14 ms·

Asking rents in San Francisco continue to slip, but…

75 points by elsewhen 5y ago

riazrizvi 5y ago
The systemic problem is that investors are buying up residential property inventory, because there is a massive amount of near 0% cash available to a thin slice of the population. So even though there are as many people as there were roughly a year ago, there are far fewer homes. Hence purchase prices are rocketing up and rental prices are drifting down. There is no strong political will to solve this problem, because there are almost the same number of non-homeowner voters as there are homeowner voters. It’s painful for one side because they (we) are being priced out of the property market, and great for the other side who is making a fortune. Only of interest rates jumped up, or legislation was made to financially penalize capital gains on second and third homes or on residential property funds will home prices return to normal.
- gbronner 5y ago
  Sf rent control increases are 60% of cpi. If you expect higher inflation and higher taxes, might as well buy apartments and take them for personal use
- jjtheblunt 5y ago
  >Hence purchase prices are rocketing up and rental prices are drifting down. Shouldn't the decrease in homes to purchase increase the demand for rentals?
  - senkora 5y ago
    If second homes are being rented, then the supply of rentals will also increase.
    - 8note 5y ago
      That depends on who's renting them? If it's a business, they will leave it empty rather than lowering the rent
  - PragmaticPulp 5y ago
    I read it as the homes were being purchased by landlords, increasing the supply of rentals
  - treeman79 5y ago
    Don’t forget mega rental companies. They but thousands of homes, then rent them out. All with minimal possible repairs and no regards to safety.
- Camillo 5y ago
  Is it better to buy a home for investment than it is to buy stocks?
  - tenpies 5y ago
    Depends on geography. For example, in Canada, housing is up 30% YoY. Trudeau's Federal government recently said that even a 10% correction in housing would be unacceptable. In practice, Canadian housing isn't housing - it's a 30% (or better) government bond that you get to live in or rent out. That's a 30% return guaranteed by a sovereign state that will gladly destroy everything else in the country to prop up housing. There is no investment like it anywhere else in the world, which is why Canada is seeing the largest real estate bubble in the world. The best part? You can sell your principle residence completely tax free. Not a penny in tax paid from capital appreciation.
    - SadCanadian 5y ago
      I live here in Toronto and it’s an absolute dumpster fire. The country is increasingly becoming hollowed out and residential investments are increasing as a % of total investments. In addition, there is no plan for prosperity. GDP per capita has been stagnant or negative and the productivity numbers are weak. The housing sector is becoming a giant leech sucking the life of out of productive investment. Engineers have quit to become real estate agents and try their hand at selling to foreigners or over-leveraged locals. Very little hope here from the eyes of a local. Maybe you can study software to get out and go to an American city. America remains relatively industrious. Canada is just becoming a high tax version of Monaco (doesn’t even make sense but still).
      - jcims 5y ago
        I live about four hours due south of you and loved visiting Toronto as a kid. I had seen similar commentary recently about the real-estate market and thought folks were exaggerating. From what I could see, they weren't. Just now I was going to make a joke about the long game being in Nunavut but checked my work first and, uhh, nope. That's some crazy shit. $600k for a (nice) 5br on a half acre in the tundra? No thanks. I know we look funny from up there but we do love y'all. My sister-in-law is from Guelph and lives in Ohio, we just accidentally bought matching F150's. So feel free to come down any time. The politics suck but the people are fine.
- bcrosby95 5y ago
  It's less of a problem because you can opt out of buying a home by renting. This is what happened back in the 00s and I know a lot of people that rented to opt out of the purchase market. Speaking personally, I rented a 3 bedroom home in Los Gatos for $2k/month, which was "valued" at around $1 million. The difference this time is its on top of huge increases in home prices and rents. So I think you wouldn't see that large of a correction after this particular run-up, because before it both rent and purchase prices were already extremely high. Ultimately I see it as only a minor problem on top of the huge problem of the basic affordability of shelter.
  - mateo411 5y ago
    The article says that rents in SF are down. Housing prices are up. Anecdotally, almost everybody that I know that rents in the City has moved, because they were able to get a better deal.
    - deleted 5y ago
      [deleted]
    - swimfar 5y ago
      I don't know about SF, but in the South Bay, house prices may be up, but condo prices are the lowest they've been in years. And that is despite record low interest rates.
      - mateo411 5y ago
        Yes, I'm pretty sure that's true in SF too. It's a great time to buy a condo in the Bay Area.
      - jacobolus 5y ago
        This is a pandemic-specific phenomenon. I would expect it to return toward the previous price relationship over the next few years.
  - thanhhaimai 5y ago
