The good doctor pointed out that there are more high-paid renters in San Francisco than homeowners now:
The graph shows 20% of renters in San Diego are making more than $100,000 per year – are those the people you see at open houses every weekend, hoping to find the right house at the right price? Certainly a portion of those renters are in the hunt, which should keep the market going for now.
the false assumption in this article is that renters in SF Bay Area are renting by choice.
all those high income earners that lose in a bidding war have to live somewhere. And, when you consider these high income earners can qualify for properties above 1 million dollars, then landlords know they can consistently jack the rents year after year.
Agreed – the doctor is doomy.
I’m a high-paid renter in the Bay Area. It is definitely not by choice. I can’t complain that much though, we are getting a great deal on rent. I calculated that we would need a $1MM *down payment* to get a mortgage on our rental the same as our rent payments.
I love it up here, but I’m going to have to move someday if I’m ever going to own a home again.
IMO, there are a lot of immigrants, with kids, in so cal. Those kids are constantly hitting the age of 18, and will continue for the foreseeable future. They need a place to live. We have brought thousands of immigrant kids into the country in the last few days, to join their families, and will continue until our current president leaves office. Add that to the usual daily surplus of assorted immigrants, and we will enjoy rent rates that will be very stable, If not increase further this year, as we move forward.
Where I live, I’m noticing renters from upper end rental areas being apparently priced out, and moving blocks over to lower rent areas. That is, I’m seeing Beemers and Mercedes parked in apartments I’ve never seen Beemers And Mercs before. So it seems to me it might be that the former middle-class rental areas are getting squeezed from both economic sides. If so, I don’t see the pressure letting up soon.