Well its finally here. Many selling prices have dropped and rents are holding fairly strong. Sure % down is greater for non owner occupied properties and prices are falling with the bottom ? . It seems like an easier time to buy some rental properties and have the tenants pay all the expenses now. The falling price aspect is a little scary though.
My brother lives in Belgravia and his lease ended a short time ago. One flat was out of his budget at 5,000 GBP, but it is now priced at 3,000.
Interesting also how the cheaper properties have declined a much larger %. Been following rents on the lowest priced apartments and they haven't changed much. There are more on the mkt though and they are taking longer to rent.
I think the rents thing is a lagging indicator. People get locked into leases for 1 or 2 years. So if the distribution of leases signed in the months is uniform-discreet, you have the probability of lease renewal happening being 1/12th. If 1/12th of all leases get adjusted/rotated, only 1/12th of the renting population can make a change. If they're unemployed, they will have a very hard time finding another place to live. They may just renew or continue until their cash reserves are gone. I'm sure lease renewal dist is not uniform and probably more likely in the summer. So the question we have to ask is -- when will the majority of leases get moved/adjusted or defaulted upon. We have to wait for the majority of people's savings and credit to get exhausted, so we're looking at probably another 6 month time window in my opinion. My current strategy is to find a month to month or short-term lease, pay the higher amount, then exploit the market chaos in the summer.
Many garden apartment complexes seem to be unwilling to lower their asking rents on vacant apartments even though the amount of vacancies is increasing. Maybe the don't want existing tenants finding out that newly rented apartments are renting for less than they are paying thereby starting a snowball in dropping rents.
What I find ironic is that beleaguered real estate-that overlevareged sub-prime asset blamed for stock market crashes, bank failures and Obama-those sad home prices are almost buoyant compared to equities. In even the weakest markets-So Fla, Vegas, parts of California-home prices are all the way back to..... 2003 prices. Forget 1999. Hell some markets are hardly down at all. Here's a generic listing from Cardiff-By the Sea, Ca.- suburban "North County" San Diego. Prime area. This is for a small, unrehabbed, lower price end home. $850k. Scroll down the link and you'll see the sales history. (Edit: upgraded kitchen, ghetto bath) Dec 01, 2008 Price Changed $850,000 Feb 10, 2003 Sold $707,500 Nov 12, 1999 Sold $338,500 http://www.redfin.com/CA/Cardiff-By-The-Sea/1920-Park-Crst-92007/home/4141360 Not exactly the same chart as C, eh? This is a very difficult time to make assumptions. And it's a positively dangerous time to get lulled into conventional wisdom or sentiment. Yes wages are STILL STRONG. Week before last my maid fired me because I refused to bump her from $12.50 an hour-all cash. She really got paid even more because I'm a generous give her 50 extra here and there type guy. The next day my neighbors nanny quit-60yo Cuban woman-she was making $700 a week for pushing a kid around in a friggin' baby carriage and then chilling in front of a Plasma while he naps. The parents asked if she could do some light cleaning during the babies down time. She said c-ya. I'd like to apply. Au Pair Pabst.....
Here's a few more. http://www.redfin.com/CA/Cardiff-By-The-Sea/1294-Windsor-92007/home/4136859 Aug 29, 2008 Price Changed $739,000 Aug 06, 2008 Listed $745,000 Nov 30, 2004 Sold $825,000 Jun 17, 2004 Sold $700,000 Jun 04, 1998 Sold $245,000 http://www.redfin.com/CA/Encinitas/1393-Ranch-Rd-92024/home/6456866 Oct 22, 2008 Listed $929,900 Aug 02, 2005 Sold $1,020,000 Apr 19, 2001 Sold $548,000 In L.A. the same story. http://www.redfin.com/CA/Sherman-Oaks/3630-Weslin-Ave-91423/home/5262612 Sep 23, 2008 Listed $975,000 -- SoCalMLS #F1784067 Jul 31, 1996 Sold $306,500 Does anyone doubt this place will sell for 900k? Cherry view/pool. But still 3x from twelve years ago. Real estate crash? not quite....
They aren't taking them on tours of the NYSE,lol. Chinese tour groups go house-hunting in U.S. http://www.latimes.com/news/local/la-fi-chinahomes7-2008dec07,0,7107830.story?track=rss
It looks like this Real Estate mkt is real regional. I guess the job mkt in that area of Ca. must be good. Check out the graphs of home prices in these towns in Ohio. Whats going on in Ohio! http://www.city-data.com/city/Stow-Ohio.html http://www.city-data.com/city/Rittman-Ohio.html http://www.city-data.com/city/Cleveland-Ohio.html http://www.city-data.com/city/Lorain-Ohio.html http://www.city-data.com/city/Hamilton-Ohio.html http://www.city-data.com/city/Groesbeck-Ohio.html