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Nov 20, 2009 | No Comments | Sean Mills
Renting costs in Southern California fell at an annual rate for the first time in 14 years, according to the freshest Bureau cheap drugs no prescription of Labor Statistics’ Consumer Price Index.
Local renters’ costs fell 0.1% last month vs. October 2008. Last such SoCal decline? A similar size drop in November 1995.
Renters weren’t the [...]
Renting costs in Southern California fell at an annual rate for the first time in 14 years, according to the freshest Bureau cheap drugs no prescription of Labor Statistics’ Consumer Price Index.
Local renters’ costs fell 0.1% last month vs. October 2008. Last such SoCal decline? A similar size drop in November 1995.
Renters weren’t the only housing winners in the CPI report:
- Homeowners equivalent inflation rate (purchase costs not included), fell at an 0.7% annual rate in October. That’s biggest SoCal drop since June 1995.
- Household energy costs in SoCal fell at an 0.7% annual rate in October.Actually, that’s the smallest drop in a string of declines that dates to last November.
- Household furnishings and operations fell at an 2.5% annual rate in October. That’s biggest SoCal drop since April 2008.
- Overall, SoCal housing inflation fell at an 0.6% annual rate in October — fourth consecutive drop and biggest since June 1983.
- As for the big picture, SoCal total inflation rate for all goods and services fell at an 0.4% annual rate in October. It’s the eighth consecutive drop — but that smallest in that string.
Oct 29, 2009 | No Comments | Sean Mills
This morning the Census Bureau reported the homeownership and vacancy rates for Q3 2009. Here are a few graphs …
Click on graph for larger image in new window.
The homeownership rate increased slightly to 67.6% and is now at the levels of Q2 2000.
Note: graph starts at 60% to better show the change.
The homeownership rate [...]
This morning the Census Bureau reported the homeownership and vacancy rates for Q3 2009. Here are a few graphs …
buy antibiotics alt=”Homeownership Rate” /> Click on graph for larger image in new window.
The homeownership rate increased slightly to 67.6% and is now at the levels of Q2 2000.
Note: graph starts at 60% to better show the change.
The homeownership rate increased in the ’90s and early ’00s because of changes in demographics and “innovations” in mortgage lending. The increase due to demographics (older population) will probably stick, so I expect the rate to decline to the 66% to 67% range – and not all the way back to 64% to 65%.
The small increase in the homeownership rate in Q3 might by related to the first-time home buyer tax credit, but I expect the rate to decline further.
The homeowner vacancy rate was 2.6% in Q3 2009.
A normal rate for recent years appears to be about 1.7%.
This leaves the homeowner vacancy rate about 0.9% above normal, and with approximately 75.3 million homeowner occupied homes; this suggests there are close to 675 thousand excess vacant homes.
And as expected, as a result of the first-time homebuyer tax credit …
The rental vacancy rate increased to a record 11.1% in Q3 2009.
It’s hard to define a “normal” rental vacancy rate based on the historical series, but we can probably expect the rate to trend back towards 8%. According to the Census Bureau there are close to 40 million rental units in the U.S. If the rental vacancy rate declined from 11.1% to 8%, there would be 3.1% X 40 million units or about 1.25 million units absorbed.
These excess units will keep pressure on rents and house prices for some time.
Source Article
Oct 22, 2009 | No Comments | Sean Mills
(Calculated Risk)
From the Mercury News: Santa Clara County apartment rents plunge
Apartment rents plunged 10 percent in Santa Clara County in the third quarter compared with a year earlier, the biggest decline in any metro area in the Western United States …
From the Las Vegas Sun: LV apartment rental rates decline in third quarter
RealFacts … said [...]
(Calculated Risk)
From the Mercury News: Santa Clara County apartment rents plunge
Apartment rents plunged 10 percent in Santa Clara County in the third quarter compared with a year earlier, the biggest decline in any metro area in the Western United States …
From the Las Vegas Sun: LV apartment rental rates decline in third quarter
RealFacts … said the average asking price for apartments in the Las Vegas area in the quarter was $837, down 2.1 percent from $855 in the second quarter and down 5.7 percent from $887 one year ago.
