I forgot the most important factor. My rent is $1,800 per month.
Now, I certainly can qualify for 380k. I can qualify for more than that. I like the complex I’m renting in. I like the area.
Should I buy? Should I buy a house I can afford elsewhere that has seen a greater decline b/c I should buy and live somewhere not necessarily where I would like to live just for the sake of buying and taking advantage of low rates and low prices? I already own free and clear some investment properties.
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Clairemont, middle class though it is (having lived in both places, I’d say it compares very closely demographically (at least economically) to Mira Mesa), is too close to the coast. It hasn’t taken enough depreciation yet to make sense rent vs. buy.
If you’re set on living at or near the coast, I’d say you’re best bet is to continue to wait on the sidelines for awhile longer. I’ve noticed that the only people buying who seem to have thought this reasonably through are those people buying in the inland or north county areas that have seen massive drops over the past year or two.
Edited:
Just to put into perspective – the townhome me and the wife are purchasing is roughly the same price as the one you’re considering (390K), but is 4br/3.5ba 2200 square feet that would rent for about $2200-2300/mo – and the HOA on it is only $118/mo (with no mello-roos). That’s above what an investor would look for, but is clearly balanced well with rents in the area (actually, a bit cheaper than renting once you do the math)…and the builder’s paying 24K towards closing costs and interest rate buydowns.
If yours rents for 1800/mo, I’d think that seeing it at about 310-320K would a similar ratio to what we’re looking at in the inland valleys right now.
