3B/2B homes in Mira Mesa to be under $300K soon?

[an]

FLU, it all depends on which part of MM. But the rent of a SFR 3/2 1300 sq-ft should fetch around 1600-1800/month. A 2bed/2bath apartment should fetch around 1300-1500/month to give some perspective.

[DWCAP]

FLU, I rent a place in a better location with a very similar house, in the middle price range asianautica quoted. I moved in October 2006 and my rent hasnt and wont budge till at minimum November 2008. The house is nice, but not great. It sat empty for 2 months after the last tenant moved out. I really wont pay much more than I do now, I have seen essentally the same thing, but with a smaller yard (which is now big and really unused) for less.
I tried to do the math, and I cant see how the numbers work out unless the purchase price falls below 275k. At 275k, with a 10-20% down it starts to break even at todays rents, but dont expect much cash flow or return on down payment (lost opertunity). So basically this house needs to fall ANOTHER 20% before it begins to make sense as a rental, unless you dont mind a negative cash flow for a few years. I kinda ask why take that loss? We all know this isnt the bottom.

[DWCAP]

FLU, I rent a place in a better location with a very similar house, in the middle price range asianautica quoted. I moved in October 2006 and my rent hasnt and wont budge till at minimum November 2008. The house is nice, but not great. It sat empty for 2 months after the last tenant moved out. I really wont pay much more than I do now, I have seen essentally the same thing, but with a smaller yard (which is now big and really unused) for less.
I tried to do the math, and I cant see how the numbers work out unless the purchase price falls below 275k. At 275k, with a 10-20% down it starts to break even at todays rents, but dont expect much cash flow or return on down payment (lost opertunity). So basically this house needs to fall ANOTHER 20% before it begins to make sense as a rental, unless you dont mind a negative cash flow for a few years. I kinda ask why take that loss? We all know this isnt the bottom.

[DWCAP]

FLU, I rent a place in a better location with a very similar house, in the middle price range asianautica quoted. I moved in October 2006 and my rent hasnt and wont budge till at minimum November 2008. The house is nice, but not great. It sat empty for 2 months after the last tenant moved out. I really wont pay much more than I do now, I have seen essentally the same thing, but with a smaller yard (which is now big and really unused) for less.
I tried to do the math, and I cant see how the numbers work out unless the purchase price falls below 275k. At 275k, with a 10-20% down it starts to break even at todays rents, but dont expect much cash flow or return on down payment (lost opertunity). So basically this house needs to fall ANOTHER 20% before it begins to make sense as a rental, unless you dont mind a negative cash flow for a few years. I kinda ask why take that loss? We all know this isnt the bottom.

[DWCAP]

FLU, I rent a place in a better location with a very similar house, in the middle price range asianautica quoted. I moved in October 2006 and my rent hasnt and wont budge till at minimum November 2008. The house is nice, but not great. It sat empty for 2 months after the last tenant moved out. I really wont pay much more than I do now, I have seen essentally the same thing, but with a smaller yard (which is now big and really unused) for less.
I tried to do the math, and I cant see how the numbers work out unless the purchase price falls below 275k. At 275k, with a 10-20% down it starts to break even at todays rents, but dont expect much cash flow or return on down payment (lost opertunity). So basically this house needs to fall ANOTHER 20% before it begins to make sense as a rental, unless you dont mind a negative cash flow for a few years. I kinda ask why take that loss? We all know this isnt the bottom.

[DWCAP]

FLU, I rent a place in a better location with a very similar house, in the middle price range asianautica quoted. I moved in October 2006 and my rent hasnt and wont budge till at minimum November 2008. The house is nice, but not great. It sat empty for 2 months after the last tenant moved out. I really wont pay much more than I do now, I have seen essentally the same thing, but with a smaller yard (which is now big and really unused) for less.
I tried to do the math, and I cant see how the numbers work out unless the purchase price falls below 275k. At 275k, with a 10-20% down it starts to break even at todays rents, but dont expect much cash flow or return on down payment (lost opertunity). So basically this house needs to fall ANOTHER 20% before it begins to make sense as a rental, unless you dont mind a negative cash flow for a few years. I kinda ask why take that loss? We all know this isnt the bottom.

[Eugene]

I’m curious why you think it only needs another 10% haircut. Median household income is 60k.

Here’s my reasoning. Median resale price of a detached house in MM in 2000 was around 240k. Average interest rate on a conforming 30-year fixed mortgage was 8.1% (monthly payment $740 per $100,000 borrowed).

Today interest rates are around 5.8% or less ($585 per $100,000), incomes are up 30%. You get the same level affordability if median price is 240k * (740/585) * 1.30 = $395k. Monthly payment $1850, property tax $300-350, interest deduction at least $450.

December median was around 440k.