    I'm paying $2500/month mortgage for a home valued at $1.1m. For the extra $500/month, I get: mortgage interest tax deduction, a house after 30 years, the freedom to modify my home the way I like, the security of knowing I'm not at the mercy of the landlord. Personally, I think for the extra $500/month, buying is a better choice than renting; at least for me.
- cheriot 5y ago
  > The systemic problem is that investors are buying up residential property inventory Are you assuming that it's somehow sensible to buy property and leave it empty? Owner vs rental doesn't change the number of homes available.
  - mikeklaas 5y ago
    It's sensible in San Francisco because having an active renter makes a property worth significantly less. Why? You basically cannot kick evict a renter or raise their rent.
    - htormey 5y ago
      Doesn’t that depend on the age of the building? I thought rent control was 1970s and earlier? That being said, SF is generally very tenant/sub tenant friendly in its laws.
      - enahs-sf 5y ago
        Even still, landlords fear legal repercussions so much that they're willing to let a lot slide. When I moved out of my SF apartment, a plant I had had damaged the floor and my landlord was willing to eat the cost provided we moved out swiftly. Replacing the floors probably set him back a couple grand, but evicting tenants could be far more expensive.
        xenihn 5y ago
        From what I've seen of SF rentals and landlords, that's potentially the most money he had spent on maintenance & renovations in a decade, while collecting some of the most profitable rent in the country.
        closeparen 5y ago
        With a price to rent ratio of 53, San Francisco has the least profitable rent in the country. https://smartasset.com/mortgage/price-to-rent-ratio-50-largest-cities-2020 https://smartasset.com/mortgage/price-to-rent-ratio-50-large...
- d3ntb3ev1l 5y ago
  Long term rentals will cease to exist when all this free money purchases convert directly to fuckin Airbnb’s
- rodgerd 5y ago
  > The systemic problem is that investors are buying up residential property inventory, because there is a massive amount of near 0% cash available to a thin slice of the population. This is absolutely a global problem: New Zealand, Australia, parts of Canada, the UK, are all having the same issues.
  - barry-cotter 5y ago
    Japan doesn’t have this problem because they build housing sufficient to meet demand. Deciding not to build enough housing to meet demand so property owners make money: It’s the Anglo way.
    - xenihn 5y ago
      Japan also doesn't have the problem of huge pension funds being able to influence and control housing markets in major metros. They don't exist because there isn't a need for them.
    - dukeyukey 5y ago
      Not just Anglos: Sweden, the Netherlands, France, Hong Kong, all have at least pockets of insane property prices.
    - flukus 5y ago
      Japan had this problem 30 years ago and had banks giving out multi-generational loans: https://money.cnn.com/magazines/fortune/fortune_archive/1990/05/21/73567/ https://money.cnn.com/magazines/fortune/fortune_archive/1990...
    - chii 5y ago
      > build housing sufficient to meet demand they also accept that in dense Tokyo metro areas, the sizes of places are tiny. I dont think the Anglo way works - you cannot have both dense, but big apartments.
      - esyir 5y ago
        Sure you can. The issues with the Anglo way is that they've gone all the way to the other end with flat, wide buildings. Increasing verticality is a simple way to get more density without sacrificing area. At some point, yes, you'll just have to shrink down to get further density, but the low hanging fruit haven't been picked yet.
- xenihn 5y ago
  Note that "investors" in this case also includes massive pension funds. This isn't the type of entity that most people have in mind, but it's one of the most pervasive in California, especially in San Francisco. I think the average person thinks of individual investors (flippers, rich foreign buyers) when they hear "investors". Some of the buyers belong to this group, but most don't.
  - clpm4j 5y ago
    Yes. See the Blackstone Group and its related investments in US residential housing. They reportedly made around $7 billion recently through one of their single-family and multifamily housing investment vehicles, which owns > 80,000 homes. Lots of other investment firms doing the same thing across the country. https://www.housingwire.com/articles/blackstone-gets-back-into-the-single-family-rental-game/ https://www.housingwire.com/articles/blackstone-gets-back-in...
    - jhallenworld 5y ago
      I've been looking at REITs recently- "BREIT" is interesting in that it's not traded. According to them, the return rate is 10%, which is really good.. I don't understand how they are making this much off of rent in San Francisco. The price to rent ratio there is like 50:1, which implies a return of 2%. Perhaps their properties are charging much higher then average rents.. Detroit is the opposite extreme: the price to rent ratio is 5:1 (of course this ignores that the property is likely in terrible shape and the vacancy rate is high). So here is why I have been looking at this: how do the rich maintain their wealth during inflationary periods? Own hard assets that pay rent! Also the relatively stable return you can get from rent indicates how much money you need to retire. Suppose you want $100K a year during retirement. Well with 10% returns, you only need $1M.
  - riazrizvi 5y ago
    Yes the funds are the worst IMO, they do the most damage to the stability of the market and they have the most political power because their $$$’s are concentrated.
- csomar 5y ago
