[quote=nostradamus]I’ve often wondered who the heck would buy now as well.
People wouldn’t buy because homes are still overpriced. Give me as many incentives as you like, a lemon is still a lemon.
Having money or having a job does not mean you would or should throw money away buying a house.
Renting is cheaper. You can rent the average $500k crap shack in SD for what, $2k max per month? That’s being generous of course. In 1 year you paid $24k for rent then. Say you buy it instead. IMO you will lose at least 10% in one year. That’s $50k. Plus insurance, upkeep, tax, etc. etc. etc. Sure you might get a few thousand out of tax deductions (again being generous). Still doesn’t compensate for the difference.
I say if you’re on the fence, rent a house with just your *minimal* living requirements. Cheap. Re-evaluate buying in the winter. If not, wait tell next winter. Repeat. You’ll be happy you did.[/quote]
A year ago you would have been right on the money.
In coastal areas, I think you probably still are. If the areas you’re looking at buying in are places like 4S, CV, Encinitas, etc, I don’t think those areas are particularly close to bottoming out. But a 500K place in many areas now is well above 2K in rent. A lot of north and east county, mira mesa, and the other middle class areas I think are now pretty far down in terms of valuation.
The townhome we’re currently purchasing will cost us a net 360K (after incentives and tax credits are taken into account) and is just over 2200 sq. ft. Rent for a similarly sized townhome in the area would run $1/sq ft, or about 2200/mo. It’s not investment grade in terms of return, but it’s pretty much rent neutral at that price.
