[quote=SD Realtor]I believe that we will indeed see continued depreciation in the high end market. The question is how much. My wife and I like Birdrock a lot and back in 02 we toyed with the idea of moving there and regretfully did not.
To be honest I think you are overpaying for the home however you are purchasing smack in the middle of a spring rally. if you are intending on holding for 10 years like you implied I tend to think that you will have an opportunity to not be underwater at some point in that timespan. If financial considerations are the only factor then it is a no brainer, do not buy. Only you can measure the decision of lifestyle verses financials. You already mentioned that your current rent is higher then what this payment will be. Did you include property tax as well?
I will tell you that Birdrock is a great place to live. I will also tell you that other opportunities will arise but you will have to be patient. There are always more homes that come along, however the good ones seem to not come along to often. If you are trying to guess what the bottom will be for la jolla and Birdrock…hard to say…right now it is seeing more demand then in the past year or two but I think another 10 to 20 percent is not impossible iF things really crap out.[/quote]
Dammit.
I hate when Adam says what I was thinking faster and better than I did.
Also, bear in mind that the product in questions here only has to drop a small amount in asking to create effective demand (as your story illustrates).
This is very different than the areas I focus on where a drop of 40-60% from peak is often required to generate interest.
Even if you have to sell suddenly in the next 2 years, it is not clear to me that you would be looking at such a large loss (relatively speaking). Do bear in mind that these are not interchangeable goods (and therefore not a “perfect” market in an econometric sense). Also, timing the absolute bottom for your particular micro market is the kind of exercise that often ends up leading to a lobotomy.
This is a fancy way of saying that if you like an item and it is affordable and cheap (relative to its market niche), then market timing becomes more of a game than an actual strategy.
