Matt, not to defend 23109 but to clarify, his cheap rental days were numbered and his landlord would not renew his lease. His rationale included that he didn’t want to move and couldn’t find a comparable rental for what he was paying so he was comparing his purchase to higher rents that he was finding out there.
I share some of his frustrations with the lack of price declines in Temecula proper and the better locations within the city because until new guy reported his deal you had to leave the city to see significant declines. While I don’t think 23109 is drinking full strength Kool-aid, he take take a swig of the diet Kool-aid. He initially posted about his current house being too small and not having enough rooms but when new guy got a McMansion in Harveston for what he thought his place would sell for three months ago, then it was all about location. He did good, not great, better than his neighbors, not as good as his future neighbors, I give 23109 a C- and Newguy gets a B+ (23109 would have gotten a C+ if he was going 20% down, fixed).
They both paid 20-30% below peak and there is too much support for it to go below 50% peak across the board for very long (we will find examples and hawk will get free beer, but it won’t be across the board for a protracted amount of time). So they will suffer declines in the near term but won’t get killed like the 04-06 buyers will. Neither will go down more than 100k from their strike price but there will be a time at the bottom where 23109’s is in the 200’s and new guys is in the 300’s, but that will be as bad as it gets and it wont stay there forever. The main difference between the two transactions is the down payment and financing, newguy’s debt is the same as the doomsday price, making his bet safer. I agree that 23109 is not going to be paying the same as rent and unless he had been saving $500-$1000 a month while renting he may find himself in trouble after purchasing. Income tax deduction is overated, maintenance, repair, hoa, etc. almost cancels it out. You should buy for a price that you have proven you can rent for. If you rent for $1600 and can live but not can’t save much at that level, then that should be your target mortgage.