Two caveats. First, some of the 30% increase in incomes is bubble money, it may go away. Second, 5.8% interest rates may not stick around for too long.

P.S.
average detached sales price in 92126 in December 2000: $265k

average detached sales price in 92126 in December 2007: $458k

[Eugene]

I’m curious why you think it only needs another 10% haircut. Median household income is 60k.

Here’s my reasoning. Median resale price of a detached house in MM in 2000 was around 240k. Average interest rate on a conforming 30-year fixed mortgage was 8.1% (monthly payment $740 per $100,000 borrowed).

Today interest rates are around 5.8% or less ($585 per $100,000), incomes are up 30%. You get the same level affordability if median price is 240k * (740/585) * 1.30 = $395k. Monthly payment $1850, property tax $300-350, interest deduction at least $450.

December median was around 440k.

Two caveats. First, some of the 30% increase in incomes is bubble money, it may go away. Second, 5.8% interest rates may not stick around for too long.

P.S.
average detached sales price in 92126 in December 2000: $265k

average detached sales price in 92126 in December 2007: $458k

[Eugene]

I’m curious why you think it only needs another 10% haircut. Median household income is 60k.

Here’s my reasoning. Median resale price of a detached house in MM in 2000 was around 240k. Average interest rate on a conforming 30-year fixed mortgage was 8.1% (monthly payment $740 per $100,000 borrowed).

Today interest rates are around 5.8% or less ($585 per $100,000), incomes are up 30%. You get the same level affordability if median price is 240k * (740/585) * 1.30 = $395k. Monthly payment $1850, property tax $300-350, interest deduction at least $450.

December median was around 440k.

Two caveats. First, some of the 30% increase in incomes is bubble money, it may go away. Second, 5.8% interest rates may not stick around for too long.

P.S.
average detached sales price in 92126 in December 2000: $265k

average detached sales price in 92126 in December 2007: $458k

[Eugene]

I’m curious why you think it only needs another 10% haircut. Median household income is 60k.

Here’s my reasoning. Median resale price of a detached house in MM in 2000 was around 240k. Average interest rate on a conforming 30-year fixed mortgage was 8.1% (monthly payment $740 per $100,000 borrowed).

Today interest rates are around 5.8% or less ($585 per $100,000), incomes are up 30%. You get the same level affordability if median price is 240k * (740/585) * 1.30 = $395k. Monthly payment $1850, property tax $300-350, interest deduction at least $450.

December median was around 440k.

Two caveats. First, some of the 30% increase in incomes is bubble money, it may go away. Second, 5.8% interest rates may not stick around for too long.

P.S.
average detached sales price in 92126 in December 2000: $265k

average detached sales price in 92126 in December 2007: $458k

[Eugene]

I’m curious why you think it only needs another 10% haircut. Median household income is 60k.

Here’s my reasoning. Median resale price of a detached house in MM in 2000 was around 240k. Average interest rate on a conforming 30-year fixed mortgage was 8.1% (monthly payment $740 per $100,000 borrowed).

Today interest rates are around 5.8% or less ($585 per $100,000), incomes are up 30%. You get the same level affordability if median price is 240k * (740/585) * 1.30 = $395k. Monthly payment $1850, property tax $300-350, interest deduction at least $450.

December median was around 440k.

Two caveats. First, some of the 30% increase in incomes is bubble money, it may go away. Second, 5.8% interest rates may not stick around for too long.

P.S.
average detached sales price in 92126 in December 2000: $265k

average detached sales price in 92126 in December 2007: $458k

[sd_bear]

Just curious – where did you find that incomes grew 30% in this area in 7 years? My gut says that is pretty high, though I don’t know where to research it. If it did I’m sure its very likely much of it could be bubble money.

This math also takes into account that rents remain stable while housing goes down. Won’t rents will be going down as well? I guess its all speculation anyway.

[sd_bear]

Just curious – where did you find that incomes grew 30% in this area in 7 years? My gut says that is pretty high, though I don’t know where to research it. If it did I’m sure its very likely much of it could be bubble money.

This math also takes into account that rents remain stable while housing goes down. Won’t rents will be going down as well? I guess its all speculation anyway.

[sd_bear]

Just curious – where did you find that incomes grew 30% in this area in 7 years? My gut says that is pretty high, though I don’t know where to research it. If it did I’m sure its very likely much of it could be bubble money.

This math also takes into account that rents remain stable while housing goes down. Won’t rents will be going down as well? I guess its all speculation anyway.

[sd_bear]

Just curious – where did you find that incomes grew 30% in this area in 7 years? My gut says that is pretty high, though I don’t know where to research it. If it did I’m sure its very likely much of it could be bubble money.

This math also takes into account that rents remain stable while housing goes down. Won’t rents will be going down as well? I guess its all speculation anyway.

[Author]

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