Why are Rent Prices so damn high these days?
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Ben Vereen
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PostPosted: Wed Sep 13, 2017 2:37 pm    Post subject: Why are Rent Prices so damn high these days?

Simple question. Rent prices for even just a studio apt near downtown is ridiculous.

Why is the rent so damn high?
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tlim
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PostPosted: Wed Sep 13, 2017 2:58 pm    Post subject:

NIMBY
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No. 17
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PostPosted: Wed Sep 13, 2017 3:00 pm    Post subject:

Housing inventory shortage.
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lakersken80
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PostPosted: Wed Sep 13, 2017 3:44 pm    Post subject:

AirBnB
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tlim
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PostPosted: Wed Sep 13, 2017 4:55 pm    Post subject:

No. 17 wrote:
Housing inventory shortage.


Because of NIMBY.
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splashmtn
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PostPosted: Wed Sep 13, 2017 5:53 pm    Post subject:

econ 101. supply and demand.

low supply super high demand.
and what makes matters worse. the first types of housing being built to help said supply is "Luxury" housing.
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PostPosted: Wed Sep 13, 2017 5:55 pm    Post subject:

not the first to ask
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ringfinger
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PostPosted: Wed Sep 13, 2017 6:07 pm    Post subject:

They are definitely not in sync with wage increases (or lack thereof)
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Ziggy
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PostPosted: Wed Sep 13, 2017 7:00 pm    Post subject:

I don't know, but I own a property that is in a rent-controlled area and my tenants are paying WAY below market value. Like almost $1000 a month below. I could raise the rent every year for the next 7 or 8 years and it'd still be below market value because I can only raise it 3% per year. Only one out of the original 3 roommates lives there but she keeps swapping out the other roommates, so the original lease is valid. Rent stabilization does work. Sometimes a little too well, unfortunately.
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unleasHell
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PostPosted: Wed Sep 13, 2017 9:54 pm    Post subject:

Buy as soon as you can...
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Goldenwest
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PostPosted: Wed Sep 13, 2017 10:17 pm    Post subject:

ringfinger wrote:
They are definitely not in sync with wage increases (or lack thereof)


Wages are lower today than in 1998. Yeah, rents and house prices are not in sync with wages. And i'm talking W-2 wage earners not those with suitcases full of cash.

the whole housing market is Fu**ed up. High rents are just part of the mess. You thought 08 was a bursting of a big Bubble. this one, when it gets here, will be bigger.
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PostPosted: Wed Sep 13, 2017 11:21 pm    Post subject:

lakersken80 wrote:
AirBnB

Big reason for sure. If you have property in or around a tourist area, you can make about as much in a weekend or two as you could renting it out for a month.

Vacation rentals are a huge problem in the neighborhood in SD where I grew up (and my parents still live). When I was a kid it was a pretty quiet, single family neighborhood. Now about 1 in every 7-8 houses on the street are essentially turned in to frat houses every weekend (especially summer), with large groups of 20-somethings partying until 3 AM.
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Ziggy
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PostPosted: Thu Sep 14, 2017 8:31 am    Post subject:

Goldenwest wrote:
ringfinger wrote:
They are definitely not in sync with wage increases (or lack thereof)


Wages are lower today than in 1998. Yeah, rents and house prices are not in sync with wages. And i'm talking W-2 wage earners not those with suitcases full of cash.

the whole housing market is Fu**ed up. High rents are just part of the mess. You thought 08 was a bursting of a big Bubble. this one, when it gets here, will be bigger.


Depends what parts of L.A. people are looking. Some areas have always been high. My income as a business owner is the lowest it's ever been since I've been owner (around 12 years), as min wage has been steadily increasing over the last several years. My employees have never complained to me about rent. I hear more complaints about our public transportation than rent. I think I've been giving them raises faster than the rate of rent increase, and I'm certain this isn't an isolated case.

