Harveston down the drain

[vizcaya]

I also did not expect prices to fall this much this soon. I did as much research as I could before I purchased my home late last year, and I estimated that the bottom would be about 30% from peak. Knowing this I purchased a bank owned home that was about 30% below peak(mid 2005 pricing). Prices are currently at about the price I paid. With no real bottom in site, it looks like there will be another 20% drop before prices bottom in my area.

I am here for at least 10-15 years. Therefore the bottom of the cycle will not hurt me. I did lose about $120k in opportunity cost. But since I sold my last home in this same area at peak, I used that money as a down payment, therefore the $120k was bubble money.

[SD Realtor]

VC sorry to hear about your reticence. However no pity. I was one of those who advised you that whatever you did, be prepared for more depreciation. One can never identify the bottom but certainly one indicator would be volume leveling off… so if you walk away or work out the plan with your parents or whatever you do, if you do buy again, perhaps waiting until volume levels off would be a good thing.

To not realize that Temecula is on the heavy side of slope down is a large miss on your part. The fact is that Temecula/Riverside and other outlying areas will indeed bottom out sooner then more desireable areas. However when they do bottom I would expect them to stay flat for awhile and stay in a narrow range that will be defined by the investor participation to scoop up properties for rentals because raw buyer demand will not be sufficient out there.

PW – My advice for clients (who are buyers) is for them to scrub out a THOROUGH budget for the costs of owning the home. Regardless of whether it is owner occupied or a rental. Neglecting all the recurring costs one is saddled with for owning a home is not an option.

As far as building a home out in Temec or anywhere out there, I believe (like you I think) that it will indeed go low enough that you can get as good as, or close to the pricing of a build yourself and there is ALOT less hassle involved.

SD Realtor

[SD Realtor]

VC sorry to hear about your reticence. However no pity. I was one of those who advised you that whatever you did, be prepared for more depreciation. One can never identify the bottom but certainly one indicator would be volume leveling off… so if you walk away or work out the plan with your parents or whatever you do, if you do buy again, perhaps waiting until volume levels off would be a good thing.

To not realize that Temecula is on the heavy side of slope down is a large miss on your part. The fact is that Temecula/Riverside and other outlying areas will indeed bottom out sooner then more desireable areas. However when they do bottom I would expect them to stay flat for awhile and stay in a narrow range that will be defined by the investor participation to scoop up properties for rentals because raw buyer demand will not be sufficient out there.

PW – My advice for clients (who are buyers) is for them to scrub out a THOROUGH budget for the costs of owning the home. Regardless of whether it is owner occupied or a rental. Neglecting all the recurring costs one is saddled with for owning a home is not an option.

As far as building a home out in Temec or anywhere out there, I believe (like you I think) that it will indeed go low enough that you can get as good as, or close to the pricing of a build yourself and there is ALOT less hassle involved.

SD Realtor

[SD Realtor]

VC sorry to hear about your reticence. However no pity. I was one of those who advised you that whatever you did, be prepared for more depreciation. One can never identify the bottom but certainly one indicator would be volume leveling off… so if you walk away or work out the plan with your parents or whatever you do, if you do buy again, perhaps waiting until volume levels off would be a good thing.

To not realize that Temecula is on the heavy side of slope down is a large miss on your part. The fact is that Temecula/Riverside and other outlying areas will indeed bottom out sooner then more desireable areas. However when they do bottom I would expect them to stay flat for awhile and stay in a narrow range that will be defined by the investor participation to scoop up properties for rentals because raw buyer demand will not be sufficient out there.

PW – My advice for clients (who are buyers) is for them to scrub out a THOROUGH budget for the costs of owning the home. Regardless of whether it is owner occupied or a rental. Neglecting all the recurring costs one is saddled with for owning a home is not an option.

As far as building a home out in Temec or anywhere out there, I believe (like you I think) that it will indeed go low enough that you can get as good as, or close to the pricing of a build yourself and there is ALOT less hassle involved.

