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davelj.
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January 13, 2009 at 11:47 AM #328512January 13, 2009 at 12:34 PM #328028
carlsbadworker
ParticipantI think rent has very direct correlation with income. So with unemployment rate rising, the rent will surely drop. However, unless you are predicting 20%+ unemployment rate, there is not much rooms for rents to drop especially in low-price area. Also I always ignore the current house rent price but prefer to use 3-bedrooms apartment rental price. I have never seen apartment rental goes down by much although they sometimes offer promotions to effectively lower their rents. But that’s all temporary, and if you expect to live in the house yourself, you should be able to ride it out.
So I agree with ANN above, although I would change his formula a little bit. I think it is prefect safe to buy if PITI < 3-bedroom-rents for self use. But for investment, I think I would like to see mortgage < 50%* rents (assume 20% down), we are not there yet. That's my floor of real estate market price in doomsday scenario (i.e. another 25-30% drop in town like Temecula). If I still have job at that time, I would happily pick up an investment property at that time. If I don't have a job at that time, I would have wished that I had bought now when I still have verifiable W2 income to get the best mortgage rate. I will just use my remaining cash to ride out the down turn instead of being able to have a rental property to my name. The economy will recover one day or another. I believe at least we agree on that, right?
January 13, 2009 at 12:34 PM #328363carlsbadworker
ParticipantI think rent has very direct correlation with income. So with unemployment rate rising, the rent will surely drop. However, unless you are predicting 20%+ unemployment rate, there is not much rooms for rents to drop especially in low-price area. Also I always ignore the current house rent price but prefer to use 3-bedrooms apartment rental price. I have never seen apartment rental goes down by much although they sometimes offer promotions to effectively lower their rents. But that’s all temporary, and if you expect to live in the house yourself, you should be able to ride it out.
So I agree with ANN above, although I would change his formula a little bit. I think it is prefect safe to buy if PITI < 3-bedroom-rents for self use. But for investment, I think I would like to see mortgage < 50%* rents (assume 20% down), we are not there yet. That's my floor of real estate market price in doomsday scenario (i.e. another 25-30% drop in town like Temecula). If I still have job at that time, I would happily pick up an investment property at that time. If I don't have a job at that time, I would have wished that I had bought now when I still have verifiable W2 income to get the best mortgage rate. I will just use my remaining cash to ride out the down turn instead of being able to have a rental property to my name. The economy will recover one day or another. I believe at least we agree on that, right?
January 13, 2009 at 12:34 PM #328435carlsbadworker
ParticipantI think rent has very direct correlation with income. So with unemployment rate rising, the rent will surely drop. However, unless you are predicting 20%+ unemployment rate, there is not much rooms for rents to drop especially in low-price area. Also I always ignore the current house rent price but prefer to use 3-bedrooms apartment rental price. I have never seen apartment rental goes down by much although they sometimes offer promotions to effectively lower their rents. But that’s all temporary, and if you expect to live in the house yourself, you should be able to ride it out.
So I agree with ANN above, although I would change his formula a little bit. I think it is prefect safe to buy if PITI < 3-bedroom-rents for self use. But for investment, I think I would like to see mortgage < 50%* rents (assume 20% down), we are not there yet. That's my floor of real estate market price in doomsday scenario (i.e. another 25-30% drop in town like Temecula). If I still have job at that time, I would happily pick up an investment property at that time. If I don't have a job at that time, I would have wished that I had bought now when I still have verifiable W2 income to get the best mortgage rate. I will just use my remaining cash to ride out the down turn instead of being able to have a rental property to my name. The economy will recover one day or another. I believe at least we agree on that, right?
January 13, 2009 at 12:34 PM #328458carlsbadworker
ParticipantI think rent has very direct correlation with income. So with unemployment rate rising, the rent will surely drop. However, unless you are predicting 20%+ unemployment rate, there is not much rooms for rents to drop especially in low-price area. Also I always ignore the current house rent price but prefer to use 3-bedrooms apartment rental price. I have never seen apartment rental goes down by much although they sometimes offer promotions to effectively lower their rents. But that’s all temporary, and if you expect to live in the house yourself, you should be able to ride it out.
So I agree with ANN above, although I would change his formula a little bit. I think it is prefect safe to buy if PITI < 3-bedroom-rents for self use. But for investment, I think I would like to see mortgage < 50%* rents (assume 20% down), we are not there yet. That's my floor of real estate market price in doomsday scenario (i.e. another 25-30% drop in town like Temecula). If I still have job at that time, I would happily pick up an investment property at that time. If I don't have a job at that time, I would have wished that I had bought now when I still have verifiable W2 income to get the best mortgage rate. I will just use my remaining cash to ride out the down turn instead of being able to have a rental property to my name. The economy will recover one day or another. I believe at least we agree on that, right?