  Assuming the inflation rates are accurate (low inflation), these guys are getting into a risky proposition with a 1.5% discount (property tax still have to be paid out). I would not call it "free" money. These guys might not be as smart or lucky as they seem to be.
  - nostrademons 5y ago
    It's a bet on the inflation rates not being accurate, or at least not staying at "low inflation" levels. Personally I would take their side of the bet. I think that inflation rates are going to be extremely high over the next decade, exceeding the 1970s and potentially flirting with hyperinflation, and that folks who are betting on status-quo inflation are about to get screwed the same way folks who didn't see globalization coming in the 90s or Millenials who bought the "study whatever you want and the money will come" line got screwed. But that's why we have financial markets, so each firm can bet on the version of the future they think is most likely, and ultimately one side makes a lot of money and the other goes bankrupt.
    - imtringued 5y ago
      I would like to see the collapse that you guys are seeing, I'll repeat this over and over again, the economic strength of the US is exceeding what should be possible under current economic conditions. For the last two decades the Fed was trying to "beat up" the US economy to "teach it a lesson" but it never even bothered to wake up as financial nukes were being detonated instead of using an alarm clock. Now we have Godzilla (corona virus) and the US economy is barely responding after it has been bombarded with stimulus checks. Lots of things were done to "intentionally destroy" the US economy. The only way the US economy can fail from hyperinflation at this point is by physically destroying it and causing the production capacity of the US to go down, which means the US won't be able to meet foreign obligations denominated in foreign currencies. The reason why I put the Feds actions in quotes is that its mission is not to destroy the economy, merely kick it out of bed.
    - dcolkitt 5y ago
      I’m not saying that hyperinflation can’t happen. But if you really believe in that hypothesis, you’d do much better to buy deep OTM call options on TIPs and gold instead of real estate.
- thatfrenchguy 5y ago
  Nah, in San Francisco, you have to be a landlord three decades ago to be able to do this, you can't break even on a rental building or condo today.
  - rasz 5y ago
    Why rent at all, you buy properties to safely park your cash.
hackeraccount 5y ago
That relationship - when purchase prices go up rents go down and vice versa has always seemed odd to me. When you think about it, it makes sense but you'd think most people wouldn't have the flexibility to move between renting and owning.
- wombat-man 5y ago
  yeah it probably won't swing back as fast if rates go back up. A lot of us who were waiting around for a reason to buy suddenly got a reason to make a move. Anyone who bought a place is probably not going back to renting soon/ever.
- rossdavidh 5y ago
  Mostly I agree with you but you might, if owning, choose to rent out your existing place and move somewhere cheaper? Also, here in Austin, TX I know people who rent, who own properties that they rent out to others. It seems odd to me.
  - pessimizer 5y ago
    You rent places in order to live in them. Owning property is always investment (if you're rational, and real estate middlemen will encourage you not to be.) Owning your own place, if not for the massive state subsidy, is basically renting from yourself for the price you would have paid someone else + maintenance. Austin is a great example of a place where you may have bought a house in a really cool neighborhood, which 20 years later is in the middle of a shit yuppie neighborhood. You can rent that house to the shit yuppie who will be happiest there (and is loaded and willing to pay a premium) and rent in a cool neighborhood, especially if rents are low. You might not have to work at all.
- PragmaticPulp 5y ago
  Investors buy properties and rent them out when they have access to cheap loans. This increases demand on house purchases, but increases supply of rentals. Home prices go up, rental prices go down.
- 5y ago
tadeegan 5y ago
Ive noticed that the rentals on the market, while cheaper are generally lower quality. It seems to me that many landlords are opting for airbnb, where you can find 1 fully furnished 1 bedrooms for 2k$ a month rather than lock in a rent controlled tenant at the current prices.
- xur17 5y ago
  I've noticed this as well - for house rentals in my area, the size seems to scale with price, and there doesn't seem to be anyway to scale up quality (there are some exceptions to this, but it's mostly true).
hardtke 5y ago
I'd be really curious to know how San Francisco rental prices are diverging between newer (not rent controlled) buildings and older (rent controlled) buildings. There is historically not as much turnover in the rent controlled buildings, and people pay a premium price at the time of move in because they get protection from rent increases. I would guess that rent controlled unit prices did not slip that much because people realize that San Francisco will be a great place to live at some point in the future. These rental surveys are heavily biased towards larger, newer apartment buildings.
- staticautomatic 5y ago
  I’ve been apartment hunting in the city for a few months and I’m not sure they are diverging at all. Rent controlled units are way down in price but a lot of the inventory is shit that people are moving out of for nicer places in better locations.
batata004ygg 5y ago
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batata004ygg 5y ago
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75 points by elsewhen 5y ago