From Bloomberg: Apartment Rents Decline in U.S. West as Unemployment Increases
Apartment rents declined throughout the U.S. West and South in the third quarter as rising unemployment made it harder for landlords to raise their rates.
The average asking rent fell to $965 from $1,002 a year earlier, said Novato, California-based RealFacts, which surveyed owners of more than 12,600 complexes. The occupancy rate dipped below 92 percent from almost 93 percent a year earlier.
…
In California’s Oxnard-Thousand Oaks-Ventura region, rents fell 7.4 percent to $1,429, and in the Seattle area they dropped 7.3 percent to $1,036.
Falling rents is great for renters, but it means falling apartment values, more losses for lenders and CMBS investors, more pressure on home prices, and possibly a declining CPI (rent is the largest component).
From the Mercury News: Santa Clara County apartment rents plunge
Apartment rents plunged 10 percent in Santa Clara County in the third quarter compared with a year earlier, the biggest decline in any metro area in the Western United States …
From the Las Vegas Sun: LV apartment rental rates decline in third quarter
RealFacts … said the average asking price for apartments in the Las Vegas area in the quarter was $837, down 2.1 percent from $855 in the second quarter and down 5.7 percent from $887 one year ago.
From Bloomberg: Apartment Rents Decline in U.S. West as Unemployment price Xenical Increases
Apartment rents declined throughout the U.S. West and South in the third quarter as rising unemployment made it harder for landlords to raise their rates.
The average asking rent fell to $965 from $1,002 a year earlier, said Novato, California-based RealFacts, which surveyed owners of more than 12,600 complexes. The occupancy rate dipped below 92 percent from almost 93 percent a year earlier.
…
In California’s Oxnard-Thousand Oaks-Ventura region, rents fell 7.4 percent to $1,429, and in the Seattle area they dropped 7.3 percent to $1,036.
Falling rents is great for renters, but it means falling apartment values, more losses for lenders and CMBS investors, more pressure on home prices, and possibly a declining CPI (rent is the largest component).
Oct 13, 2009 | No Comments | Sean Mills
Look alive all you people as we have new tenant/foreclosure laws thanks to our governor, Arnold.-Sean
New Legislation Signed
This information is for California tenants only. Governor Schwarzenegger signed two pieces (yes, two!) pieces of legislation benefiting California tenants. The first, SB 290 (sponsored by Mark Leno) makes the 60-days’ notice requirement for tenant evictions permanent. This [...]
Look alive all you people as we have new tenant/foreclosure laws thanks to our governor, Arnold.-Sean
This information is for California tenants only. Governor Schwarzenegger signed two pieces (yes, two!) pieces of legislation benefiting California tenants. The first, SB 290 (sponsored by Mark Leno) makes the 60-days’ notice requirement for tenant evictions permanent. This means that any tenant in the state who has lived in her rental for one year or more cannot be evicted with less than 60-days’ get prescription drugs without prescription notice in “no cause” evictions. And it means that tenant groups don’t have to mobilize every couple of years to renew the legislation. However, this does not affect tenants protected by local “just cause” ordinances; those tenants cannot be evicted without cause.
Source Article
The second bill, SB 120, sponsored by Alan Lowenthal, protects tenants in foreclosed or soon-to-be-foreclosed properties against utility shutoffs when the landlord or lender fails to pay utility bills. In particular, tenants in single-family homes now have the same protection as tenants in multi-family units. Utility companies (gas, electric, water, heat) are now required to give tenants notice that the utility is to be cut off for nonpayment, and to provide a procedure for the tenant or tenants to establish a payment account without having to pay the former landlord’s arrearages. Tenants in single-family homes in outlying communities were often forced to pay the former landlord’s water bill to keep the water on. (Sacramento Suburban Water was notorious for this.) No longer.
It also allows tenants who pay the bills, when these costs have been included in the rent, to either deduct the cost from their rent payments or sue the landlord for the cost of establishing service or paying the bills. And it prohibits utility companies from requiring large deposits if the tenant can show that she pays her rent on time. (Utility companies were frequently requiring both payment of the arrearages and a large deposit to keep utility service.) Utility services are required to establish and publicize procedures for tenants to deal with these situations; notice of those procedures should be delivered along with any shutoff notice. We would hope that they also publicize them in their newsletters and on their websites as well.
