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

To: XoFruitCake who wrote (63493)	10/8/2006 2:00:02 AM
From: Elroy Jetson	Read Replies (2) \| Respond to of 306849

I had a real estate law professor at U.C. Berkeley, Marvin Starr, who was also a partner in Miller, Starr and Regalia - probably the top real estate firm in California. He told us that none of us were old enough to remember this, but there was a time in California when rents on investment real estate were actually able to pay for the property tax and mortgage payments. And this was around 1975! .

To: XoFruitCake who wrote (63493)	10/8/2006 11:11:32 AM
From: Lizzie Tudor	Respond to of 306849

totally agree with you. The only thing that I think could, repeat could change the picture in favor of buying in Northern CA is a return to the tech stock market. Many tech stocks are now trading with single digit PEs typical of a bear market. If that changes there is a lot of new money. But I am certainly not counting on that soon. And I would not be looking for a bubble just a return to the kind of valuations we had in the 80s for example.

To: XoFruitCake who wrote (63493)	12/24/2006 1:09:17 PM
From: Wyätt Gwyön	Read Replies (1) \| Respond to of 306849

re: rental vs. buying True the number never work in California. But you can always count on appreciation to bail the home owner out in the past. the numbers may not have "worked", but there are degrees of nonworking. i am trying to figure out the average rental ratio in the bay area. it sounds like 1mm house rents for 2000-2500. take the midpoint, 2250, and that is a 2.7% return. even by Clownifornia standards that is ridiculous. maybe the Bay Area average is more like 6-8%. if so, then the 1mm house has to fall to 415K rents have to rise, or some combination of the two. maybe the avg is 5%, in which case you still need the 1mm house to fall to 540K. btw, when i bought my first house in Austin this ratio was 14%, and i doubt i caught the bottom tick. i think the bottom was probably closer to 20%.