The 10 Emptiest US Cities – Report from CNBC.com

Alex,

I agree with you 110%, this report means nothing to me.

I would love to be able to interview the reporter and ask them the following questions, and hear their answers.

1. How did you arrive at the rental vacancy rate? In KC you mention that in the 2nd quarter of 2010, the RVR in KC was @ 17%. The issue here is, you never explained the most probable reason why. The way I see that statement is 2010 was the 1st round of ARM's adjusting, those that took a 3 year ARM on their properties, thus when the interest adjusted, sometimes as much as double, this obviously led to hundreds, if not 1000s of investor homes being foreclosed on. It's not hard to understand why the RVR would spike in this quarter. And if you do the math on the foreclosures in Missouri, given the fact that it basically takes 4 missed payments  on a mortgage (assuming the banks don't play games with their accounting practices) to begin foreclosure proceedings in Missouri. So the 2nd quarter, being the 4-6 months of the year, the math works for those ARMs that adjusted in January.

2. Which PM companies did you interview to determine the RVRs to begin with? I have to say here, that if they chose some of the same companies I interviewed, then I can see how they arrived at such a pathetic number.

This is why I have such an issue with these magazines, newspapers and so forth, publishing these reports. They never explain how they got the numbers, so a reader can make an intelligent decision based on the facts. Instead these companies put this type of garbage reporting out, and leave it as it is. Have they never heard of responsible reporting? How can anyone come to a conclusion on any statistics, without seeing the source for those statistics, or at least an explanation of how these numbers were derived?

Just my 2c!

John

To much stock put into the head lines

"CNN says this market is one of the 10 best

AOL say this is one of the 10 worst markets.

From my prospective the foreclosure crisis is thus.

1. sub prime   IE interest rates over 10% to home owners who bought with teaser rates.

2. Investors who either like KC posted have Arms that adjusted up, or decided that they had negative equity and walked.

3. Investor nightmares with property management, IE vacancy, repair costs, and down right incompetant inept and criminal management companies.

Its easy to pick the stratigic default markets

1. Florida
2. Vegas
3. Pheniox
4. Central CA and the inland empire

If you do some research you will see that these areas make up fully 50% or better of the foreclosure problems.

Then you add into the mix low end rentals that become cash bleeders and folks walk from them IE

1. Detroit
2. Much of Ohio
3. Parts of Memphis
4. Inner Atlanta  ( which by the way was the poster child for mortgage fraud)
5. St. Luis and KC along with Indy, cleveland , pittsburg

Then you have stagnet markets:

Dallas and most of Texas.
And other non popular states for investors Like WS MN, ND SD , OK etc etc.

Fast forward to the West coast.

Parts of CA cratered as bad as anywhere where other markets held up or never fell and prices are still in the stratosphere vis other parts of the country. Still going to pay 1 million dollars for a little 1500 sq ft rancher in Palo Alto.  My home that I bought there in 1983 for 170k ( which was huge money then) just sold for a little over 1.4 mil.  look it up 684 Encina Grande Palo Alto CA.

Our market here in Oregon has done OK as long as  you were not High end which in this market was 700 to 2 mil. Anything in the multi millions lost 50% plus in value if you had to sell. but average prices only fell maybe 10% and things are rebounding.
However its like OZ….. Net cash flow is 2 to 4% if your lucky… CA in the better areas is negative. 

Most of the rentals I bought in the mid 2000's on the west coast were negatively geared and I am suffering through them now.

So happy hunting, and heres to finding that happy medium of quality home at a price point that makes sense.

JLH