Category Archives: Real Estate & Rent

Rental Prices Rising as Housing Stuck in Slump: Or, The Tiniest Apartment in NYC

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When people don’t want to buy houses (or are forced out of their houses because they can’t afford them) that means one thing: rental costs are going up. It’s a simple law of supply and demand. Reis Inc’s quarterly report showed the vacancy rate dropped to 6.2 percent in the first three months of the year, down from 6.6 percent in the fourth quarter. It was the steepest fall since the commercial real estate research firm began tracking the market in 1999.

Increased employment, especially for 20- to 34-year-olds, is spurring demand for housing. Many of those newly employed younger people, however, cannot come up with the tens of thousands of dollars often needed for down payments, turning them into renters. — Reuters

However, not everyone is letting rising rents get to them, even in the world’s most expensive cities. Renters, for frugal inspiration, 40 Year Old Felice Cohen — a professional organizer in New York City — shows that you don’t need to spend a lot to live in an expensive area, you just need to be, well, extremely organized. And be willing to sleep 23 inches from your ceiling. This woman spends $700 a month in NYC on a 90-square-foot closet apartment… closet. You have to see this (if you haven’t yet)…

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20-Something Life in The City vs. The Burbs

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It’s Sunday morning, and I roll out of bed after a much-needed full night of rest and stare out my window. One roommate is up, clanking around the kitchen, but otherwise, there is just a slight breeze that can be heard through the windows and silence.

It’s all too tempting to remain in my bed another hour longer as there really isn’t anything to jump out of bed to do. In order to get anywhere, I have to drive at least 10 minutes away. To get to the city, it’s an hour drive give or take. So, while I’d love to head to Golden Gate Park for a run, instead, I lie in bed, and imagine what it would be like to live in the city.

When I moved out to the Bay Area in 2005, I always assumed I’d end up in San Francisco. But, instead, I’ve managed to live just about everywhere within an hour radius around the city and never in it.

There’s a part of me that feels like I need to experience city life now, before I get “old” and have a family and a reason to trap myself in the ‘burbs. Right now, there’s a piece of satisfaction with life I’m missing, and I think that has a large part to do with not living in the city. I want to be able to go to a figure drawing open session on Tuesday night… or Thurs night. And make new friends that are my age who like to go out and do… things.

Right now, I’m in a coffee shop in San Francisco near the Lower Haight, and the energy here is so city Sunday. Soft music plays, people are talking, reading, enjoying the day. Through the glass in front of me are four women, probably in their early 30s, enjoying a relaxing lunch, the SF version of Sex & the City (more hoodies, ponytails, but probably similar conversation.) And I want that… I want a life outside of work and watching reruns at my boyfriend’s house.

July 1 I have the opportunity to move… I can either stay close to work, or… maybe it’s the right time to make the move to the city. It would mean an hour-long commute to work, and more expensive rent, but it could also mean finding the missing link between my life today and my happiness.

What do you think? Do you live in a city or suburbs? Does living in a city help one be happy and feel more connected in her 20s/30s?

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My Dad Thinks I Should Buy A House

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Mom: “Dad thinks you should buy a house.”

Me: “I don’t have enough money to buy a house. The cheapest 1br condo here would be more than $300k.”

Mom: “He said you should put a down payment of $100k. You have $100k.”

Me: “Most of that $100k is in my retirement accounts.”

Mom: “Dad thinks you should buy a house before you put money in a retirement account.”

Me: “Ugggggh. Tell dad if he wants to buy me a house, I’ll buy a house.”

Mom: “Dad thinks YOU should buy a house.”

A day rarely goes by when I haven’t browsed the condo listings on Craigslist or Zillow, oogling at various houses that I can’t afford. I don’t feel the need to buy a house right now… as it seems the option is paying $700 in rent or $2000+ in mortgage, interest, insurance, taxes and HOAs. Buying a place just doesn’t add up.

What really frustrates me is how my dad always thinks he knows what is best for me. Here’s why it doesn’t make sense for me to buy my own place… my job, despite being full time with benefits, isn’t a sure bet. Working a startup, you have to assume that within two years when the money runs out you may be out of a job. I’m confident that even in this dismal economy I can get another job eventually… but when I’m renting digging out $700 a month to cover rent from savings doesn’t kill me. Covering a mortgage probably would. Then there’s the fact that I don’t know where I’ll be in one year, let alone five years. And housing prices here aren’t that low like they are elsewhere in the country.

So, you know what dad, I’d rather rent. I like my mobility, my semi-affordable monthly payments, my ability to put most of my monthly income into the stock market (which… may also be a bad idea, I’m not exactly an investing genius.) In the long run I don’t know if I’d do better “investing” in a house vs taking all that money and investing it in the market. But I figure odds are I’ll make out better in the long run going the stock route vs. the crap the foundation of my house collapsed route.

But seriously, dad, if you really want me to buy a house, I’ll gladly accept a downpayment from you.

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Moving On… Out?

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Sure, there have been moments where I wanted to pull my hair out living with my current roommates, and I’ve been guilty of causing these moments in return, but the past 2.5 years living in this apartment have been some of the most stable in my life. This has been the apartment of my mid 20s, and now it’s time to figure out the housing situation of my late 20s.

