Getting married in September 2007. When should we buy?

[jimmyle]

I am a first-time home buyer and need some advice. I and my fiancée are getting married in September 2007. Our combined income is about $120K with $70K in cash and we are planning to buy a house in Mira Mesa in the range of $470K-$540K. Early in 2006, we were talking about buying a 1300 square feet home but now the recent price drop has enabled us to look at 1500-2000 square feet homes. It would be nice if we could buy a home before the wedding. However, many people we talked to told us to wait until the Fall 2007 where the prices could be 5-10% lower than now. Do you agree with this? I checked zillow.com and see a small price increase for the median price in Mira Mesa from February to March and I worry a little bit.
Thanks for your advice
Jimmy

[Anonymous]

If you pay $470K-$540K to live in Mira Mesa you are a fool. Don’t even consider buying anywhere until at least end of 2008, then re-evaluate the market.

[recordsclerk]

There is too much downward pressure on pricing right now. I would wait as long as you can. It’s nice to own a home before, or when you marry, but now is not a good time to buy.

[gn]

Jimmy,

The median price is the mid-point of all sales transactions for a particular month. The median price reflects what people spend.

Take your scenario, when home prices drop, you still plan to spend the same amount of money (getting a bigger house). You did not plan to spend less. Your behavior is very typical of middle class folks.

This is why the median price does not reflect the market price. This is why it can go up while the “real home price” is going down.

I agree with deadzone about waiting until end of 2008.

[jimmyle]

gn,
Thanks for the info, I didn’t even think about it but it makes sense now, people are basically max out on the loans to get bigger houses so the median price might not reflect the actual market price. Price per square foot should be a better indication of the market price but I am not sure if this information is available anywhere.
Recently I saw a house that was purchased for $660K in 2005 and was listed for $549K in March 2007. We were tempted to put in an offer of $530K but then we held back because we weren’t sure if the timing was right. It was really difficult not to pull the trigger because this attractive house was suddenly within my reach. Some body bought it but I am not sure how much they paid for it.
Hopefully we can wait for the market to bottom out in 2008.
Thanks,
Jimmy

[lendingbubblecontinues]

I once heard that the original purchase price of many homes in Mira Mesa was around $15,000. Does anyone know whether that is true or not?

(It would have been many years ago of course.)

[gn]

Jimmy,

Price per square foot can be tricky to interpret as well.

Let’s suppose that, in a certain neighborhood you have houses ranging from 2000 – 3000 sq feet. The price of the 3000 sq ft homes are not 50% higher than the 2000 sq ft homes.

So, the price/sq ft of the larger homes will be lower, even though it’s in the same neighborhood.

One of the best ways to gauge the direction of prices is to look at what the builders are doing. Builders are very savvy & adjust their prices to the market’s realities.

>> We were tempted to put in an offer of $530K …
>> It was really difficult not to pull the trigger …

Most people “operate on recent memories”. Using recent memory, that house may seem like a bargain. When put into perspective, that house is way overpriced.

[NeetaT]

September 2009

[SD Realtor]

Jimmy –

In any secular trend like the one we are in, you will always see small rally points. Expect the secular trend down to continue for several years, and within that trend you will see rally points, more often then not in the spring. Don’t panic. If you can, try to buy later in the season, such as late summer or fall. If you are really smart push the purchase off for a few years. I do feel Mira Mesa will take it on the chin pretty hard in this downturn.

SD Realtor

[farbet]

If you must buy the offer 25% less than the asking prices. Don’t be shy about it either. Then you will be in the ballpark area as they drop.
If the Realtor is hi falutin arrogant bastard take a hike.

[an]

I see Mira Mesa getting hit the hardest so far, compare to surrounding areas. I hope it will get hit even harder in the next couple of years since that’s where I plan to buy my first home. Since MM are mostly all resale, I see a big range in prices. Some are desperate while others are wishful. But it’s still far from where I’d consider as reasonable.

[jimmyle]

asianautica,

Where are you planning to buy in MM? I like the Sorrento Valley/Calle Critobal area but these newer homes are still out of my reach with the 1800-2000 sq ft ones going for $600K-$650K. If they go down an additional 15% then I will be able to get them. If prices stay where they are then I will buy near Rancho Santa Fe and Mira Mesa Blvd.

[an]

jimmyle, I like the Sorrento Valley / Calle Cristobal area too. I agree on your assessment of the current price, but I think they will drop to the 400s when it’s all said and done. I’m actually looking for cheaper than that since it’s going to be my starter home. I’m looking for around 1200-1500sq-ft between Camino Santa Fe and Parkdale. Those house when is all said and done I think will be in the low 300k range.

[exeunt]

buy now,
before you get married

that way,
when you get divorced, you’ll be in better shape

[an]

haha, if that’s the thinking, then might as well not get married. That way, you don’t have to pay for those expensive divorces.

[Author]

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