Falling interest rates

[SD Realtor]

I don’t believe it pencils out yet FSD. It is actually a 4/2 and it is not as much as a POS as some of the other homes there. Also, I have two buyers looking in that area and I have been there alot in the past few weeks and there are alot of folks who have given up and the for sale signs have been replaced by for rent signs. More then a few of the homes we have seen, including this home converted the little 1 car garage into a bedroom. This particular home did it right, they got a permit, built a footing and it was done in a clean manner. Unfortunately my guy wants to convert the room back to a garage.

Getting back to your question taking a quick look on craigslist the prices are all over the place. For sure you could get 2k maybe as much as 2.5k. This particular home is in the Mountain streets just south of balboa and east of genesee.

SD Realtor

[kev374]

If a seller doesn’t want to cut the price to your liking just walk away…chances are VERY high that you will get your price in a year or two. At least one thing is certain, the long term trend for prices is DOWN. There are plenty of factors that will bring prices down and there are ZERO factors right now that will cause appreciation so walking away hurts only the seller, the buyer is king from now on.

The seller was king during the boom but as Newtons law says every action has an equal and opposite reaction 😀

[kev374]

If a seller doesn’t want to cut the price to your liking just walk away…chances are VERY high that you will get your price in a year or two. At least one thing is certain, the long term trend for prices is DOWN. There are plenty of factors that will bring prices down and there are ZERO factors right now that will cause appreciation so walking away hurts only the seller, the buyer is king from now on.

The seller was king during the boom but as Newtons law says every action has an equal and opposite reaction 😀

[kev374]

If a seller doesn’t want to cut the price to your liking just walk away…chances are VERY high that you will get your price in a year or two. At least one thing is certain, the long term trend for prices is DOWN. There are plenty of factors that will bring prices down and there are ZERO factors right now that will cause appreciation so walking away hurts only the seller, the buyer is king from now on.

The seller was king during the boom but as Newtons law says every action has an equal and opposite reaction 😀

[kev374]

If a seller doesn’t want to cut the price to your liking just walk away…chances are VERY high that you will get your price in a year or two. At least one thing is certain, the long term trend for prices is DOWN. There are plenty of factors that will bring prices down and there are ZERO factors right now that will cause appreciation so walking away hurts only the seller, the buyer is king from now on.

The seller was king during the boom but as Newtons law says every action has an equal and opposite reaction 😀

[kev374]

If a seller doesn’t want to cut the price to your liking just walk away…chances are VERY high that you will get your price in a year or two. At least one thing is certain, the long term trend for prices is DOWN. There are plenty of factors that will bring prices down and there are ZERO factors right now that will cause appreciation so walking away hurts only the seller, the buyer is king from now on.

The seller was king during the boom but as Newtons law says every action has an equal and opposite reaction 😀

[(former)FormerSanDiegan]

SD R – Thanks.
I didn’t expect it to pencil out as a rental. However, it is getting closer to penciling out when comparing monthly carrying costs versus renting, (depending on one’s income and tax situation).

I figure the monthly carrying costs for purchasing this at 440K at 6.5% interest and 20% down would be approximately equal to renting a place for $2100 per month

Here’s the monthly numbers …
Principal & interest: 2225
interest portion: ~ 1900 (in the first year)
principal: ~325
property taxes: 460
insurance: 100

Assume a 30% tax benefit from taxes & interest (varies depending on income, other deductions, etc) ..

Monthly after tax costs:
after-tax interest : 1330
principal: 325
after-tax prop tax : 322
insurance : 100

Total : 2077

I used to own a rental property on Mt streets west of genessee. When I sold it in 2001 the rent was 1300 per month. I sold it for 270K. That’s a price/rent ratio of 207.

If this house would rent for at least 2125 per month, it would be a ratio of 207.

I don’t think we are at rent/own equilibrium in that neihborhood on the whole yet. But, it is getting close.
Another 5-10% broad decline in prices and we would solidly be there.

After that, the questions become:

1. How much future depreciation will buyers price into their purchases ? (psychology)
2. Rental rates (which depends on economy and jobs)
3. Interest rates (affects the rent vs. own decision)

[(former)FormerSanDiegan]

SD R – Thanks.
I didn’t expect it to pencil out as a rental. However, it is getting closer to penciling out when comparing monthly carrying costs versus renting, (depending on one’s income and tax situation).

I figure the monthly carrying costs for purchasing this at 440K at 6.5% interest and 20% down would be approximately equal to renting a place for $2100 per month

Here’s the monthly numbers …
Principal & interest: 2225
interest portion: ~ 1900 (in the first year)
principal: ~325
property taxes: 460
insurance: 100

Assume a 30% tax benefit from taxes & interest (varies depending on income, other deductions, etc) ..

