housing a sucker’s bet now?

[ibjames]

[quote=temeculaguy]scardey, you need to evaluate fundamentals, not stories of 1920 or 2006. Just figure out what you pay in rent, what it would cost you to buy and compare the difference after taxes. When they are almost a tie, you buy and you trade off the maintenance for the rent control. Primary houses are not an investment, look at it as a shelter that you must pay for one way or another.

I put in a bid recently and will find out probably by the close of business tomorrow if I am in escrow. My scenario is a little different because i am renting something smaller than I want because the lease terms were beneficial but I just ran the numbers to compare. Here they are

1600 sq ft rental 1500/mo 3/2/ 2 car
the purchase offer I made is 3000 sq ft 5/4/3 car 1600 mo P%I to buy if I put nothing down (i will put money down but that money costs me profit/interest elsewhere so I use 0 down to do the math). It may be as high as 1750, interest rates have been all over the map day to day.

There will be taxes, insurance, hoa and other costs but they are equal to the tax deduction so I compare the pure 0 down principal and interest using 30 fixed and make my comparison. It isn’t exactly a wash, i’m paying $100 to $200 more to buy but it is much larger place and rent would have been 2k+ for that one had I chose to rent a larger place. I could buy my exact rental for $1100 P&I. In both cases, it’s cheaper to buy than to rent. You need to run your numbers, that is what is relevent, not historical or other parts of the country, none of that matter, just your numbers matter.

Run your own numbers using this formula or post your rent and your purchse price and I’ll tell you if it makes sense, please note if your rental and your purchse are not comparable because that matters. Stop thinking of houses as an investment, purchasing merely locks your rent, nothing more. If you want to invest in r/e, then you buy rental property. [/quote]

can you make an excel doc with this? I can host it

[denverite]

My sense is that most/many of the Piggs are looking at the housing market(s) in isloation from the rest of the economy. IMHO, it seems to me that the byword should be caution. The macro-economic situation is very dire and could get much worse. Aside from national issues, California will have monumental problems of unemployment, bond payout, just to name a few. The big picture is very ominous right now.

[denverite]

My sense is that most/many of the Piggs are looking at the housing market(s) in isloation from the rest of the economy. IMHO, it seems to me that the byword should be caution. The macro-economic situation is very dire and could get much worse. Aside from national issues, California will have monumental problems of unemployment, bond payout, just to name a few. The big picture is very ominous right now.

[denverite]

My sense is that most/many of the Piggs are looking at the housing market(s) in isloation from the rest of the economy. IMHO, it seems to me that the byword should be caution. The macro-economic situation is very dire and could get much worse. Aside from national issues, California will have monumental problems of unemployment, bond payout, just to name a few. The big picture is very ominous right now.

[denverite]

My sense is that most/many of the Piggs are looking at the housing market(s) in isloation from the rest of the economy. IMHO, it seems to me that the byword should be caution. The macro-economic situation is very dire and could get much worse. Aside from national issues, California will have monumental problems of unemployment, bond payout, just to name a few. The big picture is very ominous right now.

[denverite]

My sense is that most/many of the Piggs are looking at the housing market(s) in isloation from the rest of the economy. IMHO, it seems to me that the byword should be caution. The macro-economic situation is very dire and could get much worse. Aside from national issues, California will have monumental problems of unemployment, bond payout, just to name a few. The big picture is very ominous right now.

[carlsbadworker]

TG, good luck with your purchase!
I think we are in the same market and look at similar house at similar price range…so soon one less competitor for me. 🙂
Temecula housing prices are certainly looking good on buy/rent valuation front, but the price is most certainly going to drift downward for the next few months. So I’m making offers with agressive bid compared to comps and I’m happy with either winning the bid or losing the bid. So far, I have been losing…
That said, I don’t think the price is very attractive for investors now. And I will think the price will bottom when it looks very attractive for rational investors. TG has a very good formula that he posted before. Price will be very attractive for rational investors when it is 100xrent. One can probably get 125xrent in Temecula right now which is pretty good for primary residence…as long as it meets all your other personal criteria.

