Good Time To Be A Renter

It's been a Renter's Market for the last couple of years.


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owning real estate now has a large opportunity cost, in addition to large carrying cost.

rent rates are still screaming, R-E-N-T, don't BUY~ at the top of their collective I/O ARM lungs.

"Never be caught paying good money on a mortgage when you can rent for so much less"

This is now true. When you consider mortgage costs at 7-8 %, crazy, crazy,
insurance costs and purely INSANE property tax levels, and NEGATIVE appreciation, it is AN EXTREMELY POOR BUSINESS DECISION to buy a house at this time.

When you add pool and yard maintenance fees, homeowners fees that are sometimes covered by leases, its nuts to buy now.

If you are talking strictly sowal, you may be right. However, every market and buyer is different so this blanket statement may not be true.

Today's 30 year fixed rate loans can be had at 6.125.

If you are talking strictly sowal, you may be right. However, every market and buyer is different so this blanket statement may not be true.

Today's 30 year fixed rate loans can be had at 6.125.

Spin,

But I heard things have changed in the last month. Aren't lenders requiring the borrower have a downpayment, a steady job, a decent FICO, and a debt ratio that will allow them to pay back the loan?

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That 6 percent is for someone that is AAA plus credit with a huge down payment and a ton of side cash JUST in case. I love the stories i read here from the "experts" that havent talked to the real people not the fake realtor hypsters that work at restaurants serving up food to pay their bills now that things are bleak and getting bleaker. The microscope lenders are using now make a procto look inviting - if you dont believe me call one - the first question is "how much money do you have?" not the question from a few years ago which was "What do you want?"...Youd have to be Warren Buffet to get a 6 or even a mortgage on a high priced anything in So Wal and especially if this is the typical second home.

The problem w this area is the folks like Spin that talk hype - you can get a mortgage cheap - BS...the market here is DREADUL and will get worse. The bottom isnt anywhere near today...maybe next year. There is a glut of homes and condos and a glut of available rentals. Some homes are sitting for months before anyone wil even ask for a showing...and thats A FACT. Condos are sitting for months with no one asking for a showing.

What fool would jump both feet into this mess and buy anything. Rent and ask for the deal of the century. Most will take a cut off the rent and sec deposit just to get you under wraps for a year - until this turns some.

The problem w this area is the folks like Spin that talk hype - you can get a mortgage cheap - BS...the market here is DREADUL and will get worse.

I guess everything is relative. I think that people who had a loan during the Carter Administration, when interest rates were over 20%, would say that that a 10% mortgage was very cheap.

That 6 percent is for someone that is AAA plus credit with a huge down payment and a ton of side cash JUST in case. I love the stories i read here from the "experts" that havent talked to the real people not the fake realtor hypsters that work at restaurants serving up food to pay their bills now that things are bleak and getting bleaker. The microscope lenders are using now make a procto look inviting - if you dont believe me call one - the first question is "how much money do you have?" not the question from a few years ago which was "What do you want?"...Youd have to be Warren Buffet to get a 6 or even a mortgage on a high priced anything in So Wal and especially if this is the typical second home.

The problem w this area is the folks like Spin that talk hype - you can get a mortgage cheap - BS...the market here is DREADUL and will get worse. The bottom isnt anywhere near today...maybe next year. There is a glut of homes and condos and a glut of available rentals. Some homes are sitting for months before anyone wil even ask for a showing...and thats A FACT. Condos are sitting for months with no one asking for a showing.

What fool would jump both feet into this mess and buy anything. Rent and ask for the deal of the century. Most will take a cut off the rent and sec deposit just to get you under wraps for a year - until this turns some.

You can't buy in Malibu either, but that does not change the fact that 6.125 is historically cheap money. Your post tells me your under 30 years of age, so your getting a pass today. Read up on FHA programs and expand your search area, or rent. It's a buyer's market for the short term in SoWal.

