[quote=EconProf]Go house-hunting and find a house.
Take 1% of its value.
Add that to the planned monthly cost of ownership.
PS: 1% is conservative. 1 1/2 percent more likely, 2% within the realm of possibility.[/quote]
Econ prof you say this on multiple threads.
I don’t think that it is truly applicable.
The difference in depreciation varies wildly from one micromarket to the next.
Again, you will see a stronger depreciation in certain areas (eg: Chula Vista) which in many cases means you could get a place now (or later) that would carry with little down.
This headline (the 1%) would work if we were dealing with a perfect market (interchangeable goods and complete information) but we are not.
We are dealing with a market that has dissimilar commodities, multiple non- or semi- comparable market sites, and wildly inconsistant levels of information. I don’t mean to get all John Nash on you but mapping this in Game Theory would look like a spiderweb.
I stand by what I said before. Market and econ fundamentals really are what needs to guide personal action. When or if you buy, make sure the payment is reasonable and that you are not spending wildly more than what market rent would be (in case you have to rent it). And make sure you are buying something you think you will enjoy for a few years.
Again, as prices drop further, a greater portion of them will be in less desirable areas. I would question the expertise of anyone saying to pass up a good deal in OB now for a great deal in Mira Mesa in a year.
Timing the downturn is about as advisable as timing the boom. That effort did not work out so well.
