Good time to buy in 700k market ?

[sdduuuude]

[quote=Ren]FYI Walter – it’s an admirable goal, and training to be able to do 100 pushups will give you great endurance and make you really good at… doing a lot of pushups. It won’t increase strength much. If you want confidence-boosting go-ahead-mess-with-me power, you’re gonna have to lift.

And eat. This is actually the hard part.[/quote]

Bo Jackson would disagree. He rarely lifted weights. His training focused on isometrics and exercises like pushups, pullups and dips.

Being the first athlete voted to all-star teams in two major american sports, I think it prepared him for a bit more than … just doing pushups.

[sdrealtor]

One of my friends in college was a national champion arm wrestler. All he ever did was push ups to train.

[Ren]

[quote=sdduuuude]Bo Jackson would disagree. He rarely lifted weights. His training focused on isometrics and exercises like pushups, pullups and dips.

Being the first athlete voted to all-star teams in two major american sports, I think it prepared him for a bit more than … just doing pushups.[/quote]

There are pro athletes, many of whom are physically gifted beyond mortal man, and above them are the Bo Jacksons and Mike Tysons, who are genetic freaks. Your average untrained middle-aged male who can’t bench 150 can do 100 pushups a day for a year and still not come close to benching 200. Unless you’re a freak, muscle doesn’t work that way.

I know an amateur MMA fighter who does 100 pushups/pullups etc. a day, but endurance is useful in his line of work (160 lb class). However, a life or death situation or fight with an angry drunk isn’t going to be 3 rounds of 3 minutes, it’s going to be 30-60 seconds, and for that, weight and strength trump all else. It’s the reason there are weight classes in MMA and boxing, and for most people the only way to get there is to lift and eat. I’d much rather have 30 more pounds of muscle than a black belt. Of course a little jujitsu training and cardio isn’t a bad idea.

Everybody is different, and a great way to test its effect is to lift and eat for 6 months (an untrained person will gain a decent amount), then stop and do 100 pushups a day for a couple weeks, then lift again. Most people will see their strength drop significantly.

[scaredyclassic]

My plan is to be able to be able to effortlessly carry in bags of dog food and groceries. I’m on track.

[NotCranky]

Change the hand placement on the pushups. Do some with your hands touching and then move them out a little for each set until they are wider than normal.

[Jazzman]

Good time to buy in 700k market ? No! Should you? That’s up to you and your own personal circumstances. Interest rates are very tempting, but values have not found their floor IMO. Maybe they never will, so the decision becomes one of conscience. However, you still make that decision against the background of high foreclosures, which jumped 30% in August swelling the already large months supply, poor economic growth which impacts the already high unemployment rate of 20% if you include PTs and LHs (lost hopers), savings (ergo down payments) impacted by a European sovereign debt crisis, and a when-not-if scenario iro a double dip recession. More to the point perhaps, many homes in this price range have corrected 20-30% which does not put them back to historical averages, and many will justifiably argue that makes them still over-priced. You may say prices are irrelevant as the monthly nut is what counts, but taxes would have you believe otherwise.

[scaredyclassic]

Every moment of time is uniquely bad to buy.

[sunny88]

In this environment renting makes a lot of sense. Let’s do the math:

Home price $700k, down payment $150k, mortgage $550k at 4% (30 yr fixed), property tax $8k, MR 3k. Monthly payments $3,500.

Possible drop in value over next 5 years: 10%=$70k.
Annual drop $14k or about $1,200 a month.

Actual cost of owning a $700k over next 5 years $4,700 per month.

Tax credit (25% bracket): $450 per month.

You can rent a comparable home for about $2,500-2,800 per month. Savings at least $1,400 per month or $80 k over 5 years.

Conclusion: Wait and buy a house in 5 years!

[an]

[quote=sunny88]In this environment renting makes a lot of sense. Let’s do the math:

Home price $700k, down payment $150k, mortgage $550k at 4% (30 yr fixed), property tax $8k, MR 3k. Monthly payments $3,500.

Possible drop in value over next 5 years: 10%=$70k.
Annual drop $14k or about $1,200 a month.

Actual cost of owning a $700k over next 5 years $4,700 per month.

Tax credit (25% bracket): $450 per month.

You can rent a comparable home for about $2,500-2,800 per month. Savings at least $1,400 per month or $80 k over 5 years.

Conclusion: Wait and buy a house in 5 years![/quote]
That’s some low rent numbers. Houses in the 400-500k range in Mira Mesa are renting between 2300-2500. Houses in the $700k range in Sorrento Valley with no HOA or MR are renting between 3000-3300/month. Are you sure those are the market rents? To truly afford a $700k house with those HOA + MR, shouldn’t those buyers be in the 28% or 31% bracket? You’d be stretched super thin if you’re in the 25% bracket at buy that type of house.

The only good argument to wait in your post is the expectation of a 10% drop in 5 years. Hopefully rates doesn’t go up 10% to offset that 10% decrease in price.

