Damn you, subprime!
Here's why I hate subprime mortgages:
- Not because they were a stupid idea that allowed too many people to get houses they couldn't afford.
- Not because the lenders were being myopic and foolhardy and now have government help.
- Not because the consumers were being myopic and foolhardy and now have government help.
- Not even because the effect of all the mortgage-troubles meant that people aren't paying their cards and now card companies are pulling nasty tricks like randomly raising people's interest rates and/or lowering their limits.
Nope. I hate the subprime because there's an extra way that the rest of America is getting the shaft: rent.
- When people walk away from their homes, what do they do? They rent!
- Even when people sell the home they can't pay for, what do they do? They rent!
- And all those people who want to buy but can't -- because even though they can pay the mortgage, the subprime/Fannie/Freddie crisis means it's really hard to get approved -- what do they do? They rent!
And what do landlords do, when faced with a deluge of would-be renters? They raise rents!
The city of Seattle has lost its mind. Rents everywhere have skyrocketed beyond absurd. (Apologies to anyone in real rent-crazy cities like NYC. I know it sounds like I'm whining. But this is a case of serious sticker shock.)
Yeah, rents have been slowly creeping up ever since I moved to Seattle. And it sped up a bit in the last year or so as the worst of the subprime hit the fan -- to coin a phrase.
We pay $700 for a 648 sq ft apartment in a secure building with underground parking. No washer/dryer in unit. A couple of units in my building rented for $780, and I was shocked. But the last unit went for $870, and there's another on the market at that price.
The last time I seriously checked out apartments, about a year and a half ago, you could find a 1 BR apartment with a washer/dryer in unit for around $750. Maybe $800-850 if you went for a bit of luxury.
I'm seeing a ton of apartments going in the $900s. For a ONE BEDROOM. This is insane. I'm seeing similar prices all throughout the city (except in the southend which is really not an option for reasons of safety, gas money and others).
So what can I do? Well, I can:
- Hope the subprime crisis eases up a bit in the near future, since we've been focusing more on the credit crisis lately.
- Hope some of the furor is due to school starting soon. There's a high demand right now.
- Keep an eye out for a decent apartment and nab it, asap. But that means not waiting until rent actually goes higher. Plus, there are restrictions as to when you can give notice.
- Prepare for a rent raise with some thought.
This last one probably has the best shot at success. The newer apartments have been retooled by the owner:
- New paint jobs
- New carpet
- Tiled backsplashes in the kitchen
- New counters
That's easily $1500.
Not to mention the following will need to be done if we move:
- New fridge (our liner is cracked and molding and it's an old model anyway)
- Patch up some holes the owner made in the bathroom ceiling (long story, involves a dripping pipe)
- New linoleum in the bathroom
- New sink in the bathroom (ours actually has rust in a few spots that has gotten progressively worse, but not enough so that it bothers us)
- Probably new counter, since they'll replace the sink.
That's got to be at least another $1000. So even assuming I've overestimated costs, it'd be a minimum of $2000, probably closer to $2500.
So I plan on writing a polite note pointing outthat our apartment is in very different shape than the units currently renting. And if they insist on raising rents, we will probably move, which means a couple thousand dollars of repairs. Even if they can rent it for $870, it would take them at least one year to recoup the cost of repairs.
Meanwhile, they don't have to hassle with move-in/move-out stuff, deposits, leasing, or troubles with the new tenants. (We're pretty easygoing and don't ask for much.)
Well, this post has calmed me down a little. I am still pretty indignant about the whole rent-scenario. But it seems like I have a few more alternatives than when I started the rant. Even so, let's all think happy thoughts about my rent staying the same, okay?