The systemic problem is that investors are buying up residential property inventory, because there is a massive amount of near 0% cash available to a thin slice of the population. So even though there are as many people as there were roughly a year ago, there are far fewer homes. Hence purchase prices are rocketing up and rental prices are drifting down. There is no strong political will to solve this problem, because there are almost the same number of non-homeowner voters as there are homeowner voters. It’s painful for one side because they (we) are being priced out of the property market, and great for the other side who is making a fortune. Only of interest rates jumped up, or legislation was made to financially penalize capital gains on second and third homes or on residential property funds will home prices return to normal.

gbronner 5y ago
Sf rent control increases are 60% of cpi. If you expect higher inflation and higher taxes, might as well buy apartments and take them for personal use
jjtheblunt 5y ago
>Hence purchase prices are rocketing up and rental prices are drifting down. Shouldn't the decrease in homes to purchase increase the demand for rentals?
- senkora 5y ago
  If second homes are being rented, then the supply of rentals will also increase.
  - 8note 5y ago
    That depends on who's renting them? If it's a business, they will leave it empty rather than lowering the rent
- PragmaticPulp 5y ago
  I read it as the homes were being purchased by landlords, increasing the supply of rentals
- treeman79 5y ago
  Don’t forget mega rental companies. They but thousands of homes, then rent them out. All with minimal possible repairs and no regards to safety.
Camillo 5y ago
Is it better to buy a home for investment than it is to buy stocks?
- tenpies 5y ago
  Depends on geography. For example, in Canada, housing is up 30% YoY. Trudeau's Federal government recently said that even a 10% correction in housing would be unacceptable. In practice, Canadian housing isn't housing - it's a 30% (or better) government bond that you get to live in or rent out. That's a 30% return guaranteed by a sovereign state that will gladly destroy everything else in the country to prop up housing. There is no investment like it anywhere else in the world, which is why Canada is seeing the largest real estate bubble in the world. The best part? You can sell your principle residence completely tax free. Not a penny in tax paid from capital appreciation.
  - SadCanadian 5y ago
    I live here in Toronto and it’s an absolute dumpster fire. The country is increasingly becoming hollowed out and residential investments are increasing as a % of total investments. In addition, there is no plan for prosperity. GDP per capita has been stagnant or negative and the productivity numbers are weak. The housing sector is becoming a giant leech sucking the life of out of productive investment. Engineers have quit to become real estate agents and try their hand at selling to foreigners or over-leveraged locals. Very little hope here from the eyes of a local. Maybe you can study software to get out and go to an American city. America remains relatively industrious. Canada is just becoming a high tax version of Monaco (doesn’t even make sense but still).
    - jcims 5y ago
      I live about four hours due south of you and loved visiting Toronto as a kid. I had seen similar commentary recently about the real-estate market and thought folks were exaggerating. From what I could see, they weren't. Just now I was going to make a joke about the long game being in Nunavut but checked my work first and, uhh, nope. That's some crazy shit. $600k for a (nice) 5br on a half acre in the tundra? No thanks. I know we look funny from up there but we do love y'all. My sister-in-law is from Guelph and lives in Ohio, we just accidentally bought matching F150's. So feel free to come down any time. The politics suck but the people are fine.
bcrosby95 5y ago
It's less of a problem because you can opt out of buying a home by renting. This is what happened back in the 00s and I know a lot of people that rented to opt out of the purchase market. Speaking personally, I rented a 3 bedroom home in Los Gatos for $2k/month, which was "valued" at around $1 million. The difference this time is its on top of huge increases in home prices and rents. So I think you wouldn't see that large of a correction after this particular run-up, because before it both rent and purchase prices were already extremely high. Ultimately I see it as only a minor problem on top of the huge problem of the basic affordability of shelter.