My current apartment — a room in a 3br, 2ba in a nice condo complex in the Bay Area burbs (next to houses that cost $1.5M+) cost me $632.50 a month. The room is small, but big enough for a full size bed, and has a wide widow overlooking greenery, blocking the parking area from view. It has large sliding mirror doors on the closet, which makes it seem more spacious, and much better than the room I first lived in when I moved to the Bay Area (in Burlingame) that cost $450 a month but really felt like a closet.

The rest of the apartment is nice. It has a balcony that I rarely use, a large living room / dining room space, full kitchen, the full bathroom that I share with one other girl, and another full master bedroom with its own private bathroom. The cost breakdown between myself and my roommates has never seemed totally fair… the private bedroom with walk in closet and private bath is $770 a month, where the much smaller bedrooms are $632 each. But I’d prefer to have access to a bath (not shower only) and like the window in my room, so never bothered to complain. The complex is nice, has its own small park-like area, and a pool that I’ve used probably 6 times total since I moved in (but enjoyed greatly on the rare really really hot days of summer.) And the location is pretty good too. It’s about 25 minutes to work, 30-45 minutes to the city sans traffic by car, 10 minutes to my boyfriends house, 5-10 minutes to the supermarket. I’m right by a freeway exit (off the better freeway in the Peninsula.) Oh, and there’s a washer and dryer in the unit!!!

So why move? Well, maybe I won’t. But whether or not I move, there are some major changes coming, because both of my roommates are moving out. One is moving out for her school program, she’s relocating to Southern California. The other is moving in with her girlfriend and closer to work. That leaves me with one 3br, 2ba apartment and no roommates.

While my landlord may choose to increase the price of the apartment when my roommates move out, they may not if I can find immediate replacements. And there are only a few reasons why I’d want to leave…

1) Finding two new roommates is going to be very difficult, and I’ve had so many bad roommate experiences before, that maybe I want to live alone right now

2) The location is ok, but it’s really inconvenient for biking anywhere as it’s up a giant hill. I’d like to live somewhere that makes it possible to bike to work, and use my car less.

3) Maybe now is the opportunity to move to the city. I’ve always wanted to live in San Francisco, and it makes a lot more sense to do it in my 20s/ early 30s, versus when I am ready to have kids and settle down. That said, it would be kind of dumb to move to the city right now, as it would increase my commute time. There are rooms in the city for the same price I’m paying now, or even less, but the apartments wouldn’t be as nice as the one I live in, and they’d also probably not be in the areas I’d want to live in the city (if I’m going to keep my cost the same)

4) Should I find a place that’s cheaper? 632.50 is not bad for a room where I live, but I could feasibly find a place that’s $500. It may not have its own laundry in the apartment, it may require a longer commute, but I could save more money (or have more money to spend on things I need like a car, mental healthcare, etc.)

So… I’m not sure what to do. I’m scouring Craigslist on a daily basis but it’s too early to look. My roommates and I have decided that our move-out date will likely be July 1, which means I can’t really start looking until Mid-to-late May. So that’s three months of driving myself nuts over this.

It could be a great opportunity to be in control of finding my new roommates for this place… but, to be honest, I’m just tired of having roommates. I want something more private, a place I can be a recluse in when I don’t need to be around people. Where I can watch American Idol in peace. But that dream is expensive. When I lived alone previously my rent skyrocketed from $905 a month to $1300 a month in just two years. I feel much wiser paying $600 a month vs $1300! Then again, if I was paying $1300 a month or more it would be an easier decision to BUY a place vs renting. Right now I think I’m doing pretty good renting. I’m able to put a good chunk of change into my investment accounts.

Is it better to own a studio apartment and put all my savings each month into that, or just put all that money into my investment accounts? Plus… with my mental instability (the joys of bipolar II) I think I need the freedom of not being locked into anything (like a mortgage OR expensive rent payments.) I guess I will just have to wait until May/June to figure this out. I’m so tempted to move to the city, but that’s probably an awful idea. What do you think?

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The Housing Bailout: It’s unfair, it’s necessary, it’s ridiculous

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They say a housing bailout is necessary. For all the people who purchased homes they couldn’t afford at to-good-to-be-true rates, here’s your bailout. I’m generally a liberal but this is going too far.

The problem stems from how the American dream is so closely linked to owning a house. If you can’t afford a house – don’t buy one. Renting is not the end of the world. It’s a lot cheaper. Wait until you can afford a reasonable 30-year fixed mortgage to buy a house. That’s what I plan to do.

Of course, given that the government is going to bail everyone out who can’t afford their poor choices, it seems I may have been better off buying a condo years ago. I could be facing foreclosure now, with my home underwater. I could be begging the government to bail me out.

I understand that when you have children the situation changes a bit. You want stability, a house that you’ll own, and not have to worry about moving if your landlord decides to kick you out. Ok, I get it. I feel for you if that’s the situation you’re in. But I still think that when it comes down to it, Americans need to be responsible for their own actions.

God, I sound like a Republican.

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