[CA renter]

[quote=Jazzman]Good time to buy in 700k market ? No! Should you? That’s up to you and your own personal circumstances. Interest rates are very tempting, but values have not found their floor IMO. Maybe they never will, so the decision becomes one of conscience. However, you still make that decision against the background of high foreclosures, which jumped 30% in August swelling the already large months supply, poor economic growth which impacts the already high unemployment rate of 20% if you include PTs and LHs (lost hopers), savings (ergo down payments) impacted by a European sovereign debt crisis, and a when-not-if scenario iro a double dip recession. More to the point perhaps, many homes in this price range have corrected 20-30% which does not put them back to historical averages, and many will justifiably argue that makes them still over-priced. You may say prices are irrelevant as the monthly nut is what counts, but taxes would have you believe otherwise.[/quote]

Agreed.

[sunny88]

[quote=AN][quote=sunny88]In this environment renting makes a lot of sense. Let’s do the math:

Home price $700k, down payment $150k, mortgage $550k at 4% (30 yr fixed), property tax $8k, MR 3k. Monthly payments $3,500.

Possible drop in value over next 5 years: 10%=$70k.
Annual drop $14k or about $1,200 a month.

Actual cost of owning a $700k over next 5 years $4,700 per month.

Tax credit (25% bracket): $450 per month.

You can rent a comparable home for about $2,500-2,800 per month. Savings at least $1,400 per month or $80 k over 5 years.

Conclusion: Wait and buy a house in 5 years![/quote]
That’s some low rent numbers. Houses in the 400-500k range in Mira Mesa are renting between 2300-2500. Houses in the $700k range in Sorrento Valley with no HOA or MR are renting between 3000-3300/month. Are you sure those are the market rents? To truly afford a $700k house with those HOA + MR, shouldn’t those buyers be in the 28% or 31% bracket? You’d be stretched super thin if you’re in the 25% bracket at buy that type of house.

The only good argument to wait in your post is the expectation of a 10% drop in 5 years. Hopefully rates doesn’t go up 10% to offset that 10% decrease in price.[/quote]

Mira Mesa homes rents are between $2,000-2,300.
(http://sandiego.craigslist.org/search/apa?query=mira+mesa&srchType=A&minAsk=&maxAsk=&bedrooms=4&sort=priceasc).

Even if renter/buyer belongs to higher tax bracket savings are substantial when renting. Also, I didn’t consider maintenance which could easily add another $ 3,000 a year.

[an]

[quote=sunny88]Mira Mesa homes rents are between $2,000-2,300.
(http://sandiego.craigslist.org/search/apa?query=mira+mesa&srchType=A&minAsk=&maxAsk=&bedrooms=4&sort=priceasc).

Even if renter/buyer belongs to higher tax bracket savings are substantial when renting. Also, I didn’t consider maintenance which could easily add another $ 3,000 a year.[/quote]
http://sandiego.craigslist.org/csd/apa/2622741143.html
This house would probably sell for mid 300k.
http://sandiego.craigslist.org/csd/apa/2620761636.html
This house would probably sell for low 400k.
http://sandiego.craigslist.org/csd/apa/2595302813.html
This one is a good deal (if you can put up with being backed to Calle Cristobal), probably sell for high $400k.
http://sandiego.craigslist.org/csd/apa/2620531747.html
This one is probably asking $100-200 too high. This probably would sell for low $400k.
http://sandiego.craigslist.org/csd/apa/2616947429.html
This one probably would sell for $420-$440k.
http://sandiego.craigslist.org/csd/apa/2622626512.html
This one probably would sell for $410-$430k.
http://sandiego.craigslist.org/csd/apa/2626054173.html
This one probably would sell for $440-$460k.

I can go on, but you get the point.

Like I said, if you count in the 10% decline and assuming rate doesn’t rise over the next 5 years, then it’s a no-brainer that rent would be a better deal. If you don’t count in the 10% decline, the $3500/month number with 28/31% tax bracket, you’re looking at ~$2800-2900/month. Without the assumption of 10% decline, it’s not so black and white anymore. Also, after 5 years, you would have paid ~$53k in principal. Even if you have $15k in maintenance over 5 years (which I think is kinda high), the numbers is not as conclusive as it used to be in 2005.

BTW, these houses probably would probably sell for $700k or less.
http://sandiego.craigslist.org/nsd/apa/2627055125.html
http://sandiego.craigslist.org/nsd/apa/2612845743.html
http://sandiego.craigslist.org/nsd/apa/2618238518.html
http://sandiego.craigslist.org/csd/apa/2626315275.html
(This similar house: http://www.sdlookup.com/MLS-110028267-11118_Avenida_De_Los_Lobos_Rd_San_Diego_CA_92127 is asking for $460k)
http://sandiego.craigslist.org/csd/apa/2617682765.html
(Similar area but smaller by ~50 sq-ft, asking for $475k: http://www.sdlookup.com/MLS-110048176-10525_Hollingsworth_Way_San_Diego_CA_92127)
http://sandiego.craigslist.org/csd/apa/2607791460.html
(http://www.sdlookup.com/MLS-110037686-9919_Falcon_Bluff_St_San_Diego_CA_92127, 270 sq-ft smaller model)

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