“Foreclosures add to tight rental market”
Foreclosures add to tight rental market – San Jose Mercury News
Record numbers of Silicon Valley homeowners have been foreclosed upon this year, and most must seek rental housing once they leave their homes. If tenant-occupied houses are in foreclosure, tenants nearly always get evicted, pushing them into the rental market again. And many renters who could afford to buy homes size up the bleak economy and opt not to take on mortgages and home ownership.The result: It’s a competitive market for those seeking reasonably priced rentals, and it’s a pretty good time to be a landlord.
[snip]
Average apartment rents rose 5.2 percent in Santa Clara County in the third quarter, to $1,708 a month, according to RealFacts, a Marin County firm that measures average monthly rents for all types of units in complexes of at least 50 units.
But rent increases in the third quarter were not as steep as in the second quarter, a sign of the softening economy. And RealFacts said apartment complexes were 95.6 percent full in the July-to-September quarter, down from 96.7 percent a year earlier.
One reason apartment occupancy rates are slipping is that more single-family houses are coming onto the market as rentals, said Joshua Howard, executive director of the local division of the California Apartment Association. Some of those houses are previous foreclosures that were purchased by investors.
Sweet! It’s now a great time to become a landlord. Once the economy gets a little better, rents will soar and instantly start racing with house prices to see who can win the title of “biggest increase per year.”
Man oh man… 2009 is going to party like 1999! You read it here first!
October 25th, 2008 at 9:46 am
I have a question for anyone familiar with Willow Glen. There is a listing on Clintonia, looks to be near Biebrach Park. Is this a bad area?
TIA
October 25th, 2008 at 10:00 am
Yes thats a bad area. Anything to the right of bird is bad, which is not to say you shouldn’t buy there just know what you are buying.
The best part of Willow Glen is actually to the left of Lincoln, between Lincoln and Minnesota and Curtner and Cherry, thats where the mini Mansions are. Something on Clintonia there is a borderline area, not bad, just know what you are buying.
October 25th, 2008 at 10:04 am
Not the best, not the worst. Hope you like palm trees. I see two listings, 810 and 1057 Clintonia, both of which seem well priced for the area.
October 25th, 2008 at 10:06 am
Thanks! That helps a lot – totally new to looking in Willow Glen.
October 25th, 2008 at 2:28 pm
Sounds like you really did dring the kool-aid. Congratulations and good luck!
October 25th, 2008 at 3:47 pm
LOL that is a different anon, BTW
October 25th, 2008 at 3:49 pm
Perhaps a new handle is in order.
October 25th, 2008 at 4:57 pm
There’s indeed a caveat here, which is that indeed- there might be more competition for rentals, but the rents can only go so high if the economy is bad. Laid-off people can only pay so much. This isn’t anything close to a dot-com economy by a long shot. Keep dreaming landlords…
October 25th, 2008 at 9:44 pm
Is this the anon that’s on hiatus, or the Mr. Hiatus that is anon?
October 25th, 2008 at 10:31 pm
I hope that was an attempt at humor since it ought to be quite obvious.
(Thanks for the clarification, Mr. Hiatus.)
October 25th, 2008 at 11:15 pm
No prob.
By the way bob….You’re right that this is not the dot com era. But, there is a huge difference between now and then. Back then real property was an appreciating asset. Now it is a depreciating one. Even NAR is forecasting a 6% drop in properties over the course of the next year. Let’s say they’re correct (I’ll bet you they’re way low). A 6% equity burn on a half million dollar piece of property is $2,500 a month. What is a couple hundred dollars a month more in rent compared to $2,500 a month equity burn? Nothing. Aside from the knife catchers, people are starting to figure this out and less and less people want to buy. For this reason, I believe rent will continue to rise or at least stay the same. It will certainly not drop substantially barring an economic disaster (no – this is not one; its a return of sanity).
Such is my belief.
Now, where’s my kool aid?!
October 25th, 2008 at 11:27 pm
“I hope that was an attempt at humor since it ought to be quite obvious.”
Btw, let’s at least give the guy some mercy points for trying.
Even if it wasn’t funny or clever and didn’t make sense…
October 26th, 2008 at 6:22 pm
I will buy when I can get a place I’d like to call home for $1500 a month, after insurance and taxes, with only the FHA minimum 3.5% down (after Jan 1). That’s what I can afford. I don’t see that happening soon, but it’s getting closer. A place that would fit my criteria would be a two-bedroom cottage or condo in SF or the northern peninsula. Even a quiet block of 94124 wouldn’t be too bad, but I drove by 2166 Revere and that was fucking scary. Wrecked and stripped cars double-parked all down the street, trash in every yard, and crackheads wandering aimlessly down the street that runs under the double-decker 280. I couldn’t live in a place like that.
October 26th, 2008 at 10:20 pm
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