One of my friends has their Clairemont house on the market right now. Absolutely no activity in a month.
The house is priced well (one of the lowest priced houses on MLS in Clairemont) but not even a nibble. We have talked about lowering the price but don’t think it would make any difference.
The realtor has a flyer showing two ways to buy the house:
1. 20% down and a 5/1 ARM at 6% – monthly PITI $2989
2. 0% down with 5/1 IO ARM at 6.375% plus HELO at 9.15% – monthly PITI $3498
The first time I saw this flyer I laughed at how absurd it would be for anyone to pay that kind of money for a small, 50 year old house in Clairemont.
When I gave it some more thought these questions came to mind:
1. who has 20% down these days ($90-100K)?
2. why would anyone pay $3000/mo for a house that they can rent for $1700/mo?
I expect houses like this one to be available for about $275K (2006 dollars) when the market finally bottoms.