My family has been in business for 40 years and we've never seen wage increases like we're seeing now. Typically they raise it 0.25 cents or 0.50 cents every few years. It's been going up $1 annually and will continue to do so until 2020. To be clear, all of my employees make above min wage, but raising min wage means we're just raising the floor, so it affects EVERYONE, even those earning above min wage. I'm already looking to sell my family run business while I can still show a steady flow of income, because I'll be out of business before it hits $15. So something has to give.

My employees have never had a hard time finding an apartment. Once in a while I'll write an employment verification letter and they find a place within a week or two. I'm not saying L.A. has cheap housing. I know it's more expensive here. Just saying that isn't anything new. And squeezing more out of businesses isn't going to change that. It's just going to drive businesses out of california, which is already happening.
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pmacla
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PostPosted: Thu Sep 14, 2017 8:55 am    Post subject:

saw a chart yesterday that showed in the last 10 years rents have increased by 25 % while wages have decreased 8%
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PostPosted: Thu Sep 14, 2017 9:33 am    Post subject:

I honestly believe they are asking us to move out of California
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marga86
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PostPosted: Thu Sep 14, 2017 10:10 am    Post subject:

pmacla wrote:
saw a chart yesterday that showed in the last 10 years rents have increased by 25 % while wages have decreased 8%


It's very likely that the chart is inaccurate.

There are certain things that are scaring the (bleep) out of people -- increasing wages is one of them. Couple that with low inflation, and people think it's a recipe for disaster.

I'm not sure where people are getting their information from, but the housing market is nothing like it was in 2008. If you don't believe me, go out and buy a home. The amount of well qualified buyers who are in a home and the ones out in the market looking is staggering. Very few people would lose their homes, even with an economic downturn.

People want to know why rent is so darn high; they want some sort of technical explanation, but it the answer is pretty straight forward: LA is just that expensive.

Do you know why rent is cheap in phoenix, the inland empire, etc? Well because it's not as desirable. You want cheap rent, you go to phoenix, you want to live in LA.. well, there's a premium. Not enough places for everyone, and demand is pretty darn high.. Basic economics.
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pmacla
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PostPosted: Thu Sep 14, 2017 10:41 am    Post subject:

marga86 wrote:
pmacla wrote:
saw a chart yesterday that showed in the last 10 years rents have increased by 25 % while wages have decreased 8%


It's very likely that the chart is inaccurate.

There are certain things that are scaring the (bleep) out of people -- increasing wages is one of them. Couple that with low inflation, and people think it's a recipe for disaster.

I'm not sure where people are getting their information from, but the housing market is nothing like it was in 2008. If you don't believe me, go out and buy a home. The amount of well qualified buyers who are in a home and the ones out in the market looking is staggering. Very few people would lose their homes, even with an economic downturn.

People want to know why rent is so darn high; they want some sort of technical explanation, but it the answer is pretty straight forward: LA is just that expensive.

Do you know why rent is cheap in phoenix, the inland empire, etc? Well because it's not as desirable. You want cheap rent, you go to phoenix, you want to live in LA.. well, there's a premium. Not enough places for everyone, and demand is pretty darn high.. Basic economics.


to qualify that chart it was talking about LA rental prices and there are enough plac to live in LA true but there are not enough of affordable units, they are building more and more "luxury" apartments driving up the market and not enough affordable units leading to more homelessnes which in LA these days looks like multiple old RV's parked on the street everyday and night all over the place
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adkindo
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PostPosted: Thu Sep 14, 2017 12:50 pm    Post subject:

what is rent for like a 2 BR / 2 BA apartment in a decent (clean, lower crime, etc.) area of LA? a 3 BR / 2 Bath house?
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marga86
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PostPosted: Thu Sep 14, 2017 1:53 pm    Post subject:

adkindo wrote:
what is rent for like a 2 BR / 2 BA apartment in a decent (clean, lower crime, etc.) area of LA? a 3 BR / 2 Bath house?


I pay $1,600 for a 1BR in an ok area.

