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Asking rents in San Francisco continue to slip, but…

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Re: Asking rents in San Francisco continue to slip, but…

#31

Post by thanhhaimai »

bcrosby95 wrote: post #8
riazrizvi wrote: post #2

The systemic problem is that investors are buying up residential property inventory, because there is a massive amount of near 0% cash available to a thin slice of the population. So even though there are as many people as there were roughly a year ago, there are far fewer homes. Hence purchase prices are rocketing up and rental prices are drifting down. There is no strong political will to solve this problem, becaus…

It's less of a problem because you can opt out of buying a home by renting. This is what happened back in the 00s and I know a lot of people that rented to opt out of the purchase market. Speaking personally, I rented a 3 bedroom home in Los Gatos for $2k/month, which was "valued" at around $1 million. The difference this time is its on top of huge increases in home prices and rents. So I think you wouldn't see that…

I'm paying $2500/month mortgage for a home valued at $1.1m. For the extra $500/month, I get: mortgage interest tax deduction, a house after 30 years, the freedom to modify my home the way I like, the security of knowing I'm not at the mercy of the landlord.

Personally, I think for the extra $500/month, buying is a better choice than renting; at least for me.

Re: Asking rents in San Francisco continue to slip, but…

#32

Post by rodgerd »

riazrizvi wrote: post #2

The systemic problem is that investors are buying up residential property inventory, because there is a massive amount of near 0% cash available to a thin slice of the population. So even though there are as many people as there were roughly a year ago, there are far fewer homes. Hence purchase prices are rocketing up and rental prices are drifting down. There is no strong political will to solve this problem, becaus…

> The systemic problem is that investors are buying up residential property inventory, because there is a massive amount of near 0% cash available to a thin slice of the population.

This is absolutely a global problem: New Zealand, Australia, parts of Canada, the UK, are all having the same issues.

Re: Asking rents in San Francisco continue to slip, but…

#33

Post by rodgerd »

cheriot wrote: post #17
riazrizvi wrote: post #2

The systemic problem is that investors are buying up residential property inventory, because there is a massive amount of near 0% cash available to a thin slice of the population. So even though there are as many people as there were roughly a year ago, there are far fewer homes. Hence purchase prices are rocketing up and rental prices are drifting down. There is no strong political will to solve this problem, becaus…

> The systemic problem is that investors are buying up residential property inventory Are you assuming that it's somehow sensible to buy property and leave it empty? Owner vs rental doesn't change the number of homes available.

Capital gains in the markets I'm familiar with - and this is an international problem - dwarf any rental income.

In Auckland, New Zealand, average capital gains exceed $40,000 per month. Land banking is incredibly lucrative.

Re: Asking rents in San Francisco continue to slip, but…

#34

Post by jjnoakes »

thanhhaimai wrote: post #31
bcrosby95 wrote: post #8

Earlier quoted context omitted.

It's less of a problem because you can opt out of buying a home by renting. This is what happened back in the 00s and I know a lot of people that rented to opt out of the purchase market. Speaking personally, I rented a 3 bedroom home in Los Gatos for $2k/month, which was "valued" at around $1 million. The difference this time is its on top of huge increases in home prices and rents. So I think you wouldn't see that…

I'm paying $2500/month mortgage for a home valued at $1.1m. For the extra $500/month, I get: mortgage interest tax deduction, a house after 30 years, the freedom to modify my home the way I like, the security of knowing I'm not at the mercy of the landlord. Personally, I think for the extra $500/month, buying is a better choice than renting; at least for me.

The main difference is your mortgage was likely acquired long before the value reached that level.

The choice was never between renting and buying a $1m home for a $500/mo difference.

Re: Asking rents in San Francisco continue to slip, but…

#35

Post by PragmaticPulp »

hackeraccount wrote: post #10

That relationship - when purchase prices go up rents go down and vice versa has always seemed odd to me. When you think about it, it makes sense but you'd think most people wouldn't have the flexibility to move between renting and owning.