- mateo411 5y ago
  The article says that rents in SF are down. Housing prices are up. Anecdotally, almost everybody that I know that rents in the City has moved, because they were able to get a better deal.
  - deleted 5y ago
    [deleted]
  - swimfar 5y ago
    I don't know about SF, but in the South Bay, house prices may be up, but condo prices are the lowest they've been in years. And that is despite record low interest rates.
    - mateo411 5y ago
      Yes, I'm pretty sure that's true in SF too. It's a great time to buy a condo in the Bay Area.
    - jacobolus 5y ago
      This is a pandemic-specific phenomenon. I would expect it to return toward the previous price relationship over the next few years.
- thanhhaimai 5y ago
  I'm paying $2500/month mortgage for a home valued at $1.1m. For the extra $500/month, I get: mortgage interest tax deduction, a house after 30 years, the freedom to modify my home the way I like, the security of knowing I'm not at the mercy of the landlord. Personally, I think for the extra $500/month, buying is a better choice than renting; at least for me.
cheriot 5y ago
> The systemic problem is that investors are buying up residential property inventory Are you assuming that it's somehow sensible to buy property and leave it empty? Owner vs rental doesn't change the number of homes available.
- mikeklaas 5y ago
  It's sensible in San Francisco because having an active renter makes a property worth significantly less. Why? You basically cannot kick evict a renter or raise their rent.
  - htormey 5y ago
    Doesn’t that depend on the age of the building? I thought rent control was 1970s and earlier? That being said, SF is generally very tenant/sub tenant friendly in its laws.
    - enahs-sf 5y ago
      Even still, landlords fear legal repercussions so much that they're willing to let a lot slide. When I moved out of my SF apartment, a plant I had had damaged the floor and my landlord was willing to eat the cost provided we moved out swiftly. Replacing the floors probably set him back a couple grand, but evicting tenants could be far more expensive.
      - xenihn 5y ago
        From what I've seen of SF rentals and landlords, that's potentially the most money he had spent on maintenance & renovations in a decade, while collecting some of the most profitable rent in the country.
        closeparen 5y ago
        With a price to rent ratio of 53, San Francisco has the least profitable rent in the country. https://smartasset.com/mortgage/price-to-rent-ratio-50-largest-cities-2020 https://smartasset.com/mortgage/price-to-rent-ratio-50-large...
d3ntb3ev1l 5y ago
Long term rentals will cease to exist when all this free money purchases convert directly to fuckin Airbnb’s
rodgerd 5y ago
> The systemic problem is that investors are buying up residential property inventory, because there is a massive amount of near 0% cash available to a thin slice of the population. This is absolutely a global problem: New Zealand, Australia, parts of Canada, the UK, are all having the same issues.
- barry-cotter 5y ago
  Japan doesn’t have this problem because they build housing sufficient to meet demand. Deciding not to build enough housing to meet demand so property owners make money: It’s the Anglo way.
  - xenihn 5y ago
    Japan also doesn't have the problem of huge pension funds being able to influence and control housing markets in major metros. They don't exist because there isn't a need for them.
  - dukeyukey 5y ago
    Not just Anglos: Sweden, the Netherlands, France, Hong Kong, all have at least pockets of insane property prices.
  - flukus 5y ago
    Japan had this problem 30 years ago and had banks giving out multi-generational loans: https://money.cnn.com/magazines/fortune/fortune_archive/1990/05/21/73567/ https://money.cnn.com/magazines/fortune/fortune_archive/1990...
  - chii 5y ago
    > build housing sufficient to meet demand they also accept that in dense Tokyo metro areas, the sizes of places are tiny. I dont think the Anglo way works - you cannot have both dense, but big apartments.
    - esyir 5y ago
      Sure you can. The issues with the Anglo way is that they've gone all the way to the other end with flat, wide buildings. Increasing verticality is a simple way to get more density without sacrificing area. At some point, yes, you'll just have to shrink down to get further density, but the low hanging fruit haven't been picked yet.
