I can see the whites of their eyes

[(former)FormerSanDiegan]

[quote=peterb]Basic economics should be more respected here and I think this is why our country is in such trouble. From Wall Street to main street.
…

Rationalizing the reasons and logic is all well and fine…it’s a home, rents will cover PITI, prices cant get too much lower, etc… Are all just that, rationalizations not logical analysis.

[/quote]

Funny, I always thought that basing a decision on fundamentals (such as rents relative to price and income) was logical and following basic economics.

One should not assume that because property in Temecula has depreciated by 40% over the past three years, that that trend will continue indefinitely. Basing a decision on anticipated future direction, rather than comparison to rent and one’s income is exactly what got us into this mess.

[(former)FormerSanDiegan]

[quote=peterb]Basic economics should be more respected here and I think this is why our country is in such trouble. From Wall Street to main street.
…

Rationalizing the reasons and logic is all well and fine…it’s a home, rents will cover PITI, prices cant get too much lower, etc… Are all just that, rationalizations not logical analysis.

[/quote]

Funny, I always thought that basing a decision on fundamentals (such as rents relative to price and income) was logical and following basic economics.

One should not assume that because property in Temecula has depreciated by 40% over the past three years, that that trend will continue indefinitely. Basing a decision on anticipated future direction, rather than comparison to rent and one’s income is exactly what got us into this mess.

[peterb]

These are all rationalizations for buying an asset that is depreciating. It would at least be a lower risk decision if the purchase were not heavily leveraged.
Why buy now? What’s the hurry to take such a risk? RE doesnt all of the sudden shoot up on good news like the stock market. Wait for unemployment to stop rising and foreclosures to stop dominating the market. At least those would be bullish indicators for the RE market to stabilize. Time is your friend here, not the enemy.

We’re in uncharted territory for this economy. Huge bank failures, recession and growing unemployment. And now it looks as though the whole world is headed into a recession as well.

I would advice anyone considering buying a highly leveraged, depreciating asset in this environment to be extremely careful….unless you have lots of availble cash to fall back on should things get considerably worse.

[peterb]

These are all rationalizations for buying an asset that is depreciating. It would at least be a lower risk decision if the purchase were not heavily leveraged.
Why buy now? What’s the hurry to take such a risk? RE doesnt all of the sudden shoot up on good news like the stock market. Wait for unemployment to stop rising and foreclosures to stop dominating the market. At least those would be bullish indicators for the RE market to stabilize. Time is your friend here, not the enemy.

We’re in uncharted territory for this economy. Huge bank failures, recession and growing unemployment. And now it looks as though the whole world is headed into a recession as well.

I would advice anyone considering buying a highly leveraged, depreciating asset in this environment to be extremely careful….unless you have lots of availble cash to fall back on should things get considerably worse.

[peterb]

These are all rationalizations for buying an asset that is depreciating. It would at least be a lower risk decision if the purchase were not heavily leveraged.
Why buy now? What’s the hurry to take such a risk? RE doesnt all of the sudden shoot up on good news like the stock market. Wait for unemployment to stop rising and foreclosures to stop dominating the market. At least those would be bullish indicators for the RE market to stabilize. Time is your friend here, not the enemy.

We’re in uncharted territory for this economy. Huge bank failures, recession and growing unemployment. And now it looks as though the whole world is headed into a recession as well.

I would advice anyone considering buying a highly leveraged, depreciating asset in this environment to be extremely careful….unless you have lots of availble cash to fall back on should things get considerably worse.

[peterb]

These are all rationalizations for buying an asset that is depreciating. It would at least be a lower risk decision if the purchase were not heavily leveraged.
Why buy now? What’s the hurry to take such a risk? RE doesnt all of the sudden shoot up on good news like the stock market. Wait for unemployment to stop rising and foreclosures to stop dominating the market. At least those would be bullish indicators for the RE market to stabilize. Time is your friend here, not the enemy.

We’re in uncharted territory for this economy. Huge bank failures, recession and growing unemployment. And now it looks as though the whole world is headed into a recession as well.

I would advice anyone considering buying a highly leveraged, depreciating asset in this environment to be extremely careful….unless you have lots of availble cash to fall back on should things get considerably worse.

[peterb]

These are all rationalizations for buying an asset that is depreciating. It would at least be a lower risk decision if the purchase were not heavily leveraged.
Why buy now? What’s the hurry to take such a risk? RE doesnt all of the sudden shoot up on good news like the stock market. Wait for unemployment to stop rising and foreclosures to stop dominating the market. At least those would be bullish indicators for the RE market to stabilize. Time is your friend here, not the enemy.

We’re in uncharted territory for this economy. Huge bank failures, recession and growing unemployment. And now it looks as though the whole world is headed into a recession as well.

I would advice anyone considering buying a highly leveraged, depreciating asset in this environment to be extremely careful….unless you have lots of availble cash to fall back on should things get considerably worse.

[Ren]

[quote=peterb]
I would advice anyone considering buying a highly leveraged, depreciating asset in this environment to be extremely careful….unless you have lots of availble cash to fall back on should things get considerably worse.
[/quote]

I’m with you in that I won’t buy now just because of my plans for leveraging rental property.

However, the point is that once the cost of owning so thoroughly beats the cost of renting (as it does in Temecula), it doesn’t matter that it’s depreciating. You’re paying $100/sq and $1,500/month for a beautiful house. Why would you need lots of available cash if things get worse? The economy and housing market can be in the toilet, but you’ve still got a beautiful house, and you’re still only paying $1,500/month for it.

[Ren]

[quote=peterb]
I would advice anyone considering buying a highly leveraged, depreciating asset in this environment to be extremely careful….unless you have lots of availble cash to fall back on should things get considerably worse.
[/quote]

I’m with you in that I won’t buy now just because of my plans for leveraging rental property.

