make my first time home purchase

[Anonymous]

Look jackass, you can’t solicit speculative opinions and then object to comments for being speculative, or lacking “proof.” Of course no one has a crystal ball (that works anyway), that’s why, in part, there are market cycles. Hey, if we could all see the future then we wouldn’t even be having this discussion b/c there’s no way in hell you’d be buying that money-pit you’re about to close on.

[lendingbubblecontinues]

Final thoughts for our friend in Escondido. You wanted 50-75k in "equity" five years henceforth, in order to buy a place in Denver. Well, had you rented a nice place for $1750 a month and saved the other $1750 you are going to spend on your mortgage, etc., you'd have saved up $105,000 over the next five years. The loss of tax deductibility of mortgage interest would have some impact here, however, I think it is plain to see that you blew it. Oh well. Someone here said it best: "it's your money" , only I'd have put it like this: "it was your money".

 

Good luck.

[SD Realtor]

Hi David –

I am not sure where to start. First off as you know everyone and EVERYTHING on this board is speculative. With that said, my friend Powayseller who is one of the more bearish posters, always backs her speculation up with really good arguments. Again though, all of our postings are simply speculations so don’t get to bummed out by them okay?

I am a Realtor and I would say that if you are happy where you live, and you like the schools, and you are not in an arm loan then I think you will do just fine. Some of use like Escondido and some of us don’t but don’t sweat it if people badmouth it compared to Del Mar or La Jolla.

My personal opinion, and it is VERY SPECULATIVE, is that the market will depreciate over the next 2 years at least. That depreciation rate will vary on a few things, first and foremost being a recession that can be as light as a simple slowdown or decelleration of the economy or a heavier one due to loss of lost of jobs. I think it will be middle of the road, many others think it will be heavier. Anyways I believe the current pricing has already depreciate by at least 5-10% in Escondido and will continue. I personally think you can get a better deal if you wait a year or two.

With that said, buying now, if it makes you happy is okay. I think that in 5 years you “could” see that 10-15% appreciation you are seeking. However, what makes me uncomfortable is that you “could” just as well be underwater at that time.

Yes San Diego is the best place on Earth (IMO) yet it is the 6th least affordable place to buy a home. Also note you are buying a home at a time where we have more inventory then we have had in years. This point is not speculative, it is fact. You are also buying at a time when prices are depreciating, market times are lengthening, and cancelled and expirations are increasing. This is not speculative either. Finally NODs and Foreclosures are also increasing. This is not speculative.

So with that said, I think again, you would be better served financially to buy when these indicators start to level out.

If you have not past your contingency period you can exit without loss of deposit.

However, if you are gonna be there several years, you will be okay in the long run. Hang in there and if you need any advice, please don’t be afraid to post.

[CardiffBaseball]

I have a 6 figure job software job, the wife does ok teaching at a private school (not public school money though), and in no manner do I want to spend $3500 to buy a home in Escondido. I’ll continue to rent and we are both upper 30’s with elementary aged kids. They still have bedrooms, and a place to play, and we don’t live in a less than desirable town.

The thing you need to realize David Peace is that most of the folks on here are doing fine, and are seeking to make the wisest use of our resources. Right now buying a depreciating home isn’t smart, if your horizon to sell is so short. You are simply dismissing everything as negative when post after post on this board outlines very good reasons with DATA that explains most of the opinions of the market around here.

If you truly were here for over a year you’d know about some of the folks who sold out and are sitting on large wads of cash waiting for a better time. And they are discovering how easy it is to make 5% on that money while waiting.

[ocrenter]

david, 6 figure income is nice, but not nice enough for the type of prices available these days.

let’s just assume you make $120,000. Monthly would be $10,000, but take home after tax would only be $6600.

Most of the decent places out there still command $600,000. Let’s assume you have 20% down and your credit allow you to get a 30 year 6.5% fixed. you’re now looking at $3000/month of mortgage. property tax would take up another $500/month and let’s shave off another $100/month for HOA. now you are down to $3000/month for you and your family. (note I didn’t count mello roos because I don’t know if you have it or not).

You’ll be significantly dependent on the need for this house to appreciate because at such high cost of owning you are looking at maybe only saving $5-6000/year. Renting a similar home for $2000/month will enable you to double that saving rate.

escondido may be fine in your mind, but when there’s a downturn it will get hit hard. Lennar didn’t decide to drop their Eureka Springs prices down by $100,000 between June to August across the board for no reason.

[JES]

David, since you mentioned you are moving right next to San Marcos, this has to be the development off of Barham Ln near the Woodland Parkway exit on the border between Escondido and San Marcos? If so there are things you need to know about that area.

For starters, the San Marcos neighborhoods directly to the west are flooded with homes for sale. Look at Silvercrest, the bigger homes next door. Big price reductions there. Then go further down Barham, take a left on LaMore and look at that gated community on your right side. It is adjacent to Cal State and there are 15+ homes for sale in that small gated community, and some are being foreclosed with others on the way. Then look at that huge monstrosity of a track that rises over Woodland Parkway near what I’m assuming is your chosen n-hood. That is called the Sprinter and will soon have 2 x diesel trains running from 6 am until 11 at night, every 15 minutes all day long. On top of all this, the area is surrounded by mobile home parks and there is a major gang tagging problem. The n-hood I’m guessing you have chosen was tagged with a huge gang symbol (over 50 feet long) last year.