xenihn 5y ago
Note that "investors" in this case also includes massive pension funds. This isn't the type of entity that most people have in mind, but it's one of the most pervasive in California, especially in San Francisco. I think the average person thinks of individual investors (flippers, rich foreign buyers) when they hear "investors". Some of the buyers belong to this group, but most don't.
- clpm4j 5y ago
  Yes. See the Blackstone Group and its related investments in US residential housing. They reportedly made around $7 billion recently through one of their single-family and multifamily housing investment vehicles, which owns > 80,000 homes. Lots of other investment firms doing the same thing across the country. https://www.housingwire.com/articles/blackstone-gets-back-into-the-single-family-rental-game/ https://www.housingwire.com/articles/blackstone-gets-back-in...
  - jhallenworld 5y ago
    I've been looking at REITs recently- "BREIT" is interesting in that it's not traded. According to them, the return rate is 10%, which is really good.. I don't understand how they are making this much off of rent in San Francisco. The price to rent ratio there is like 50:1, which implies a return of 2%. Perhaps their properties are charging much higher then average rents.. Detroit is the opposite extreme: the price to rent ratio is 5:1 (of course this ignores that the property is likely in terrible shape and the vacancy rate is high). So here is why I have been looking at this: how do the rich maintain their wealth during inflationary periods? Own hard assets that pay rent! Also the relatively stable return you can get from rent indicates how much money you need to retire. Suppose you want $100K a year during retirement. Well with 10% returns, you only need $1M.
- riazrizvi 5y ago
  Yes the funds are the worst IMO, they do the most damage to the stability of the market and they have the most political power because their $$$’s are concentrated.
csomar 5y ago
Assuming the inflation rates are accurate (low inflation), these guys are getting into a risky proposition with a 1.5% discount (property tax still have to be paid out). I would not call it "free" money. These guys might not be as smart or lucky as they seem to be.
- nostrademons 5y ago
  It's a bet on the inflation rates not being accurate, or at least not staying at "low inflation" levels. Personally I would take their side of the bet. I think that inflation rates are going to be extremely high over the next decade, exceeding the 1970s and potentially flirting with hyperinflation, and that folks who are betting on status-quo inflation are about to get screwed the same way folks who didn't see globalization coming in the 90s or Millenials who bought the "study whatever you want and the money will come" line got screwed. But that's why we have financial markets, so each firm can bet on the version of the future they think is most likely, and ultimately one side makes a lot of money and the other goes bankrupt.
  - imtringued 5y ago
    I would like to see the collapse that you guys are seeing, I'll repeat this over and over again, the economic strength of the US is exceeding what should be possible under current economic conditions. For the last two decades the Fed was trying to "beat up" the US economy to "teach it a lesson" but it never even bothered to wake up as financial nukes were being detonated instead of using an alarm clock. Now we have Godzilla (corona virus) and the US economy is barely responding after it has been bombarded with stimulus checks. Lots of things were done to "intentionally destroy" the US economy. The only way the US economy can fail from hyperinflation at this point is by physically destroying it and causing the production capacity of the US to go down, which means the US won't be able to meet foreign obligations denominated in foreign currencies. The reason why I put the Feds actions in quotes is that its mission is not to destroy the economy, merely kick it out of bed.
  - dcolkitt 5y ago
    I’m not saying that hyperinflation can’t happen. But if you really believe in that hypothesis, you’d do much better to buy deep OTM call options on TIPs and gold instead of real estate.
thatfrenchguy 5y ago
Nah, in San Francisco, you have to be a landlord three decades ago to be able to do this, you can't break even on a rental building or condo today.
- rasz 5y ago
  Why rent at all, you buy properties to safely park your cash.