3BR/2BR in a decent neighboorhood is around $550k - $750k (from what i've seen).

I doubt you'd be able to get anything under $650k in a city like torrance though.
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pmacla
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PostPosted: Thu Sep 14, 2017 2:15 pm    Post subject:

adkindo wrote:
what is rent for like a 2 BR / 2 BA apartment in a decent (clean, lower crime, etc.) area of LA? a 3 BR / 2 Bath house?


2 br in LA as described 2400+ a month
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LakersRGolden
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PostPosted: Thu Sep 14, 2017 6:10 pm    Post subject:

1) Millennials are shifting to a preference to rent
2) The mortgage crisis has caused non millennials that could afford to buy to stick with renting and splurging a little.
3) Job security is shrinking, so a non-mobile asset can cause problems.
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PostPosted: Thu Sep 14, 2017 7:27 pm    Post subject:

Ziggy wrote:
Goldenwest wrote:
ringfinger wrote:
They are definitely not in sync with wage increases (or lack thereof)


Wages are lower today than in 1998. Yeah, rents and house prices are not in sync with wages. And i'm talking W-2 wage earners not those with suitcases full of cash.

the whole housing market is Fu**ed up. High rents are just part of the mess. You thought 08 was a bursting of a big Bubble. this one, when it gets here, will be bigger.


Depends what parts of L.A. people are looking. Some areas have always been high. My income as a business owner is the lowest it's ever been since I've been owner (around 12 years), as min wage has been steadily increasing over the last several years. My employees have never complained to me about rent. I hear more complaints about our public transportation than rent. I think I've been giving them raises faster than the rate of rent increase, and I'm certain this isn't an isolated case.

My family has been in business for 40 years and we've never seen wage increases like we're seeing now. Typically they raise it 0.25 cents or 0.50 cents every few years. It's been going up $1 annually and will continue to do so until 2020. To be clear, all of my employees make above min wage, but raising min wage means we're just raising the floor, so it affects EVERYONE, even those earning above min wage. I'm already looking to sell my family run business while I can still show a steady flow of income, because I'll be out of business before it hits $15. So something has to give.

My employees have never had a hard time finding an apartment. Once in a while I'll write an employment verification letter and they find a place within a week or two. I'm not saying L.A. has cheap housing. I know it's more expensive here. Just saying that isn't anything new. And squeezing more out of businesses isn't going to change that. It's just going to drive businesses out of california, which is already happening.


What business are you in?
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vanexelent
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PostPosted: Thu Sep 14, 2017 8:47 pm    Post subject:

Goldenwest wrote:
ringfinger wrote:
They are definitely not in sync with wage increases (or lack thereof)


Wages are lower today than in 1998. Yeah, rents and house prices are not in sync with wages. And i'm talking W-2 wage earners not those with suitcases full of cash.

the whole housing market is Fu**ed up. High rents are just part of the mess. You thought 08 was a bursting of a big Bubble. this one, when it gets here, will be bigger.


Home ownership is near all time lows, so a bubble is less likely.
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PostPosted: Thu Sep 14, 2017 9:45 pm    Post subject:

airbnb has caused an INSANE jump in rent prices.

Los Angeles does have a housing shortage, and unfortunately the units that are being built are not for the average person.

this sounds awful but some days I PRAY for an earthquake so people will get the hell out of here.
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audioaxes
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PostPosted: Thu Sep 14, 2017 9:55 pm    Post subject:

last year my wife and I made the strategic decision to sale our 4 bedroom 4 bath home on quarter acre lot during the summer and rent in an apartment in hopes we find a winter deal on our next home...
our 2 bedroom 2 bath apt rent on a luxury apartment 5 miles away from our previous home cost more than what our mortgage was.
The cost of entry has now shot up to unrealistic amounts in most areas but from as early as 2 years ago I was telling everyone I knew to buy instead of rent even if it meant scrapping in at 3.5% down and settling on whatever you could afford.
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