is that the apartment portion of commercial real estate is still in a valuation bubble. There are too many of them that somebody paid too much to buy or build, especially in large complexes. There are also too many vacant single-family homes.
AND, we have an increasing wave of real homelessness plus a wave of younger people moving in together in larger groups (or with Mom/Dad, etc.) as an alternative to being otherwise unable to afford anything but homelessness.
And we say the Reagan/Bush tax cuts and the Greenspan/Bernanke low interest rates were "good" for the economy these last few decades? No, they actually CAUSED the scenarios of the first two paragraphs to occur. They also CAUSED jobs to move out of America. Why does the average "Joe" not understand this?
Muser
of NM
@
Oct 13, 2009 11:36:32 AM
"Greedy" Landlords
I can't speak for all landlords but I bet I speak for a large percentage. Thinking ahead and not wanting to be old and destitute and dependent on others for our well-being, we started saving and investing in our early 30's. Looking around it seemed that real estate would be a good long-term investment so we eventually bought our first investment property and years later another and years after that another and so on. For all of these we had to come out of pocket every month to keep the properties because rents didn't cover the mortgage, interest, taxes, insurance, vacancy, repairs, vandalism, evictions, etc. Basically, we lived on the edge for decades because we were subsidizing our tenants' lifestyle. We stuck our necks out and signed on the bottom line to buy the house at a payment higher than the tenants we willing to pay. We took the risk for an uncertain outcome. Often our tenants had more "toys" than we did. We had no luxuries, no vacations, no dining out, no lavish gift giving, no latest-greatest toys, no expensive wines, NO YACHTS...just living below our very humble means and working towards our vision of future security and independence. We were willing to risk a few hundred dollars a month for our future rather than buying Nikes for our kids and big-screen TVs. Our gamble was that values would someday go up. Sometimes they did. Sometimes they didn't. Hardly a fun road to travel but one we chose to follow. We were a happy family. No divorce. No major problems for the kids. Oddly, it seems the most unhappy people are the middle to low income people who have all the toys and possessions. Go figure? Fortunately, we won more than we lost. Although now, after 25 years of building and getting close to that "dream", we stand to lose much of what we saved because the rules and strategies have rapidly and radically changed. Oh well. We'll just have to adjust to the new rules and develop new strategies. Why? Because freedom is more important to us than dependency. And, the spice of life comes from seeing what we can do with our natural talents (or lack of). Freedom has been our goal. Money has been the by-product of effort and risk-taking. Real estate just happened to be our vehicle. I don't think that makes us "bad" or "greedy". The bad and greedy people are those who feel they are entitled, whether they be rich or poor. Hard-working people who want little from others are rarely the culprits.
Typical Landlord
of CA
@
Oct 12, 2009 13:19:11 PM
Low housing costs = Real stimulus
I live in hawaii where you need 2 or 3 jobs to pay rent. There is a heart-breaking epidemic of homelessness being created on a daily basis across America. And i would guess most of us are in line to be homeless if we lost our jobs. In good times we are only 2 weeks away from being homeless >> we the 80% of the USA who make under $50,000 a year.
Giving LANDLORDS about 50% of my income is money that in no way helps our economy. LANDLORD money is mailbox-money, not REAL work. It just sits there and is not recirculated through society as shopping, etc.
If my RENT was cut in half i would have hundreds of dollars a month to spend (stimulus to businesses) or save (preventing myself from ever being a burden)...
We've bent over backwards to BAILOUT the wealthy elite who created the problem in the first place, & now it's time for US to get a bailout:
"Rent cut in half for renters & mortgage payments cut in half for new live-in homeowners." The landlords Yacht can wait, bro.
That's millions of dollars freed up that would be spent on everything from milk to walmart to farmers markets to applebee's.
That's what America forgot... basic economics: During a Recession you lower taxes and cut spending so people can SPEND and thereby reenergize the economy. Lowering crap we have to pay for = money flowing around. Ya dig?!
The landlords who doubled and tripled rent in Hawaii over the past 7 years need to wake up and stop being so greedy. Either that or they can foot the bill for the increased welfare use and homelessness their greed has created.
http://www.youtube.com/peakoilprepare
TC
of HI
@
Oct 11, 2009 20:51:11 PM
US Population Decline
You have to realize that if it weren't for immigration, the US population would be declining. And as of 2006 immigration has ground to a halt. My anecdotal evidence suggests it may have reversed as conditions in Mexico and elsewhere have improved. We may end up being a nation of 270,000,000 instead of 300 million plus! And this after the biggest housing boom in history...leaving us with a gargantuan surplus of rentals + houses.
Who would complain? The majority of us "rent" our homes either as mortgage holders from the bank or as explicit tenants. Low rents mean that we don't have to work as hard...that losing a job doesn't mean eviction as low rents make it easier for savings to cover periods of unemployment.
During the 40s, 50s and 60s, rents were relatively low and simple jobs could fund a family. Why not welcome a return to those days?
Kentian
of WA
@
Oct 11, 2009 12:57:57 PM
So many "FOR RENT" signs
Driving by one neighborhood lately in Alhambra, CA, I saw at lease ten "FOR RENT" signs in a few blocks.
The situation seems pretty dire for the owners.
Nevertheless, One front house (2bed 1bath) in South Pasadena, CA, less then 2 miles away, was snapped quickly when it hit the market. The reason: the owner only asked for $850/month, way below the normal price!
jw
of CA
@
Oct 10, 2009 21:06:07 PM
Tax credit hurting apartments and investors buying houses
For every well intended government action there is a reaction and the first time homebuyer credit is moving more people from renters to owners. Many of these people are still in their rental but many will be moving out in November and December after the rush of closings on tax credit house purchases. The real problem we have is too many living units. Time is the healer and encouraging more houses to be built through government stimulus will only extend the pain.
Keep in mind that in the bad states over 30% of home purchases this last year have been investors. What are these investors trying to do, a few are already trying to flip them and the others are looking for renters. Rents are declining for apartments but at even a faster clip for houses. The buyer tax credit has the risk of pushing the investor owned housing back onto the market.
The tax credit needs to fade away--it will cause the pain to continue and could, after some delay push housing back into decline.
Muser of NM @ Oct 13, 2009 11:36:32 AM
Typical Landlord of CA @ Oct 12, 2009 13:19:11 PM
TC of HI @ Oct 11, 2009 20:51:11 PM
Kentian of WA @ Oct 11, 2009 12:57:57 PM
jw of CA @ Oct 10, 2009 21:06:07 PM
Alex Sinclair of CA @ Oct 09, 2009 09:09:04 AM
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