Your calculations are correct but was the 180k the recorded sale back to the bank or the price to a new buyer? Many times the recent low sale is the repo of the 1st mortgage and in reality many are leveraged with seconds and helocs. If you could actually get it for 180k then it makes sense but that is 35-40% less than what it was when it didn’t make sense. The regular posters don’t believe that R/E needs to cost the same as a nice dinner for it become fundamentally sound, just back to the numbers you quoted. Now if that young couple makes 30k a year and finances it with a loan that will blow up in a few years it doesn’t make sense for them but it will make sense for someone who can and is easily paying for and is happy with their current 1 br at $1050. It is at a 170x rent multiplier, still too high for a prudent investor as a rental but it’s not too bad.

Your calculations are correct but was the 180k the recorded sale back to the bank or the price to a new buyer? Many times the recent low sale is the repo of the 1st mortgage and in reality many are leveraged with seconds and helocs. If you could actually get it for 180k then it makes sense but that is 35-40% less than what it was when it didn’t make sense. The regular posters don’t believe that R/E needs to cost the same as a nice dinner for it become fundamentally sound, just back to the numbers you quoted. Now if that young couple makes 30k a year and finances it with a loan that will blow up in a few years it doesn’t make sense for them but it will make sense for someone who can and is easily paying for and is happy with their current 1 br at $1050. It is at a 170x rent multiplier, still too high for a prudent investor as a rental but it’s not too bad.

If these are the numbers, then it might make sense- if the couple planned to stay a while. People always seem to forget about the sales commissions and points on loans and other costs of buying and selling. And I don’t know of any young couples that plan on staying in a one bedroom condo for long.

First of all, I’m new here…I came across Piggington.com after someone posted a “gloom and doom” post on Craigslist against buying a house due to the inflated housing prices. I’ve found the posts quite interesting so far and I am glad I did not buy last year when my real estate agent (a friend) wanted me to.

I agree on not wanting to stay in a 1-bedroom forever. For myself, it would not work anyway — I only make 50K a year, and after all expenses I only have about $1,300 left for housing. Right now I only pay 900 a month for a 2BR/1BA apartment in North Park, and I have a roommate who pays half the rent so I’m pretty comfortable. However, most of the 2BR/2BA places I have found run about 1700/month after mortgage, HOA, and PMI (have less than 20% saved up to put down) are accounted for. Obviously, I need a 2nd bedroom for my roommate and/or for future expansion. 🙂

Is the tax break for a single person really that great for the mortgage interest deduction compared to just taking the personal deduction? I don’t get to itemize anything else.

However, prices look to be getting down to the 200K mark which I think i could afford….150K for a 2BR and I could absolutely afford it based on payment calculations. I’ve thought about moving out of state to be with family in Oregon who moved there recently but am worried I will be priced out of San Diego if I try to come back later.

Okay sorry for getting off topic. Just noticing prices getting lower!

First of all, I’m new here…I came across Piggington.com after someone posted a “gloom and doom” post on Craigslist against buying a house due to the inflated housing prices. I’ve found the posts quite interesting so far and I am glad I did not buy last year when my real estate agent (a friend) wanted me to.

I agree on not wanting to stay in a 1-bedroom forever. For myself, it would not work anyway — I only make 50K a year, and after all expenses I only have about $1,300 left for housing. Right now I only pay 900 a month for a 2BR/1BA apartment in North Park, and I have a roommate who pays half the rent so I’m pretty comfortable. However, most of the 2BR/2BA places I have found run about 1700/month after mortgage, HOA, and PMI (have less than 20% saved up to put down) are accounted for. Obviously, I need a 2nd bedroom for my roommate and/or for future expansion. 🙂

Is the tax break for a single person really that great for the mortgage interest deduction compared to just taking the personal deduction? I don’t get to itemize anything else.

However, prices look to be getting down to the 200K mark which I think i could afford….150K for a 2BR and I could absolutely afford it based on payment calculations. I’ve thought about moving out of state to be with family in Oregon who moved there recently but am worried I will be priced out of San Diego if I try to come back later.

Okay sorry for getting off topic. Just noticing prices getting lower!

I live in Hillcrest and regularly check condos here and North Park.
2 years ago there were 3 listings on average on any given day.

Three!

Now there are pages and pages of listings.

Moreover, sellers are taking significant hits. Last night I found quite a few condos purchased in 2005 that were now selling for $40K to $60K less!

I too had a lot of pressure on me to buy. I’m so glad I stuck to my guns, and waited it out. That $40K would have been a couple of years worth of payments down the drain for sure.

I think the condo market’s selling prices are going to hit fundamentals (in line with rents) in the next 6 months. Some are already, but I wouldn’t want to live in those areas.

A little longer wait is not going to kill any of us.

Lindismith,

I am watching Hillcrest/Bankers hill condos pretty closely as well. It seems that the sub 1000 sq ft are getting clobbered. I’d say over 50% of the sub 1000 are listing at a loss. I’ve seen many 50-100K losses off of peak.

Also if you notice the the inventory is probably close to 15 months if you count all the newly developed that they are not listing. Plus Deca which is schedualed to be finnished in sept I with another 187 units. Ughh… It’s ugly.

Interesting watching all the bank owned undercut peak buyers that are trying to sell at what they bought it for.

I see a fundementals approching quickly as well maybe less than 12 months.