March 1, 2006 at 10:55 AM #6391
I began looking at a condo to buy 7 months ago, prior to knowing much about where the market was. Piggington has helped me immensely, Rich particularly, taking the time to answer my buggy e-mails.
I decided to wait and as I was thumbing through my local newspaper last weekend I saw an ad for some conversions which caught my eye, so I decided to get some more information.
http://www.cantabriacondos.com – I’ve learned from the reps at the place that the 2 bedroom 1 baths started at 319k, and now have moved down to 284,900.
They are at the end of 56 right before 15, 7 miles from my work in Del Mar. I consider this a much better area then Ocenaisde. I decided to stop into a new development in Oceanside which has 2 bedroom 2 baths 900 sqft. It was 392k, yes.. 392k, I couldn’t have guessed that high of a number for what you are getting. They were not even gated.
I should also mention that when I began looking & months ago), I was working with several lenders whom were all pushing me into ARMS and IO. The quotes I’ve been getting this go around have all been 30 year fixed. I wonder why?
I doubt I’ll buy right now, but wanted everyones opinion on that area. 56 seemed under developed as of yet. Near lots of technology / jobs, also near freeways.
The buildings are from 81, roof has not been replaced but repaired, no new plumbing or anything installed, but everything repaired. I know they have to pass building inspections to sell these things. Perhaps they’ll dip down to 220 or so *fingers crossed*March 1, 2006 at 11:06 AM #23540powaysellerParticipant
We looked at houses in Rancho Penasquitos around early 2000, before Hwy56 went through, thinking that the home prices would jump after Hwy56 was completed. I don’t think it really made a difference, though. RP is in the Poway School District, yet is much nearer the coast than Poway, making the climate much more temperate. However, RP housing is so old, and the neighborhoods looked so much like run-down rental areas (w/ lots of old cars parked along every street), that we passed on that and ended up buying a house in the inland area.
I think you’ll find a lot more options in your price range in a few years. Heck, you might even be able to afford a condo in Del Mar or Oceanside in 2010.
Interesting, about the lenders. I think they’re getting worried about their exposure. The CEO of Countrywide stated that from summer 2006 and going over the following 14 months, there’ll be lots of ARMs resetting, and people won’t be able to afford the payments and will foreclose. They’re trying to help their customers get into fixed mortgages. For some reason, the rates on the adjustables aren’t that much lower now. I suppose the investors want a risk premium. Everyone is realizing those loans are too risky.March 1, 2006 at 1:13 PM #23541
Thanks for the insight. It’s a good time to not be tied down in an ARM. 2010? Do you think the market really will take that long to correct?March 1, 2006 at 1:21 PM #23542AnonymousGuest
I know the conversion that you are talking about. I’ve received way too many flyers in the mail from them over the past year. The complex sits right next to the 56 and all the traffic. The place has been repainted and the clubhouse remodelled. Essentially, you would be buying an old redecorated apartment that still has the exact same neighbor and freeway noise issues from its rental days. A little poking around online turned up several units that have been listed on the MLS, most of them showing 139 days so far.
I think you’ll be able to find something nicer and better later on. I’m certainly not buying there.
(Not investment advice.)March 1, 2006 at 1:45 PM #23543
I saw these as well, thats why the 284 price was suprising to me. The finance officer there told me they are having trouble selling (no crap), so they lowered the price. I was going to go check it out this weekend.March 1, 2006 at 1:59 PM #23544powaysellerParticipant
NOT Investment Advice! The price decline has just started. Go look, keep looking to keep your pulse on the market, but buying now you would be buying at just past the top of the biggest housing bubble in history. Read the Bubble Primer, look at the graphs. Past corrections took 4 – 8 years, or something like that. Make sure you get only a 15 yr or 30 yr fixed, because ARM payments can double after the introductory period ends. I just sold my house, and am renting until the correction ends. Keeping my cash ready to buy when the time is right. Again, not investment advice, just common sense based on history.March 1, 2006 at 2:13 PM #23545AnonymousGuest
The price drop should be no surprise. Condo conversions across the county are having to lower their prices or give ridiculous incentives. In UTC, the prestige marketing has given way to sign throwers all over and price reductions of $40k+. Things are only getting started.
(Not investment advice.)March 1, 2006 at 2:13 PM #23546
Indeed it has started to fall. With 19k properties on the market and 250 added a week I think we’re in for some interesting times. I’m a bit worried about rates rising and not getting in on a decent one, but I’ll continue to wait.March 1, 2006 at 2:57 PM #23547AnonymousGuest
I have just a couple of comments/observations. First, don’t buy something you don’t really want to own – because most likely, if you aren’t that enamored to it you may find that no one else is that excited by it when/if you go to sell.