Oct 12, 2009 | No Comments | Sean Mills
Renting out homes has long been a profitable enterprise for many Valley landlords.
The business model was simple: Buy a home. Rent the home for at least the monthly mortgage payment. And when you decide to sell the home, enjoy the Valley’s reliable appreciation in home prices.
That model fell apart amid the housing-market crash. Landlords, like [...]
Renting out homes has long been a profitable enterprise for many Valley landlords.
The business model was simple: Buy a home. Rent the home for at least the monthly mortgage payment. And when you decide to sell the home, enjoy the Valley’s reliable appreciation in home prices.
That model fell apart amid the housing-market crash. Landlords, like everyone else, saw home values plunge. Rents fell. Many landlords who bought when prices were high now struggle to charge tenants enough to cover their mortgage payments. And this year, as foreclosures mounted, homes were snapped up by investors and turned into inexpensive rentals.
Suddenly, the landlord business has changed. Competition for tenants is increasing as more homes become rentals. Apartment owners are lowering rents, offering free utilities or a month’s free rent, eliminating security deposits and credit checks.
This is the third in a periodic Republic series on how different segments of the housing industry are reinventing themselves to work toward a recovery. The new reality for Valley landlords is still taking shape. Longtime landlords slammed by the housing crash find they have to settle for less income, take more risks on tenants’ reliability and try to keep their properties out of foreclosure. New landlords see opportunity in the low housing prices.
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Oct 9, 2009 | No Comments | Sean Mills
I was just reading a website the other day which was forwarded to me for a firm specializing in syndication of investment properties and the website had predictions made back in 2008. It stated, and I quote,
Reason #3
Smart investors will own cash-flowing rentals in 2008. Just as property prices soared over past 5 years, RENTS [...]
I was just reading a website the other day which was forwarded to me for a firm specializing in syndication of investment properties and the website had predictions made back in 2008. It stated, and I quote,
Reason #3
Smart investors will own cash-flowing rentals in 2008. Just as property prices soared over past 5 years, RENTS will be increasing over the next few years! In fact, on a recent Training Call, Mike explained that he expects rents to double or triple within the next 3-5 years! Now is the time to own income-producing properties. Due to the lack of affordable entry-level housing and other factors, home ownership is difficult for many at this time. This is putting a lot of renters back into prescription drugs without the market. With low purchase prices, and rising rents, cash flow has never been better. In fact, Mike Watson is currently finding sellers that are cash flowing even while charging below-market rents.
Take a look at the attached article and let me know if the syndicator was informed or just selling, you decide.-Sean
Even as the U.S. home ownership rate dips to a six-year low, landlords are having an increasingly difficult time finding tenants. The national apartment vacancy rate hit 7.8 percent in the third quarter, its highest level since 1986, according to a new report from real estate research firm Reis. Moreover, since vacancy rates increased even during this traditionally strong period, landlords should expect rental demand to erode even further from here, says Victor Calanog, a Reis research director. “If things were weak this time around, you can expect that during the colder months, things will be even weaker,” Calanog says. “We started monitoring this around 1980—we are going to break all-time highs.” Here are five things you need to know about the development:
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Oct 6, 2009 | No Comments | Sean Mills
No secret on this one if you have been to Las Vegas in the past year. -Sean
Budget-minded apartment tenants may be willing to sacrifice features such as walk-in closets and hardwood floors for cheaper rent, but they still want swimming pools, fitness centers and barbecue pits that make staying home more enjoyable.
Paid utilities and washers [...]
No secret on this one if you have been to Las Vegas in the past year. -Sean
Budget-minded apartment tenants may be willing to sacrifice features such as walk-in closets and hardwood floors for cheaper rent, but they still want swimming pools, fitness centers and barbecue pits that make staying home more enjoyable.
Paid utilities and washers and dryers in units topped the amenities list for renters from February to August on ApartmentGuide.com’s site.
Although amenities are important, renters consider multiple factors before choosing an apartment. More than 35 percent of respondents to a survey by Apartments.com said location and neighborhood have the biggest impact on their decision to pick one apartment over another if rent is not an issue, followed by 19 percent who said the size of the apartment matters most.
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