Investors buy properties and rent them out when they have access to cheap loans. This increases demand on house purchases, but increases supply of rentals.

Home prices go up, rental prices go down.

Re: Asking rents in San Francisco continue to slip, but…

#36

Post by Logon90 »

tenpies wrote: post #6
Camillo wrote: post #4

Earlier quoted context omitted.

Is it better to buy a home for investment than it is to buy stocks?

Depends on geography. For example, in Canada, housing is up 30% YoY. Trudeau's Federal government recently said that even a 10% correction in housing would be unacceptable. In practice, Canadian housing isn't housing - it's a 30% (or better) government bond that you get to live in or rent out. That's a 30% return guaranteed by a sovereign state that will gladly destroy everything else in the country to prop up housin…

A 30% return on real estate or a 30% depreciation of CAD? That's the interesting question. Though the best one to ask at this point is: crypto or real estate?

Re: Asking rents in San Francisco continue to slip, but…

#37

Post by barry-cotter »

rodgerd wrote: post #32
riazrizvi wrote: post #2

The systemic problem is that investors are buying up residential property inventory, because there is a massive amount of near 0% cash available to a thin slice of the population. So even though there are as many people as there were roughly a year ago, there are far fewer homes. Hence purchase prices are rocketing up and rental prices are drifting down. There is no strong political will to solve this problem, becaus…

> The systemic problem is that investors are buying up residential property inventory, because there is a massive amount of near 0% cash available to a thin slice of the population. This is absolutely a global problem: New Zealand, Australia, parts of Canada, the UK, are all having the same issues.

Japan doesn’t have this problem because they build housing sufficient to meet demand. Deciding not to build enough housing to meet demand so property owners make money: It’s the Anglo way.

Re: Asking rents in San Francisco continue to slip, but…

#38

Post by hn_throwaway_99 »

thanhhaimai wrote: post #31
bcrosby95 wrote: post #8

Earlier quoted context omitted.

It's less of a problem because you can opt out of buying a home by renting. This is what happened back in the 00s and I know a lot of people that rented to opt out of the purchase market. Speaking personally, I rented a 3 bedroom home in Los Gatos for $2k/month, which was "valued" at around $1 million. The difference this time is its on top of huge increases in home prices and rents. So I think you wouldn't see that…

I'm paying $2500/month mortgage for a home valued at $1.1m. For the extra $500/month, I get: mortgage interest tax deduction, a house after 30 years, the freedom to modify my home the way I like, the security of knowing I'm not at the mercy of the landlord. Personally, I think for the extra $500/month, buying is a better choice than renting; at least for me.

I'm assuming your property taxes are not $0?? I don't know where you live but in Texas property taxes on a $1.1 million home are about $2,300 a month

Re: Asking rents in San Francisco continue to slip, but…

#39

Post by tadeegan »

Ive noticed that the rentals on the market, while cheaper are generally lower quality. It seems to me that many landlords are opting for airbnb, where you can find 1 fully furnished 1 bedrooms for 2k$ a month rather than lock in a rent controlled tenant at the current prices.

Re: Asking rents in San Francisco continue to slip, but…

#40

Post by CoastalCoder »

hn_throwaway_99 wrote: post #38
thanhhaimai wrote: post #31

Earlier quoted context omitted.

I'm paying $2500/month mortgage for a home valued at $1.1m. For the extra $500/month, I get: mortgage interest tax deduction, a house after 30 years, the freedom to modify my home the way I like, the security of knowing I'm not at the mercy of the landlord. Personally, I think for the extra $500/month, buying is a better choice than renting; at least for me.

I'm assuming your property taxes are not $0?? I don't know where you live but in Texas property taxes on a $1.1 million home are about $2,300 a month

In the U.S. at least, property taxes are normally treated as part of the mortgage payment.

They're not technically part of the mortgage payment, but they're a line-item in your monthly payment to the lender.

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