Secondly, it seems to me that condo conversions are just “flips” on a large scale. I imagine you can estimate how much profit the developer (flipper) has in the deal and that will tell you were their pain point is.
With regard to financing, most of the lenders are trying to “sell” you a loan – most of them could care less about you so your best course of action is to figure out what works best for you and let that be your guide. They may be pushing fixed rates right now because that (they believe) is the easiest sale.
I didn’t intend to be “preachy” but don’t let someone sell you on something and remember, when you are purchasing an older condo make sure the reserves make sense so you don’t get hit with a special assessment for some major repairs in the not too distant future.March 1, 2006 at 4:24 PM #23550
Thanks for the information Larry, I appreciate it.
This would be my first place. I’m 25 and am not so much concerened about flipping or making money on it. I live in Vista and commute to Del Mar daily. I’ll always work down in this area because thats where my job market is.
Goal 1 is to be closer to work. Just the money I’d save on gas alone is nice. Goal 2 is, like you said, to make sure I am happy with what I buy. I have a personal threshold I’ve set and guidelines which are strict but I think doable in the near future. Thus being a nice 2 bedroom condo within 5 miles of my work for 250k. These ones are conversions from 81 and are 284 and 7 miles away.
Carmel Pointe which is like, 2 blocks from my work has 2 bedrooms for 420 right now, which is just ridiculous. 3 bedrooms in the upper 500’s. I’d imagine those will be coming down, I haven’t researched that development in a few months.
I hear you about the cost of roof, those were the first questions I asked. The roof and plumbing were not replaced which is a concern.
Anymore tips, keep them coming.March 1, 2006 at 9:03 PM #23553sdduuuudeParticipant
This whole post is not investment advice.
STEP 1) Look at the monthly cost of renting a place near those you would like to buy, but can’t afford.
STEP 2) Subtract that rent cost from the maximum house payment you think you can afford (include principal, interest, insurance, PMI and property tax).
STEP 3) Rent in a good place closer to work, and put the difference between your rent and your max payment in the bank. Build up a down payment and wait for the market to drop for 3 years, or 5 years. Buy a subscription to this site and when Prof. Piggington decides to buy, the market is probably pretty low.
STEP 4) Don’t panic buy when rates increase. As you get older, you will find you can afford more and more each month. It is OK to buy when rates are high if you can afford the payment because you can always refi later when rates drop.
So, lets say you can rent a place for $1,500 per month, and you can afford a $2,000 payment right now. Go rent a place for $1,500 and put $500 in the bank EVERY MONTH.
Look to rent a place from a landlord who has owned the place for a long time and doesn’t have more than a couple rental properties. If you rent from someone who bought recently, they will be need a very high rent to keep themselves afloat and you might find the place sold out from underneath you in a panic sale.
LLs who have owned for a long time are going to look for a good renter, rather than lots of cash. Wear business casual clothes when you view the property, look clean, etc.
DMarch 3, 2006 at 2:53 PM #23555AnonymousGuest
I rent not too far from Cantabria… that used to be an Avalon complex, if I remember correctly. When they started to sell, I wasn’t impressed, as those were just about as “apartment-like” as you could get in a condo.
But relative to the rest of the area, the prices are indeed rock-bottom. You of course get what you pay for… although in this environment, you get a lot less.
Then again, for where you work, it’s not a bad drive – certainly better than the Oceanside commute.
I have no idea exactly what they’re thinking, but DR Horton is building a huge hotel-looking thing on the 56 at Camino Del Sur in Torrey Highlands, next to their townhomes.
As many of those ~1050 sf townhomes have been on the market for quite awhile (all listed over $400k but they’ve begun to reduce), you may look out for what DR Horton does with that new construction. I assume those are meant to be condos, but I have no idea how they will sell them all if that’s the case.
ScottMarch 3, 2006 at 3:57 PM #23556
Thanks for the great insight Scott, I appreciate it. I’m going to cruise down there over the weekend just to check it out. I have a feeling they will go lower. Mls has them on for 339, they’re presently 284,900. I actually didn’t think they were as high as 339. Wow…December 5, 2006 at 3:40 PM #41169AnonymousGuest
I started looking at PQ last week and went to Cantabria. The sales lady told me that they still have over 40+ units that they are trying to sell. Of course, throwing in incentives like free first year HOA. But HOA is $244! Definetely hear freeway noises from inside the apartment. I work in Poway but live in Santee, so a shorter commute would be great.December 5, 2006 at 4:51 PM #41175no_such_realityParticipant
Are they still at $284K?
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