SD Realtor

[SD Realtor]

VC sorry to hear about your reticence. However no pity. I was one of those who advised you that whatever you did, be prepared for more depreciation. One can never identify the bottom but certainly one indicator would be volume leveling off… so if you walk away or work out the plan with your parents or whatever you do, if you do buy again, perhaps waiting until volume levels off would be a good thing.

To not realize that Temecula is on the heavy side of slope down is a large miss on your part. The fact is that Temecula/Riverside and other outlying areas will indeed bottom out sooner then more desireable areas. However when they do bottom I would expect them to stay flat for awhile and stay in a narrow range that will be defined by the investor participation to scoop up properties for rentals because raw buyer demand will not be sufficient out there.

PW – My advice for clients (who are buyers) is for them to scrub out a THOROUGH budget for the costs of owning the home. Regardless of whether it is owner occupied or a rental. Neglecting all the recurring costs one is saddled with for owning a home is not an option.

As far as building a home out in Temec or anywhere out there, I believe (like you I think) that it will indeed go low enough that you can get as good as, or close to the pricing of a build yourself and there is ALOT less hassle involved.

SD Realtor

[SD Realtor]

VC sorry to hear about your reticence. However no pity. I was one of those who advised you that whatever you did, be prepared for more depreciation. One can never identify the bottom but certainly one indicator would be volume leveling off… so if you walk away or work out the plan with your parents or whatever you do, if you do buy again, perhaps waiting until volume levels off would be a good thing.

To not realize that Temecula is on the heavy side of slope down is a large miss on your part. The fact is that Temecula/Riverside and other outlying areas will indeed bottom out sooner then more desireable areas. However when they do bottom I would expect them to stay flat for awhile and stay in a narrow range that will be defined by the investor participation to scoop up properties for rentals because raw buyer demand will not be sufficient out there.

PW – My advice for clients (who are buyers) is for them to scrub out a THOROUGH budget for the costs of owning the home. Regardless of whether it is owner occupied or a rental. Neglecting all the recurring costs one is saddled with for owning a home is not an option.

As far as building a home out in Temec or anywhere out there, I believe (like you I think) that it will indeed go low enough that you can get as good as, or close to the pricing of a build yourself and there is ALOT less hassle involved.

SD Realtor

[patientlywaiting]

SD Realtor, my question was: how much of dwelling replacement insurance coverage homeowners should carry on their homes? If replacement cost (to build a new house on owned land) is less than $130/sf it would be foolish to be over-insured. I was thinking that new buyers need to obtain HO insurance and they might ask you what coverage they should carry.

Vizcaya, 10 or 15 years might just about get you even. Don’t forget inflation, and ownership premium. Even if house prices recover to previous levels, those two factors alone will result in heavy losses to the people who stuck it out. That’s not to mention that they end-up with 15-year-old houses that will need repairs while the newer houses will have better technology such a new appliances and perhaps the latest tech gizmos such as fiber optics and solar panels.

During the recession, I expect heavy out-migration from high cost areas such as San Diego, perhaps proportionately more than we had in the early 1990s recession.

[patientlywaiting]

SD Realtor, my question was: how much of dwelling replacement insurance coverage homeowners should carry on their homes? If replacement cost (to build a new house on owned land) is less than $130/sf it would be foolish to be over-insured. I was thinking that new buyers need to obtain HO insurance and they might ask you what coverage they should carry.

Vizcaya, 10 or 15 years might just about get you even. Don’t forget inflation, and ownership premium. Even if house prices recover to previous levels, those two factors alone will result in heavy losses to the people who stuck it out. That’s not to mention that they end-up with 15-year-old houses that will need repairs while the newer houses will have better technology such a new appliances and perhaps the latest tech gizmos such as fiber optics and solar panels.

During the recession, I expect heavy out-migration from high cost areas such as San Diego, perhaps proportionately more than we had in the early 1990s recession.

