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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Wyätt Gwyön who wrote (6070)	10/17/2002 3:14:43 PM
From: MulhollandDrive	Read Replies (1) \| Respond to of 306849

>>what would the approximate sale value of that house be? i found in Honolulu there were rentals in that price range which would have a sale value of approx 530K--that is for a condo, on which the landlord must pay $500/month or so maintenance fee.<< hi mm.. i've done rent vs. buy calculations for my son in la several times over the past 6 months and the bottom line has always been "rent"...when considering his particular variables....and despite relatively high income.

To: Wyätt Gwyön who wrote (6070)	10/17/2002 3:22:13 PM
From: Lizzie Tudor	Read Replies (4) \| Respond to of 306849

i don't see how high housing prices can be attractive to prospective landlords, as there's only so much the market will bear on rental prices. I've actually lived and rented in both Austin and SF (only owned in SF though). 2 very different markets from what I can recall, of course things have changed dramatically for SF in the last few years. The house I am renting in Noe Valley (which btw was the dot commers residential 'burb of choice in SF so it got inflated and deflated to the extreme)... I bought for $1.1mm in bubble stock money in early 2000. I paid 80K over asking price and the house was a mess- I put new windows and other things in and 2 mos later rented it easily for $3550. with a waiting list of 4 tenants. There were 3 working people living in the house, thats how they cover these high rents. Anyway that group moved out in mid-2001, if they didn't move I was considering dropping the rent by $1K because I knew things were collapsing up there. I decided to make some repairs and paint, by the time this was done (2002) when I put it back on the mkt 2100 was about right. If I had to sell the house today? Maybe 750-800K, and this is after about 80K of upgrades. California has a property tax law that is condusive to holding your house forever. (property taxes are only increased 1.5%/year no matter how much the house appreciates), therefore there are hundreds of long time owners who choose to keep their homes that they no longer live in and rent them. That is the real reason rents are so much lower than mortgages here, imo. The rental rates represent true value, its the home prices that are inflated imo.