January 13, 2009 at 12:34 PM #328542carlsbadworker
ParticipantI think rent has very direct correlation with income. So with unemployment rate rising, the rent will surely drop. However, unless you are predicting 20%+ unemployment rate, there is not much rooms for rents to drop especially in low-price area. Also I always ignore the current house rent price but prefer to use 3-bedrooms apartment rental price. I have never seen apartment rental goes down by much although they sometimes offer promotions to effectively lower their rents. But that’s all temporary, and if you expect to live in the house yourself, you should be able to ride it out.
So I agree with ANN above, although I would change his formula a little bit. I think it is prefect safe to buy if PITI < 3-bedroom-rents for self use. But for investment, I think I would like to see mortgage < 50%* rents (assume 20% down), we are not there yet. That's my floor of real estate market price in doomsday scenario (i.e. another 25-30% drop in town like Temecula). If I still have job at that time, I would happily pick up an investment property at that time. If I don't have a job at that time, I would have wished that I had bought now when I still have verifiable W2 income to get the best mortgage rate. I will just use my remaining cash to ride out the down turn instead of being able to have a rental property to my name. The economy will recover one day or another. I believe at least we agree on that, right?
January 13, 2009 at 1:51 PM #328062an
Participantcarlsbadworker, the only problem with 3-bedrooms apartment is that they’re very rare. As a personal use, I think compare to rent of similar house is better, since you have to live somewhere and you have to compare apple to apple in regards to the place you’ll be living in.
San Diego, I think, is a long way from <50%*rent, if it ever get there. However, places like Fresno is already there.
January 13, 2009 at 1:51 PM #328399an
Participantcarlsbadworker, the only problem with 3-bedrooms apartment is that they’re very rare. As a personal use, I think compare to rent of similar house is better, since you have to live somewhere and you have to compare apple to apple in regards to the place you’ll be living in.
San Diego, I think, is a long way from <50%*rent, if it ever get there. However, places like Fresno is already there.
January 13, 2009 at 1:51 PM #328470an
Participantcarlsbadworker, the only problem with 3-bedrooms apartment is that they’re very rare. As a personal use, I think compare to rent of similar house is better, since you have to live somewhere and you have to compare apple to apple in regards to the place you’ll be living in.
San Diego, I think, is a long way from <50%*rent, if it ever get there. However, places like Fresno is already there.
January 13, 2009 at 1:51 PM #328493an
Participantcarlsbadworker, the only problem with 3-bedrooms apartment is that they’re very rare. As a personal use, I think compare to rent of similar house is better, since you have to live somewhere and you have to compare apple to apple in regards to the place you’ll be living in.
San Diego, I think, is a long way from <50%*rent, if it ever get there. However, places like Fresno is already there.
January 13, 2009 at 1:51 PM #328577an
Participantcarlsbadworker, the only problem with 3-bedrooms apartment is that they’re very rare. As a personal use, I think compare to rent of similar house is better, since you have to live somewhere and you have to compare apple to apple in regards to the place you’ll be living in.
San Diego, I think, is a long way from <50%*rent, if it ever get there. However, places like Fresno is already there.
January 13, 2009 at 2:37 PM #328077sdduuuude
Participant[quote=carlsbadworker]The economy will recover one day or another. I believe at least we agree on that, right?
[/quote]One day, I guess.
What is it about “Japan had 0% rates and still lost a decade” that people don’t understand ?
January 13, 2009 at 2:37 PM #328413sdduuuude
Participant[quote=carlsbadworker]The economy will recover one day or another. I believe at least we agree on that, right?
[/quote]One day, I guess.
What is it about “Japan had 0% rates and still lost a decade” that people don’t understand ?
January 13, 2009 at 2:37 PM #328485sdduuuude
Participant[quote=carlsbadworker]The economy will recover one day or another. I believe at least we agree on that, right?
[/quote]One day, I guess.
What is it about “Japan had 0% rates and still lost a decade” that people don’t understand ?
January 13, 2009 at 2:37 PM #328508sdduuuude
Participant[quote=carlsbadworker]The economy will recover one day or another. I believe at least we agree on that, right?
[/quote]One day, I guess.
What is it about “Japan had 0% rates and still lost a decade” that people don’t understand ?
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