[patientlywaiting]

SD Realtor, my question was: how much of dwelling replacement insurance coverage homeowners should carry on their homes? If replacement cost (to build a new house on owned land) is less than $130/sf it would be foolish to be over-insured. I was thinking that new buyers need to obtain HO insurance and they might ask you what coverage they should carry.

Vizcaya, 10 or 15 years might just about get you even. Don’t forget inflation, and ownership premium. Even if house prices recover to previous levels, those two factors alone will result in heavy losses to the people who stuck it out. That’s not to mention that they end-up with 15-year-old houses that will need repairs while the newer houses will have better technology such a new appliances and perhaps the latest tech gizmos such as fiber optics and solar panels.

During the recession, I expect heavy out-migration from high cost areas such as San Diego, perhaps proportionately more than we had in the early 1990s recession.

[patientlywaiting]

SD Realtor, my question was: how much of dwelling replacement insurance coverage homeowners should carry on their homes? If replacement cost (to build a new house on owned land) is less than $130/sf it would be foolish to be over-insured. I was thinking that new buyers need to obtain HO insurance and they might ask you what coverage they should carry.

Vizcaya, 10 or 15 years might just about get you even. Don’t forget inflation, and ownership premium. Even if house prices recover to previous levels, those two factors alone will result in heavy losses to the people who stuck it out. That’s not to mention that they end-up with 15-year-old houses that will need repairs while the newer houses will have better technology such a new appliances and perhaps the latest tech gizmos such as fiber optics and solar panels.

During the recession, I expect heavy out-migration from high cost areas such as San Diego, perhaps proportionately more than we had in the early 1990s recession.

[patientlywaiting]

SD Realtor, my question was: how much of dwelling replacement insurance coverage homeowners should carry on their homes? If replacement cost (to build a new house on owned land) is less than $130/sf it would be foolish to be over-insured. I was thinking that new buyers need to obtain HO insurance and they might ask you what coverage they should carry.

Vizcaya, 10 or 15 years might just about get you even. Don’t forget inflation, and ownership premium. Even if house prices recover to previous levels, those two factors alone will result in heavy losses to the people who stuck it out. That’s not to mention that they end-up with 15-year-old houses that will need repairs while the newer houses will have better technology such a new appliances and perhaps the latest tech gizmos such as fiber optics and solar panels.

During the recession, I expect heavy out-migration from high cost areas such as San Diego, perhaps proportionately more than we had in the early 1990s recession.

[AK]

You may be “hosed” by simple checkbook analysis. But you’re quite a bit less hosed than the people who bought at the top of the market … and it seems there are quite a few of them.

And while there are a number of 2500+ sf houses on the market for less than $300K, trashed REOs and other brown-lawn specials seem to be overrepresented, at least from what I’ve seen on Redfin.

You have a house that you like, and it’s within your means. Please. Be happy.

[AK]

You may be “hosed” by simple checkbook analysis. But you’re quite a bit less hosed than the people who bought at the top of the market … and it seems there are quite a few of them.

And while there are a number of 2500+ sf houses on the market for less than $300K, trashed REOs and other brown-lawn specials seem to be overrepresented, at least from what I’ve seen on Redfin.

You have a house that you like, and it’s within your means. Please. Be happy.

[AK]

You may be “hosed” by simple checkbook analysis. But you’re quite a bit less hosed than the people who bought at the top of the market … and it seems there are quite a few of them.

And while there are a number of 2500+ sf houses on the market for less than $300K, trashed REOs and other brown-lawn specials seem to be overrepresented, at least from what I’ve seen on Redfin.

You have a house that you like, and it’s within your means. Please. Be happy.

[AK]

You may be “hosed” by simple checkbook analysis. But you’re quite a bit less hosed than the people who bought at the top of the market … and it seems there are quite a few of them.

And while there are a number of 2500+ sf houses on the market for less than $300K, trashed REOs and other brown-lawn specials seem to be overrepresented, at least from what I’ve seen on Redfin.

You have a house that you like, and it’s within your means. Please. Be happy.

[Author]

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