When I was shopping around for mortgages within the last year I was offered rates at or close to prime (prime plus 1 or 1/2) by the local banks. I have a good credit history, but not stellar as I haven't been out of school that long, pay my bills on my schedule, not theirs, and my credit card "emergencies" have included a trip to Italy that took a couple years to pay off.

I'm glad bankers are now looking carefully at whether or not people can afford their mortgages. Would have saved a lot of trouble and stress if they'd been doing that all along.

Gee Whiz CubsFan...tell us what you really think

You make me look like the Chief Economist for the NAR.

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That 6 percent is for someone that is AAA plus credit with a huge down payment and a ton of side cash JUST in case. I love the stories i read here from the "experts" that havent talked to the real people not the fake realtor hypsters that work at restaurants serving up food to pay their bills now that things are bleak and getting bleaker. The microscope lenders are using now make a procto look inviting - if you dont believe me call one - the first question is "how much money do you have?" not the question from a few years ago which was "What do you want?"...Youd have to be Warren Buffet to get a 6 or even a mortgage on a high priced anything in So Wal and especially if this is the typical second home.

The problem w this area is the folks like Spin that talk hype - you can get a mortgage cheap - BS...the market here is DREADUL and will get worse. The bottom isnt anywhere near today...maybe next year. There is a glut of homes and condos and a glut of available rentals. Some homes are sitting for months before anyone wil even ask for a showing...and thats A FACT. Condos are sitting for months with no one asking for a showing.

What fool would jump both feet into this mess and buy anything. Rent and ask for the deal of the century. Most will take a cut off the rent and sec deposit just to get you under wraps for a year - until this turns some.

Cubsfan, you are entertaining at least - talk about hype. Warren Buffet? TONS of cash? Please read what I wrote. I said in sowal, the post might be correct, but other areas maybe not. I am not talking hype. The earlier post made a statement about 7-8% mortgages and implied that was the norm on buying a house. Now keep in mind that post was talking rent vs. buy, which means primary residence, not 2nd home and definitely not investor.

No one is saying bad credit or medium credit can walk in and get 100% financing at 6%. You are correct about one thing - if someone is purchasing a home, lenders do want to know how much down payment they have. However, if you are purchasing a primary residence, with good credit you can go to 95% in the conforming loan market, meaning 5% down. Reserves always help but credit over 660 with a 5% down payment and verified income to support a debt ratio < 45% gets approved all day long. 660 is not AAA stellar but is pretty good. I don't know if I'm an expert but I run Fannie Mae and Freddie Mac applications all day long (from real people) and see what gets approved and what doesn't and what's necessary (not a huge down payment and a ton of side cash JUST in case - of course I don't know how much 'huge' is or how much a 'ton' is).

A minus credit (620 or so) will get you approval at 90% refi with cash out and a rate somewhere around 7.25 -7.50. Purchase to 100% is still available but rates would be higher.

Spin,

But I heard things have changed in the last month. Aren't lenders requiring the borrower have a downpayment, a steady job, a decent FICO, and a debt ratio that will allow them to pay back the loan?

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Yes. 100% purchase is still available in the nonconforming market with some lenders. For primary residence, 620 and up, full documentation, and debt ratio on that usually needs to be < 50%.

See my previous post for conforming - you know, that mythical 6% unicorn.

Isn't it a great time to be a landlord? Now all of these people can't get mortgages, so they have to rent. This equates to greater demand that means increase in rents.

I just leased one of my properties in Atlanta after having a for rent sign up for only a couple of days, and raised the rent from the previous tenant. Rents had been stagnant/declining the last few years.

Isn't it a great time to be a landlord? Now all of these people can't get mortgages, so they have to rent. This equates to greater demand that means increase in rents.

I just leased one of my properties in Atlanta after having a for rent sign up for only a couple of days, and raised the rent from the previous tenant. Rents had been stagnant/declining the last few years.