[carlsbadworker]

TG, good luck with your purchase!
I think we are in the same market and look at similar house at similar price range…so soon one less competitor for me. 🙂
Temecula housing prices are certainly looking good on buy/rent valuation front, but the price is most certainly going to drift downward for the next few months. So I’m making offers with agressive bid compared to comps and I’m happy with either winning the bid or losing the bid. So far, I have been losing…
That said, I don’t think the price is very attractive for investors now. And I will think the price will bottom when it looks very attractive for rational investors. TG has a very good formula that he posted before. Price will be very attractive for rational investors when it is 100xrent. One can probably get 125xrent in Temecula right now which is pretty good for primary residence…as long as it meets all your other personal criteria.

[carlsbadworker]

TG, good luck with your purchase!
I think we are in the same market and look at similar house at similar price range…so soon one less competitor for me. 🙂
Temecula housing prices are certainly looking good on buy/rent valuation front, but the price is most certainly going to drift downward for the next few months. So I’m making offers with agressive bid compared to comps and I’m happy with either winning the bid or losing the bid. So far, I have been losing…
That said, I don’t think the price is very attractive for investors now. And I will think the price will bottom when it looks very attractive for rational investors. TG has a very good formula that he posted before. Price will be very attractive for rational investors when it is 100xrent. One can probably get 125xrent in Temecula right now which is pretty good for primary residence…as long as it meets all your other personal criteria.

[carlsbadworker]

TG, good luck with your purchase!
I think we are in the same market and look at similar house at similar price range…so soon one less competitor for me. 🙂
Temecula housing prices are certainly looking good on buy/rent valuation front, but the price is most certainly going to drift downward for the next few months. So I’m making offers with agressive bid compared to comps and I’m happy with either winning the bid or losing the bid. So far, I have been losing…
That said, I don’t think the price is very attractive for investors now. And I will think the price will bottom when it looks very attractive for rational investors. TG has a very good formula that he posted before. Price will be very attractive for rational investors when it is 100xrent. One can probably get 125xrent in Temecula right now which is pretty good for primary residence…as long as it meets all your other personal criteria.

[carlsbadworker]

TG, good luck with your purchase!
I think we are in the same market and look at similar house at similar price range…so soon one less competitor for me. 🙂
Temecula housing prices are certainly looking good on buy/rent valuation front, but the price is most certainly going to drift downward for the next few months. So I’m making offers with agressive bid compared to comps and I’m happy with either winning the bid or losing the bid. So far, I have been losing…
That said, I don’t think the price is very attractive for investors now. And I will think the price will bottom when it looks very attractive for rational investors. TG has a very good formula that he posted before. Price will be very attractive for rational investors when it is 100xrent. One can probably get 125xrent in Temecula right now which is pretty good for primary residence…as long as it meets all your other personal criteria.

[peterb]

denverite- I could not agree with you more on this! We are embarking on very likely the worst global economic disaster to happen since the 1930’s. Maybe worse. Going long with max leverage on a depreciating asset that’s highly illiquid is the absolute worst thing to do right now. But pent-up demand and dreams die hard. I am amazed at what I see.

[peterb]

denverite- I could not agree with you more on this! We are embarking on very likely the worst global economic disaster to happen since the 1930’s. Maybe worse. Going long with max leverage on a depreciating asset that’s highly illiquid is the absolute worst thing to do right now. But pent-up demand and dreams die hard. I am amazed at what I see.

[peterb]

denverite- I could not agree with you more on this! We are embarking on very likely the worst global economic disaster to happen since the 1930’s. Maybe worse. Going long with max leverage on a depreciating asset that’s highly illiquid is the absolute worst thing to do right now. But pent-up demand and dreams die hard. I am amazed at what I see.

[peterb]

denverite- I could not agree with you more on this! We are embarking on very likely the worst global economic disaster to happen since the 1930’s. Maybe worse. Going long with max leverage on a depreciating asset that’s highly illiquid is the absolute worst thing to do right now. But pent-up demand and dreams die hard. I am amazed at what I see.

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