However, the point is that once the cost of owning so thoroughly beats the cost of renting (as it does in Temecula), it doesn’t matter that it’s depreciating. You’re paying $100/sq and $1,500/month for a beautiful house. Why would you need lots of available cash if things get worse? The economy and housing market can be in the toilet, but you’ve still got a beautiful house, and you’re still only paying $1,500/month for it.

[Ren]

[quote=peterb]
I would advice anyone considering buying a highly leveraged, depreciating asset in this environment to be extremely careful….unless you have lots of availble cash to fall back on should things get considerably worse.
[/quote]

I’m with you in that I won’t buy now just because of my plans for leveraging rental property.

However, the point is that once the cost of owning so thoroughly beats the cost of renting (as it does in Temecula), it doesn’t matter that it’s depreciating. You’re paying $100/sq and $1,500/month for a beautiful house. Why would you need lots of available cash if things get worse? The economy and housing market can be in the toilet, but you’ve still got a beautiful house, and you’re still only paying $1,500/month for it.

[Ren]

[quote=peterb]
I would advice anyone considering buying a highly leveraged, depreciating asset in this environment to be extremely careful….unless you have lots of availble cash to fall back on should things get considerably worse.
[/quote]

I’m with you in that I won’t buy now just because of my plans for leveraging rental property.

However, the point is that once the cost of owning so thoroughly beats the cost of renting (as it does in Temecula), it doesn’t matter that it’s depreciating. You’re paying $100/sq and $1,500/month for a beautiful house. Why would you need lots of available cash if things get worse? The economy and housing market can be in the toilet, but you’ve still got a beautiful house, and you’re still only paying $1,500/month for it.

[Ren]

[quote=peterb]
I would advice anyone considering buying a highly leveraged, depreciating asset in this environment to be extremely careful….unless you have lots of availble cash to fall back on should things get considerably worse.
[/quote]

I’m with you in that I won’t buy now just because of my plans for leveraging rental property.

However, the point is that once the cost of owning so thoroughly beats the cost of renting (as it does in Temecula), it doesn’t matter that it’s depreciating. You’re paying $100/sq and $1,500/month for a beautiful house. Why would you need lots of available cash if things get worse? The economy and housing market can be in the toilet, but you’ve still got a beautiful house, and you’re still only paying $1,500/month for it.

[temeculaguy]

So many responses, I’ll address them all after I’ve had a chance to digest them. Thanks to all for the love, appreciate it and right back at you.
So I got inside this morning and there were some “issues.” None that were a deal killer but the kitchen and bathroom cabinets all needed to replaced, it was laminate over mdf and was peeling (not just a few spots but all over), there were a few other things that had the cash register ringing in my head. I made the offer at 270k and asked for 3% closing costs, things looked good until two other offers came in within a an hour, one was below mine and one was for 300k and no closing credit, putting my offer 37k behind. The other offer had approval and more than 20% down so there is no chance they don’t qual. My only hope on that house is if they get cold feet, they looked at it at night, in darkness and made the offer, perhaps in daylight they will see some of the things I saw.

My assumption that the great depression 2.0 would give me a free day of no competition was wrong, there is still a lot of activity, redhawk, no mello roos, low hoa, still brings them out of the woodwork. Things happen for a reason, so the quest continues. For another 37k, there are more options so I will not engage in a bidding war during the greatest economic meltdown of my lifetime, I’m just not that emotional. To be continued…

[temeculaguy]

So many responses, I’ll address them all after I’ve had a chance to digest them. Thanks to all for the love, appreciate it and right back at you.
So I got inside this morning and there were some “issues.” None that were a deal killer but the kitchen and bathroom cabinets all needed to replaced, it was laminate over mdf and was peeling (not just a few spots but all over), there were a few other things that had the cash register ringing in my head. I made the offer at 270k and asked for 3% closing costs, things looked good until two other offers came in within a an hour, one was below mine and one was for 300k and no closing credit, putting my offer 37k behind. The other offer had approval and more than 20% down so there is no chance they don’t qual. My only hope on that house is if they get cold feet, they looked at it at night, in darkness and made the offer, perhaps in daylight they will see some of the things I saw.

My assumption that the great depression 2.0 would give me a free day of no competition was wrong, there is still a lot of activity, redhawk, no mello roos, low hoa, still brings them out of the woodwork. Things happen for a reason, so the quest continues. For another 37k, there are more options so I will not engage in a bidding war during the greatest economic meltdown of my lifetime, I’m just not that emotional. To be continued…

[temeculaguy]

So many responses, I’ll address them all after I’ve had a chance to digest them. Thanks to all for the love, appreciate it and right back at you.
So I got inside this morning and there were some “issues.” None that were a deal killer but the kitchen and bathroom cabinets all needed to replaced, it was laminate over mdf and was peeling (not just a few spots but all over), there were a few other things that had the cash register ringing in my head. I made the offer at 270k and asked for 3% closing costs, things looked good until two other offers came in within a an hour, one was below mine and one was for 300k and no closing credit, putting my offer 37k behind. The other offer had approval and more than 20% down so there is no chance they don’t qual. My only hope on that house is if they get cold feet, they looked at it at night, in darkness and made the offer, perhaps in daylight they will see some of the things I saw.

My assumption that the great depression 2.0 would give me a free day of no competition was wrong, there is still a lot of activity, redhawk, no mello roos, low hoa, still brings them out of the woodwork. Things happen for a reason, so the quest continues. For another 37k, there are more options so I will not engage in a bidding war during the greatest economic meltdown of my lifetime, I’m just not that emotional. To be continued…

[Author]

Posts