Personally, at least in this area (ie Emerald Coast), I would say that most landlords dont have it to good down here...

ECAR's available rental units (supply) have increased from the high 600's last year to the high 900's this year...

Rents may have increased a tad if not decreased will the landlords taxes and insurance have been going through the roof...

Not to mention your "equity" is droping like a rock... But who cares about that as a landlord right, everybody was buying these houses the last two years for rental income, not the promised 20% equity gains each year out infinitum... :roll:

I agree with destinism. As more units are built, more are sitting vacant, because one person can live in only so many units. More inventory is attempting to be rented out, and I have seen rental prices drop to a somewhat affordable level, as compared to the past. Landlords are even allowing pets in many cases. The market isn't so great for the landlords, but for the tenants, it is a good thing to see. It means that servers who cater to the tourists, will actually be able to afford to live here. The good or bad is only in the eyes of the beholder.

I just re-fied my abode;(JUST IN TIME) the loans of the past IE: no proof income and such are now long gone

Spin,

But I heard things have changed in the last month. Aren't lenders requiring the borrower have a downpayment, a steady job, a decent FICO, and a debt ratio that will allow them to pay back the loan?

.

I just re-fied my abode;(JUST IN TIME) the loans of the past IE: no proof income and such are now long gone

Currently there are still stated income loans available but the guidelines have tightened - minimum credit score, maximum loan to value, etc.

No matter if the rate is 6,7 or 8 percent, owning just does not compute
(vs renting).

No matter if the rate is 6,7 or 8 percent, owning just does not compute
(vs renting).

If you consider only the cash flow, you are correct.

I just re-fied my abode;(JUST IN TIME) the loans of the past IE: no proof income and such are now long gone

No matter if the rate is 6,7 or 8 percent, owning just does not compute
(vs renting).

I re-fied last year and got a decent rate, and there is no way in h311 I would ever be able to rent a 3-BR house by myself for what I'm paying on my mortgage.

No more renting for me.

Rambunkscious, I'm curious, are you currently trying to rent out a property?

Regardless of the current market condition - I've always been amazed at how most of the locals I know never purchased property - and just sat on the sidelines watching opportunity pass them by...
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Regardless of the current market condition - I've always been amazed at how most of the locals I know never purchased property - and just sat on the sidelines watching opportunity pass them by...
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Some weren't willing to buy lots at $5000 each so there is no way in hell that they'd change their mind and spend $150,000 only eight years later.

No, I am not trying to rent out a property. I myself am an owner. I am just saying if you buy today, not years ago, when you calculate the interest, tax, insurance, hoa fees and get a total, this total will be higher than the current rental rate, might even be a lot higher.

The rent number and the own number will eventually equalize when the value of the re drops accordingly. Since the cap gain rate is now zero or less, it was not used in the calc.

Agree re over time is a home run, just not now. Renting is a home run now.

Agree re over time is a home run, just not now. Renting is a home run now.

Don't you have to buy at some point in time in order to own? Can't have that home run if you are renting. Are you suggesting that real estate prices will lessen to the degree that properties in SoWal will begin to break even or even provide positive cash flow? In many resort areas, not just SoWal, I doubt that is the case. SoWal is sexy, and most positive cash flow properties which you will find scattered about the country are not purchased due to their sex appeal. SoWal property speaks to the emotions of buyers. I will add that for a long time, beach properties were considered luxury items, no different than fancy cars or nice boats. Luxury items typically have no cash flow. Do you think that properties in the Hamptons, or the coastal properties in California, Oregon, and Washington State, provide positive cash flow?

When I read some of these threads it makes me wonder if people realize property in Sowal is selling... Yes, the market is down but It seems really good deals do not make it long on the market. I agree with SJ. Folks that are buying are not concerned with the outcome of the market over the next 24 months. They want a house or land here and believe in the history of this area and the future. They feel that there will be some bumps along the way but at the end of it all this unique area will stand the test of time.