guillotine-housing-free-falling-in-southern-california-a-deep-look-at-the-numbers/#comment-9507 Rents typically fall in times of contraction. I expect to renegotiate for lower rent sometime by the end of the year. Or just move somewhere better for less... FWIW, most of the listings I see on craigslist are overpriced compared with the listings I see on westsiderentals.com. Rents typically fall in times of contraction. I expect to renegotiate for lower rent sometime by the end of the year. Or just move somewhere better for less…

FWIW, most of the listings I see on craigslist are overpriced compared with the listings I see on westsiderentals.com.

]]> By: Li http://www.doctorhousingbubble.com/dont-catch-a-falling-guillotine-housing-free-falling-in-southern-california-a-deep-look-at-the-numbers/comment-page-1/#comment-9502 Li Sat, 15 Mar 2008 01:42:38 +0000 http://www.doctorhousingbubble.com/dont-catch-a-falling-guillotine-housing-free-falling-in-southern-california-a-deep-look-at-the-numbers/#comment-9502 My guess is that landlords are going to ask for bigger deposits for renters with poor credit, but the flood of unsold houses and condos on the market is going to keep rents low, My guess is that landlords are going to ask for bigger deposits for renters with poor credit, but the flood of unsold houses and condos on the market is going to keep rents low,

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