Bear makes some good points regarding caution.
I do not entirely agree and will respond based on my experiences (mostly condos).
[quote=San Diego RE Bear]I recommend waiting too. This is going to be a very interesting year as the Option, Alt-A and Prime ARMs start adjusting in earnest and the high end begins to fall. My guess is that in the next six months the banks start capitulating and pricing the foreclosures in a more realistic manner. (Or at least start releasing the darn things.)
And you really need to think about buying a condo. 1.) HOA’s are a landmine – do you know how well funded it is? How many owners are no longer paying? The possibility of a “special assessment” for thousands, possibly even tens of thousands?
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This CAN be true but really bears investigation. If you make an offer and it gets accepted, your buyer’s agent should be obtaining documentation about this within the first week of escrow. If the numbers do not work, then you should walk. The listing agent should be forthcoming about special assessments, regular assessment changes (aka HOA dues), delinquencies, foreclosures and other issues that could effect property value. If your agent, or the listing agent cannot perform, you should consider walking. A reserve study is a cpa’s estimation of how fiscally healthy the hoa is. You should ask for one completed in the last 12 months.
[quote=San Diego RE Bear]
2.) Condos do not hold value or increase in value like SFR’s do. Long-term not as good an investment. Yes, it’s cheaper now but if SFR’s drop and become more affordable do you really want to be stuck in a condo.[/quote]
Generally, this is only partly true. During the boom, the condos increased by a greater percentage than most sfr’s. This is not a hard and fast rule but a good example is the graph that our blogmaster posts showing different tiers of properties. You will notice that the cheapest properties increased (percentage-wise anyhow) the most. Condos typically are the cheapest of the cheap properties (again not always a rule). The preference issue that Bear raises may be legitimate but I personally prefer condos and urban areas(hence my handle). I have lots of friends-and clients-who feel the same.
[quote=San Diego RE Bear]
3.) Rent a condo in the complex you are looking at – you might find have people all around you a bit of a culture shock after your own (granted tiny) home.
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That is a very good idea. Always do that.
Here is a good link for tenants to avoid getting screwed. http://www.dca.ca.gov/publications/landlordbook/index.shtml
[quote=San Diego RE Bear]
Hope that helps and best of luck![/quote]