Monthly after tax costs:
after-tax interest : 1330
principal: 325
after-tax prop tax : 322
insurance : 100

Total : 2077

I used to own a rental property on Mt streets west of genessee. When I sold it in 2001 the rent was 1300 per month. I sold it for 270K. That’s a price/rent ratio of 207.

If this house would rent for at least 2125 per month, it would be a ratio of 207.

I don’t think we are at rent/own equilibrium in that neihborhood on the whole yet. But, it is getting close.
Another 5-10% broad decline in prices and we would solidly be there.

After that, the questions become:

1. How much future depreciation will buyers price into their purchases ? (psychology)
2. Rental rates (which depends on economy and jobs)
3. Interest rates (affects the rent vs. own decision)

[(former)FormerSanDiegan]

SD R – Thanks.
I didn’t expect it to pencil out as a rental. However, it is getting closer to penciling out when comparing monthly carrying costs versus renting, (depending on one’s income and tax situation).

I figure the monthly carrying costs for purchasing this at 440K at 6.5% interest and 20% down would be approximately equal to renting a place for $2100 per month

Here’s the monthly numbers …
Principal & interest: 2225
interest portion: ~ 1900 (in the first year)
principal: ~325
property taxes: 460
insurance: 100

Assume a 30% tax benefit from taxes & interest (varies depending on income, other deductions, etc) ..

Monthly after tax costs:
after-tax interest : 1330
principal: 325
after-tax prop tax : 322
insurance : 100

Total : 2077

I used to own a rental property on Mt streets west of genessee. When I sold it in 2001 the rent was 1300 per month. I sold it for 270K. That’s a price/rent ratio of 207.

If this house would rent for at least 2125 per month, it would be a ratio of 207.

I don’t think we are at rent/own equilibrium in that neihborhood on the whole yet. But, it is getting close.
Another 5-10% broad decline in prices and we would solidly be there.

After that, the questions become:

1. How much future depreciation will buyers price into their purchases ? (psychology)
2. Rental rates (which depends on economy and jobs)
3. Interest rates (affects the rent vs. own decision)

[(former)FormerSanDiegan]

SD R – Thanks.
I didn’t expect it to pencil out as a rental. However, it is getting closer to penciling out when comparing monthly carrying costs versus renting, (depending on one’s income and tax situation).

I figure the monthly carrying costs for purchasing this at 440K at 6.5% interest and 20% down would be approximately equal to renting a place for $2100 per month

Here’s the monthly numbers …
Principal & interest: 2225
interest portion: ~ 1900 (in the first year)
principal: ~325
property taxes: 460
insurance: 100

Assume a 30% tax benefit from taxes & interest (varies depending on income, other deductions, etc) ..

Monthly after tax costs:
after-tax interest : 1330
principal: 325
after-tax prop tax : 322
insurance : 100

Total : 2077

I used to own a rental property on Mt streets west of genessee. When I sold it in 2001 the rent was 1300 per month. I sold it for 270K. That’s a price/rent ratio of 207.

If this house would rent for at least 2125 per month, it would be a ratio of 207.

I don’t think we are at rent/own equilibrium in that neihborhood on the whole yet. But, it is getting close.
Another 5-10% broad decline in prices and we would solidly be there.

After that, the questions become:

1. How much future depreciation will buyers price into their purchases ? (psychology)
2. Rental rates (which depends on economy and jobs)
3. Interest rates (affects the rent vs. own decision)

[(former)FormerSanDiegan]

SD R – Thanks.
I didn’t expect it to pencil out as a rental. However, it is getting closer to penciling out when comparing monthly carrying costs versus renting, (depending on one’s income and tax situation).

I figure the monthly carrying costs for purchasing this at 440K at 6.5% interest and 20% down would be approximately equal to renting a place for $2100 per month

Here’s the monthly numbers …
Principal & interest: 2225
interest portion: ~ 1900 (in the first year)
principal: ~325
property taxes: 460
insurance: 100

Assume a 30% tax benefit from taxes & interest (varies depending on income, other deductions, etc) ..

Monthly after tax costs:
after-tax interest : 1330
principal: 325
after-tax prop tax : 322
insurance : 100

Total : 2077

I used to own a rental property on Mt streets west of genessee. When I sold it in 2001 the rent was 1300 per month. I sold it for 270K. That’s a price/rent ratio of 207.

If this house would rent for at least 2125 per month, it would be a ratio of 207.

I don’t think we are at rent/own equilibrium in that neihborhood on the whole yet. But, it is getting close.
Another 5-10% broad decline in prices and we would solidly be there.

After that, the questions become:

1. How much future depreciation will buyers price into their purchases ? (psychology)
2. Rental rates (which depends on economy and jobs)
3. Interest rates (affects the rent vs. own decision)

[Author]

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