It is beginning to feel like 1996

[(former)FormerSanDiegan]

[quote=Critter]What about the OP’s math? He states he can buy properties where the rent “easily” covers 5% of the purchase price. So, a $500K home would rent for $25K.

What am I missing? Is he talking yearly or monthly… I always thought rent calcs should be figured monthly. [/quote]

I am sure he means annually. Nothing wrong with using annual numbers (I prefer that actually, since you can compare to alternative investments and interest rates more easily).

And in actuality it is more like 6% + for single family homes in central San Diego (e.g. Clairemont or Mira Mesa). That’s today with fixed mortgage rates in the 6-6.5% range. Coastal areas are more like 4-5%

For perspective, in 1996 SFRs in central San Diego (e.g. Clairemont) rented at an equivalent of about 7-7.5% of their value (about $900-$1000 per month on a 150-160K house) At that time fixed mortgage rates were around 8%.

I would expect long-term rates to reach the 7-7.5% range in the current down cycle, so I would expect some more downside in prices resulting in gross rents in the 7% range in central SD. That’s another 10-15% price correction.

[barnaby33]

FLU its a troll post because his initial math is grossly unrealistic, his assessments were really taunts and there is a wide body of evidence that we are nowhere near a bottom, except MAYBE in Temecula.

[barnaby33]

FLU its a troll post because his initial math is grossly unrealistic, his assessments were really taunts and there is a wide body of evidence that we are nowhere near a bottom, except MAYBE in Temecula.

[barnaby33]

FLU its a troll post because his initial math is grossly unrealistic, his assessments were really taunts and there is a wide body of evidence that we are nowhere near a bottom, except MAYBE in Temecula.

[barnaby33]

FLU its a troll post because his initial math is grossly unrealistic, his assessments were really taunts and there is a wide body of evidence that we are nowhere near a bottom, except MAYBE in Temecula.

[barnaby33]

FLU its a troll post because his initial math is grossly unrealistic, his assessments were really taunts and there is a wide body of evidence that we are nowhere near a bottom, except MAYBE in Temecula.

[(former)FormerSanDiegan]

He may be a troll, but I think it’s educational to react to some of the more plausible points and either dispel or correct them as some may be common misconceptions.

Another strange assessment in the original post was that buying in 1994-1998 was “too early”. WIth an absolute bottom in price in late 1995/early 1996, consistently buying properties in the period from 1994-1998 would be pretty much ideal.

[(former)FormerSanDiegan]

He may be a troll, but I think it’s educational to react to some of the more plausible points and either dispel or correct them as some may be common misconceptions.

Another strange assessment in the original post was that buying in 1994-1998 was “too early”. WIth an absolute bottom in price in late 1995/early 1996, consistently buying properties in the period from 1994-1998 would be pretty much ideal.

[(former)FormerSanDiegan]

He may be a troll, but I think it’s educational to react to some of the more plausible points and either dispel or correct them as some may be common misconceptions.

Another strange assessment in the original post was that buying in 1994-1998 was “too early”. WIth an absolute bottom in price in late 1995/early 1996, consistently buying properties in the period from 1994-1998 would be pretty much ideal.

[(former)FormerSanDiegan]

He may be a troll, but I think it’s educational to react to some of the more plausible points and either dispel or correct them as some may be common misconceptions.

Another strange assessment in the original post was that buying in 1994-1998 was “too early”. WIth an absolute bottom in price in late 1995/early 1996, consistently buying properties in the period from 1994-1998 would be pretty much ideal.

[(former)FormerSanDiegan]

He may be a troll, but I think it’s educational to react to some of the more plausible points and either dispel or correct them as some may be common misconceptions.

Another strange assessment in the original post was that buying in 1994-1998 was “too early”. WIth an absolute bottom in price in late 1995/early 1996, consistently buying properties in the period from 1994-1998 would be pretty much ideal.

[kev374]

pretty silly. First off, what percentage of the workforce is actually in highly paid professions like Engineering, Medicine and Law? Perhaps not that many. Now filter again, what percentage of those in highly paid professions are highly experienced AND not already homeowners? I suspect a very small percentage. Now filter again, how many of these are couples where BOTH are in high paid professions?

You get the idea..what the OP is assuming as common is actually a VERY VERY miniscule part of the population.

Infact, I am in IT, most of my high earning friends are already homeowners with no plans to buy anything. MOST are married to wives whose professions are either stay home moms or teachers etc. Some whose wives are in IT are usually BSAs or Quality Control etc. which pays significantly less. This is the reality.

[kev374]

pretty silly. First off, what percentage of the workforce is actually in highly paid professions like Engineering, Medicine and Law? Perhaps not that many. Now filter again, what percentage of those in highly paid professions are highly experienced AND not already homeowners? I suspect a very small percentage. Now filter again, how many of these are couples where BOTH are in high paid professions?

You get the idea..what the OP is assuming as common is actually a VERY VERY miniscule part of the population.

Infact, I am in IT, most of my high earning friends are already homeowners with no plans to buy anything. MOST are married to wives whose professions are either stay home moms or teachers etc. Some whose wives are in IT are usually BSAs or Quality Control etc. which pays significantly less. This is the reality.

[kev374]

pretty silly. First off, what percentage of the workforce is actually in highly paid professions like Engineering, Medicine and Law? Perhaps not that many. Now filter again, what percentage of those in highly paid professions are highly experienced AND not already homeowners? I suspect a very small percentage. Now filter again, how many of these are couples where BOTH are in high paid professions?

You get the idea..what the OP is assuming as common is actually a VERY VERY miniscule part of the population.

Infact, I am in IT, most of my high earning friends are already homeowners with no plans to buy anything. MOST are married to wives whose professions are either stay home moms or teachers etc. Some whose wives are in IT are usually BSAs or Quality Control etc. which pays significantly less. This is the reality.

[kev374]

pretty silly. First off, what percentage of the workforce is actually in highly paid professions like Engineering, Medicine and Law? Perhaps not that many. Now filter again, what percentage of those in highly paid professions are highly experienced AND not already homeowners? I suspect a very small percentage. Now filter again, how many of these are couples where BOTH are in high paid professions?

You get the idea..what the OP is assuming as common is actually a VERY VERY miniscule part of the population.

Infact, I am in IT, most of my high earning friends are already homeowners with no plans to buy anything. MOST are married to wives whose professions are either stay home moms or teachers etc. Some whose wives are in IT are usually BSAs or Quality Control etc. which pays significantly less. This is the reality.

[Author]

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