hackeraccount 5y ago

That relationship - when purchase prices go up rents go down and vice versa has always seemed odd to me. When you think about it, it makes sense but you'd think most people wouldn't have the flexibility to move between renting and owning.

wombat-man 5y ago
yeah it probably won't swing back as fast if rates go back up. A lot of us who were waiting around for a reason to buy suddenly got a reason to make a move. Anyone who bought a place is probably not going back to renting soon/ever.
rossdavidh 5y ago
Mostly I agree with you but you might, if owning, choose to rent out your existing place and move somewhere cheaper? Also, here in Austin, TX I know people who rent, who own properties that they rent out to others. It seems odd to me.
- pessimizer 5y ago
  You rent places in order to live in them. Owning property is always investment (if you're rational, and real estate middlemen will encourage you not to be.) Owning your own place, if not for the massive state subsidy, is basically renting from yourself for the price you would have paid someone else + maintenance. Austin is a great example of a place where you may have bought a house in a really cool neighborhood, which 20 years later is in the middle of a shit yuppie neighborhood. You can rent that house to the shit yuppie who will be happiest there (and is loaded and willing to pay a premium) and rent in a cool neighborhood, especially if rents are low. You might not have to work at all.
PragmaticPulp 5y ago
Investors buy properties and rent them out when they have access to cheap loans. This increases demand on house purchases, but increases supply of rentals. Home prices go up, rental prices go down.
5y ago

tadeegan 5y ago

Ive noticed that the rentals on the market, while cheaper are generally lower quality. It seems to me that many landlords are opting for airbnb, where you can find 1 fully furnished 1 bedrooms for 2k$ a month rather than lock in a rent controlled tenant at the current prices.

xur17 5y ago
I've noticed this as well - for house rentals in my area, the size seems to scale with price, and there doesn't seem to be anyway to scale up quality (there are some exceptions to this, but it's mostly true).

hardtke 5y ago

I'd be really curious to know how San Francisco rental prices are diverging between newer (not rent controlled) buildings and older (rent controlled) buildings. There is historically not as much turnover in the rent controlled buildings, and people pay a premium price at the time of move in because they get protection from rent increases. I would guess that rent controlled unit prices did not slip that much because people realize that San Francisco will be a great place to live at some point in the future. These rental surveys are heavily biased towards larger, newer apartment buildings.

staticautomatic 5y ago
I’ve been apartment hunting in the city for a few months and I’m not sure they are diverging at all. Rent controlled units are way down in price but a lot of the inventory is shit that people are moving out of for nicer places in better locations.

batata004ygg 5y ago

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batata004ygg 5y ago

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