[davidpeace]

our house is not on the border of San Marcos, but is still considered the “west” side of Escondido. We are still about a mile-ish east of the 15. And also about a mile north of the 78. It’s a country club area (near Riedy Creek). There arent any train tracks, and aren’t mobile homes either. It’s all new communities around there.

[waiting hawk]

Please buy in San Elijo Hills!

My website tracking Temecula and South Riverside County

[Daniel]

David,

Just my 2 cents: if you can afford it, like it, and feel better that way, by all means, go for it. From a purely financial perspective, I think it’s better to wait. But if customization and other things are important to you, and if you can’t find a rental that you like (although this is really doubtful, you can nowadays rent one-million-plus homes easily), then yes, you should buy. Just keep in mind that, although nobody can predict the future, there are pretty solid signs that prices have further room to fall.

Regarding the insults that went back and forth, I am not going to apologize for what others have written (they should do that). But I would prefer if you didn’t insult back all the regulars here when you are attacked. If someone calls you a moron, it’s only fitting that you respond in kind, but please direct your anger only at those who deserve it. Thanks, and good luck to you.

[bob007]

my advice to david:

house is a social need. you must be smart to be a software architect. home is not a financial asset. i know it costs a lot of money to get one. if you cannot afford to take a loss on your house do not buy it.

[avidsaver]

Davidpeace,
I’m totally new to this site — as a matter of fact I just ran across it today for the first time. Some observations that I have made while reading through this thread:

– It appears that you’re looking for validation, not advice. There were “polite” comments before your first response, yet your only reaction was to get defensive about your decision to buy.

– Your decision to buy seems to be based on sound reasons (non-financial) until you mention wanting to sell at a 10% to 15% profit in five years. That’s speculative, and is certainly subject to a LOT of risk, especially given recent news (as in yesterday’s home sales figures)

If you can afford to buy, then by all means, buy. But know that this website seems to be dedicated to the research of the real estate “bubble.” I’m here (as I’m sure is the norm) because I am hoping that there is a bubble and that I can get in when it bursts. You’re not going to find a lot of validation here. Sure, some of the “regulars” may have strong opinions, but if you can’t stand the heat… well, you know the rest.

Why not consider some of the advice that you’re getting to back out of the contract now so that you can rent and save the difference? Buying a house is a BIG investment, and if you were so certain about your decision, you wouldn’t be posing this question here. You’ll get the $$ that you’re looking for from the house if you just invest the difference in an ING Direct or an Emigrant Direct account.

I think that you already knew what to expect when you asked, “Are we screwed?”

BTW — to others — what’s a “troll?”

[NateK]

Poor David,

You know what this drama kinda reminds me of. I remember when my brother, who also brings in over 6 figures. An all around bright guy or so I thought. Well he was going out with this gold-digging B!+ch…And he was in love, she was the only one for him and he was thinking about marrying her until he finally saw her for the lazy gold-digging good for nothing that we all saw her for. And then he thanked me..But then he meets this new girl…And it’s like a different year but virtually the same type of girl…We again remind him of the previous girl but he thinks this one is different.

Well the idiot got trapped and got her pregnant…She supposedly said she was on the pill, but ohhh well. And now they’re married with a kid. The nanny pretty much raises the baby…I’m serious the most I’ve heard her do was try and breast feed the baby the first couple days after birth and that didn’t work out. And now she does virtually nothing except just sit her lazy butt at home, spends most of the money and gains weight. Honestly she did look pretty good before the baby…But 2 years later and 40 lbs later. It’s like she pulled the rip cord. Poof!!!!

Sorry, but anyways…Moral of the story. People are obviously gonna keep going after what they are attracted to no matter how sound the advice. But for David…It’s still not too late. I know it feels great right now, but PULL OUT DAVID!!! No pun intended. Look through all the numbers and data provided for you here. You listened once and you were rewarded and you thanked this site. Remember that gold diggin B!+ch that was gonna take your money last year…Well it’s a new year, a new house, but the same downturn(B!+ch).

[Anonymous]

That’s classic. Are you a Tom Leykis listener Nate?

[PerryChase]

Nate, my brother is in pretty much the same situation as your bro. Some of the things that my sister-in-law pulls to get attention is hillarious. The drama is kinda fun to to watch.

I think however that women are socialized to find husbands who’ll take care of them.

For me, egalitarian relationships are the best.

[avidsaver]

Hey, hey, hey!!!

I was in the reverse situation (I’m the woman), and I guess in retrospect, divorce saved me. We were homeowners, and after divorce, we had to sell the house. Bought in 2002 for $285K, sold in 2005 for $525K. I made the mortgage payments, but I had to split the value. He took his $ and bought a condo for $305K (900 square feet). Long story short, I’m holding my cash, renting, and waiting…

But HEY!!! Not all women are gold diggers that are “socialized to find husbands who’ll take care of them.”

I hope this doesn’t come across as a bitter response — it’s not intended that way at all…

[Author]

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