Blogocentric Formulations

Unrealistic Housing Market

Since the maintenance debacle of last Monday, my wife and I have been looking for a new place to live. Not just for that, but because we're getting a little older, we're both working full-time now, and we figure that maybe it's time to upgrade from the one-bedroom apartment we've lived in since we needed to survive on one income.

The problem is, our desire for a better place to live doesn't trump our good financial sense, and the Southern California housing apartment is still ridiculously inflated. We got into our current apartment at the height of the housing bubble, and we're paying $1300 a month for a one-bedroom apartment outside of Los Angeles proper. (As my friends back home delight in telling me, that's more than their mortgage payment.) In today's housing market, an apartment comparable to our own - reasonably-sized, small building, etc. - is going for $800-$1100, and two bedrooms are in the $1200-$1400 range.

One would logically think that a nicer two-bedroom apartment - the newer, big building ones that at the height of the housing bubble were going for two grand a month or more - would be subject to the same decline in housing prices as the rest of the world.

Nope.

They want more. Most of them are charging $100-$200 a month more in rent than they were two years ago, and every single one of them cites the reason being that the economy is hurting their business and they have to offset their losses.

I'm sorry, but the economy is affecting everybody, not just businesses. I don't know many people (my wife and I included) who would even think about renting an apartment for $2200 a month in this economy when pink slips and layoffs are always around the corner. And call me crazy, but I don't think it's your tenants' responsibility to pay astronomically inflated rent just to off-set your balance sheet. You have to charge fair market value for your units, not just what you want them to be worth. Maybe that's why your units sit vacant for six months or more at a time.

Besides, how much is a company really hurting when all their leasing agents are driving two year old BMWs and Mercedes?

It seems like the wife and I will be living in college-style comfort for a little longer...