Help!

[Anonymous]

Buying a condo conversion right now would be the worst decision you’ll ever make in your life. These things are going drop big time over the next couple years. Condos in general are not a good investment, in a down market they get hit the hardest because outside of investors there is not a large market for them. A condo conversion is even less desirable than a regular condo. Bottom line, you will lose your ass if you buy this.

Median condo price in San Diego will be less than 200K within a couple years.

[sdrealtor]

Just say NO to condo conversions. Most are crap!

[sdduuuude]

roooooous,

In your spreadsheets, make sure you have a scenario where you rent for the next 7 years, while prices drop 25%, THEN buy, then go up at the rate of inflation.

Don’t just assume you rent for the next 30 years.

[sdduuuude]

Think of it this way – if you rent now, you can always buy in 1 year. If you buy now and prices drop, you are really, really stuck. You won’t want to hold onto a depreciating asset and you won’t want to sell at a loss.

The key to this decision is flexibility. Renting offers you flexibility to change your mind later. Buying doesn’t. And, if financial hardship strikes, you will be screwed as a homeowner.

So, in your spreadhseets, consider a scenario where prices drop 25% for 7 years, then grow at the rate of inflation, BUT you are forced to sell due to financial hardship in year 7, then rent for the next 5 years while you put your life together.

D

[roooooous]

Well I nixed the deal. I guess I am slightly bummed but moreso relieved. The unit was really decent in both my and my wife’s eyes, but I guess there will be others. Cheaper others? Here’s hoping. I will sleep better tonight knowing that my rent is still nice and cheap and still so much cheaper then i would have paid for the mortage (and the prop taxes, and the hoa, and the pmi and on and on). So we will keep looking. Let me know if anyone finds a 2 bedroom for around $275k. I guess I will hold off for that.

Thanks again everyone. Time will tell if this was the right move.

[PerryChase]

rooooous, keep us updated what you find. I think that you made a wise decision and that you’ll be amply rewarded. In a year, look back at that same complex you wanting to buy into now. You’ll be glad you waited.

I too am looking for a condo in central San Diego (Bankers Hills, Point Loma, Normal Heights, Mission Valley, Downtown, etc….) . I have some relatives from back East who are retiring and would love to share a condo in San Diego.

[SD Realtor]

rooous don’t be bummed out. Instead you should be patting yourself on the back. You have resisted an emotional response in favor of facts that are clear and present. An earlier post to your thread captured the personalities here in an accurate manner, from slight depreciation to doomsday. Even the most optimistic prognosticators are NOT predicting appreciation. So you are missing out on nothing.

Hopefully these facts will make you feel better:

1 – Inventory is high. It will most likely dip a little bit through the winter but that is only because listings are expiring, cancelled or being withdrawn. Back in the spring we will most likely push inventory to even higher levels then we have seen for years.

2 – Rates will most likely nmot change much over the next year. I think most people here see the long term mortgage rates not varying by more then +/- .75 of a point from where they are. If the recession that many of us are thinking does come, then they will most likely stay low. If they do go up then that will serve to depress prices further.

3 – Without even knowing you guys personally I can absolutely gaurantee there will be something that will come on the market that you will like even better then what you were looking at. It may take time but really you will.

So the challenge for you now is to try to save more money. Also don’t be afraid to keep looking around. I always see postings from Perry Chase. He seems to have all kinds of info on places. He just looks and looks and looks and then logs the activity of places he looks at. This is a very intelligent way to get a pulse not just on the market but on the very narrow scope of property types that he wants. I can probably mention a random UTC condo development and he can tell me more about it then the developer.

So don’t stop looking…just look, track, and start to accrue knowledge.

[JES]

The odds of condos going up in price anytime soon are near zero, and the odds of them taking a significant drop are large. In fact, they are already dropping and much of that drop lags 3 months in the monthly reports. IMO there’s no good reason to buy right now. At least wait until early next year since it will only go down between now and then.

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