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Seattle Bubble Forum Archive • View topic - red flag for crashing market: rising rents

red flag for crashing market: rising rents

Myth propagated by bitter ignorant renters, or statistical reality ignored by real estate professionals?

Moderators: synthetik, The Tim, Lake Hills Renter

Re: red flag for crashing market: rising rents

Postby Charles Dean » Tue Sep 23, 2008 7:36 am

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Re: red flag for crashing market: rising rents

Postby sniglet » Tue Sep 23, 2008 7:57 am

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Re: red flag for crashing market: rising rents

Postby Markor » Thu Sep 25, 2008 10:13 pm

I suspect you're right Sniglet. I don't fully grasp the sum of events/consequences that lead to it, but the articles I read about Japan's deflation show that the US is following in their footsteps so far.

The dollar's value should fall, putting upward pressure on the price of imports, which is most of the stuff in the stores. It seems that for deflation to occur on imports, either demand would have to contract enough for downward pressure to overwhelm the upward pressure (assuming there's still profit to be had), or the US would have to take the world down with it (so the dollar doesn't fall too far).

Peter Schiff predicted that the price of a new Toyota would soar, whereas the price of a used Toyota would plummet (maybe not the Prius though).
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Re: red flag for crashing market: rising rents

Postby rose-colored-coolaid » Fri Sep 26, 2008 6:29 am

That's a tough comparison (Japan 1990 to USA 2008). The USA economy is much larger than Japan's was (percentage WDP (world domestic product)). It's entirely possible that our failure would more negatively impact the global economy than Japan's did. Meanwhile, the world at large is both stronger economically and less stable.

Twenty years ago, there were the first world and the third. Now, you've got places like India, China, South Korea, Russia, Brazil, Argentina, Chile, Turkey, Ukraine, and Mexico where the economies are actually growing quite rapidly but they don't have the stability the more entrenched nations do. Meanwhile, the entrenched nations are largely running deficits and import more of their consumables than ever before. This is true in pretty much any country that doesn't export hydrocarbons (Europe for example) even if it's more pronounced here in the states.

Add on top of that, this was a credit boom, not a housing boom and credit boomed around the world. It's unwinding here, but also in Spain, UK, and Australia just to name a few specific places. To cap it all off, the US financial markets have been the gold-standard for years now. Institutions across the globe have significant money in US bonds or T-Bills or other financial devices. If we stop paying those, it will definitely impact not just us.

While I like the comparison to Japan just so we can apply some lessons learned (dragging out the crash only makes it more painful), I think there is ample reason not to apply the analogy too deeply.
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Re: red flag for crashing market: rising rents

Postby deejayoh » Fri Sep 26, 2008 3:20 pm

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Re: red flag for crashing market: rising rents

Postby rose-colored-coolaid » Fri Sep 26, 2008 4:14 pm

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Re: red flag for crashing market: rising rents

Postby sniglet » Wed Nov 12, 2008 7:29 am

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Re: red flag for crashing market: rising rents

Postby perfectfire » Wed Nov 12, 2008 10:59 am

Remember, if you rent it's not a home, it's a hovel.
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Re: red flag for crashing market: rising rents

Postby sniglet » Wed Nov 12, 2008 11:12 am

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Re: red flag for crashing market: rising rents

Postby rose-colored-coolaid » Wed Nov 12, 2008 11:53 am

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Re: red flag for crashing market: rising rents

Postby deejayoh » Wed Nov 12, 2008 12:17 pm

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Re: red flag for crashing market: rising rents

Postby Markor » Wed Nov 12, 2008 12:37 pm

Rents are definitely falling on the Eastside, from my perspective. I'd say a 5% average drop since Spring.
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Postby plymster » Wed Nov 12, 2008 2:56 pm

Anecdotally, my wife and I moved this summer because our former landlord was tired of losing money on the house he bought in 2005 by renting to us. We found a newer, more spacious home in a better location about a half-mile away for a little less money.

His house is still for sale and tenant-free. He's lost about 10k since we moved out in rent.

If I were a landlord, I'd be cutting prices right now to prevent losses like these. It's no wonder prices are dropping.
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Re: red flag for crashing market: rising rents

Postby perfectfire » Wed Nov 12, 2008 3:08 pm

I just moved because my landlord was tired of losing money and having to be a landlord (i.e. obey landlord-tenant laws) so he told us he was going to sell the house. Well, I went back to visit a neighbor and whadaya know, there's a For Rent sign up. Asking $100 more for that dump. The light in the garage was on and there was a short ladder underneath the leaking drain pipe that we had been trying to get him to fix for a few months (it had been leaking well before we moved in).
Remember, if you rent it's not a home, it's a hovel.
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Re: red flag for crashing market: rising rents

Postby sniglet » Wed Jan 14, 2009 11:38 am

Something dramatic is clearly occuring with the rental market. I am just AMAZED at how the volume of advertisements for 3 bed/2 bath domiciles for $1600 or less has ballooned on Craigslist in the last 3 months. Even more incredible is the desperation landlords are resorting to in order to entice renters. I am just amazed to see how almost every other listing is trying to give something away. All the come-ons to people with poor credit, and free plasma TVs, just blow me away!

What has happened to make things change so swiftly? Have masses of people suddenly decided to leave the Puget Sound, thereby decreasing rental demand? I can't believe renters have suddenly decided to buy instead (the sales stats don't bear that out).

Here are some samples of the Craigslist listing I am seeing.

- $1550 / 3br - Bright Edmonds TownHome 4 Lease to Own! Bad Crdt OK!! - (Edmonds)
- $1495 / 3br - Puyallup Quadrant Home - Ready to Move in Now! We Work with Bd Credit! - (Puyallup)
- $1395 / 3br - Marysville - Charming Lease to Own Rambler - Bad Crdt OK!! - (Marysville)
- $1500 / 3br - Call About Manager's Specials!
- $1503 / 3br - Would you like $1009 Free Rent? - (Redmond, WA)
- $1401 / 3br - Don't get left in the Cold, Come check out our Great Specials ! - (Redmond, WA)
- $1199 / 3br - Lowest Prices Of The Year! Your New Home Awaits You! - (Bellevue/Lakemont)
- $1599 / 3br - **Didn't get a FLAT SCREEN for Christmas? We'll give you one!!**** - (Bothell)
- $1599 / 3br - 2.5 Bathroom Town Home **FREE is a four letter word** - (Bothell/Canyon Park)
- $1600 / 4br - Lease takeover - last + deposit paid, you keep deposit! - (Bellevue)
- $1400 / 3br - ►ONE MONTH FREE W/ YEAR LEASE. Mountain Views! - (Issaquah)
- $1480 / 3br - Make $72k a year or under. Then we have a 3 bedroom just for you!! - (Bellevue)
- $1200 / 3br - $1200 per mo. 3bd/2ba **No Credit Check** - (SHELTON)
Last edited by sniglet on Wed Jan 14, 2009 12:28 pm, edited 2 times in total.
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