[quote=CONCHO] Totally agree. But I think what most of the folks on this board are saying is — “Well, buying is still more expensive than renting so I guess I will continue to rent”. Now in areas like Temecula that may not be true anymore because we’ve already had huge price declines there. If I could live in Temecula I would be looking seriously at buying now.[/quote]
I am living in Temecula right now (as a renter) and I am looking seriously at buying. But I think the point most people are trying to make is that although the price/rent multiplier works in some place now, the rent is going decrease. It is a serious possibility in place like Temecula where it is simply over-built. If you go to craigslist etc, you can see the rent declining trend. Heck, some of the rental place are offering 2 months free for 18 months lease now. It is hard to rely on price/rent multiplier if the rent is not stabilized. San Diego (even Temecula, because many people in Temecula work in San Diego) is holding up pretty well, because its job market is still doing OK. Wait until QCOM starts to layoff.
I think the only reason I’d be buying in this environment is for a nice house. A nice house does not come by so often. If I can tolerate an average house, I will definitely wait…even in Temecula.
Also, I am surprised that people still hold the notion of “I can comfortably buy a house if I can save 20% DP”. In this environment, I think you will need at least 40% or so. 20% for DP and 20% for emergency fund in case of layoff. The economic picture is so dark that everyone should be serious about having at least 1 year of emergency cash.
