NEED your input, About to buy a new Pienza home in 4S Ranch

[temeculaguy]

Buyorhold, my apologies if my posts sounded rude, it was meant in a spirit of humor. Ditto what SD said, you have to have thick skin on the blogs, but in trade you will get some wisdom and insight from some great minds that you might not encounter in your normal circles, and you might get some feedback from someone who screams at passing cars, the cost of free advice. If it was lending bubble you were referring to about mocking you (which I think it was) you have to admit you walked into it throwing down a deposit and then asking for advice. At least you were brave enough to not go with the “a friend of mine from work” angle, those crack me up.

[buyorhold]

It’s ok, I guess I am just really new at this. My husband was is the smart one, I did not listen to him, so he asked me to check out this blog.

Thanks for the advice.

[buyorhold]

It’s ok, I guess I am just really new at this. My husband was is the smart one, I did not listen to him, so he asked me to check out this blog.

Thanks for the advice.

[ocrenter]

first off, we are not at the bottom, not even close.

second, assuming $250,000. that means tax rate of 33% or $82,500 to taxes.

now $750,000 Pienza, at 20% down, will run you $3500/month, plus $1000/month property tax/mello roos, or $4500/month. $4500 x 33% = $1500/month in tax reduction.

that house will run you about $3000/month to rent. adding $1500/month lost to uncle sam, your cost to rent vs. cost to own is roughly the same.

now the question is which way is the price heading? read this. the median and the average prices are going up now, and some people may mistake it for us reaching the bottom and prices are now heading up, but read bob casagrande’s analysis and you’ll see the climbing numbers are completely artificial.

if price to rent vs. price to own is the same, what’s the harm of waiting one more year to see which way to go. you may actually be able to get into the Crosby, and not stuck in Pienza.

just my two cents.

[ocrenter]

first off, we are not at the bottom, not even close.

second, assuming $250,000. that means tax rate of 33% or $82,500 to taxes.

now $750,000 Pienza, at 20% down, will run you $3500/month, plus $1000/month property tax/mello roos, or $4500/month. $4500 x 33% = $1500/month in tax reduction.

that house will run you about $3000/month to rent. adding $1500/month lost to uncle sam, your cost to rent vs. cost to own is roughly the same.

now the question is which way is the price heading? read this. the median and the average prices are going up now, and some people may mistake it for us reaching the bottom and prices are now heading up, but read bob casagrande’s analysis and you’ll see the climbing numbers are completely artificial.

if price to rent vs. price to own is the same, what’s the harm of waiting one more year to see which way to go. you may actually be able to get into the Crosby, and not stuck in Pienza.

just my two cents.

[patientrenter]

buyorhold, as you can see you’ve entered a blog with a prevailing point of view. I share that view – that home prices are more likely to go down than up in the next few years – but I and many others here recognize we could be wrong.

I have a sister who is a teacher earning maybe 10-20% of what I earn. She has no financial education. I make a living designing complicated new financial products and negotiating with investment banks. She (like my other 4 siblings) bought properties years ago (and many thousands of miles away) that I thought were way too expensive. From her initial investment of a few $100K total, she now has no debt and several million dollars worth of property, just like my other siblings. I, the financial expert, always thought property I wanted to live in was overpriced, and now I can’t afford a small condo (using my own conservative affordability rationale). So don’t be intimidated by the geniuses here.

Having said all that, I wouldn’t buy right now. There are definite early signs of a classic cyclical downturn. Could be a false alarm, but I think you should be especially cautious and reflect on your capacity for patience.

Good luck either way!

Patient renter in OC

[patientrenter]

buyorhold, as you can see you’ve entered a blog with a prevailing point of view. I share that view – that home prices are more likely to go down than up in the next few years – but I and many others here recognize we could be wrong.

I have a sister who is a teacher earning maybe 10-20% of what I earn. She has no financial education. I make a living designing complicated new financial products and negotiating with investment banks. She (like my other 4 siblings) bought properties years ago (and many thousands of miles away) that I thought were way too expensive. From her initial investment of a few $100K total, she now has no debt and several million dollars worth of property, just like my other siblings. I, the financial expert, always thought property I wanted to live in was overpriced, and now I can’t afford a small condo (using my own conservative affordability rationale). So don’t be intimidated by the geniuses here.

Having said all that, I wouldn’t buy right now. There are definite early signs of a classic cyclical downturn. Could be a false alarm, but I think you should be especially cautious and reflect on your capacity for patience.

Good luck either way!

Patient renter in OC

[cyphire]

ocrenter – I think you may be forgetting that the 150K down payment is tied up and is not earning any income. Also – if it’s a new home – there will be 30-100K of landscaping, etc.

[cyphire]

ocrenter – I think you may be forgetting that the 150K down payment is tied up and is not earning any income. Also – if it’s a new home – there will be 30-100K of landscaping, etc.

[capeman]

4S was created during the boom and pushed up most heavily by speculation. Having it’s creation and overall pricing dictated by rationale not tied to economic or basic fundamentals it is a near-perfect micro-model. What happens there should directly correlate to the health and direction the overall SD market will go in the next 3-10 years. Being a lifer in San Diego and seeing what pricing is like from the great ranges of mortgage rates we’ve seen historically one should keep an eye on the 10year bond. It’s been popping lately and more popping will destroy pricing power in the near term and force price cuts. We may see the market begin to play out rather quickly.

The broad range of 20-60% I predict is due to the possible changes in the economic environment. If salaries increase at a fast rate in the next couple of years the housing may not go down much to meet with fundamentals. If the overall earning power of Americans vs. inflation continues to decrease as it has and interest rates continue to rise then 60% would not be out of the question.

cheers,

chris

[capeman]

4S was created during the boom and pushed up most heavily by speculation. Having it’s creation and overall pricing dictated by rationale not tied to economic or basic fundamentals it is a near-perfect micro-model. What happens there should directly correlate to the health and direction the overall SD market will go in the next 3-10 years. Being a lifer in San Diego and seeing what pricing is like from the great ranges of mortgage rates we’ve seen historically one should keep an eye on the 10year bond. It’s been popping lately and more popping will destroy pricing power in the near term and force price cuts. We may see the market begin to play out rather quickly.

The broad range of 20-60% I predict is due to the possible changes in the economic environment. If salaries increase at a fast rate in the next couple of years the housing may not go down much to meet with fundamentals. If the overall earning power of Americans vs. inflation continues to decrease as it has and interest rates continue to rise then 60% would not be out of the question.

cheers,

chris

[capeman]

My friend, I have no desire to live in 4S ranch as my parents live there and I don’t believe it will carry the charm it has now in about 10 years. My interest is purely inquisitive and scientific. I have been very curious about this area specifically since I watched each development go up. I’ve watched people sell houses for 250% over what they were 7 years ago. You don’t need a crystal ball to make predictions off of that.

If you think that that kind of short term gain is based on sound fundamentals then by all means go for it. Just please keep us updated yearly as my scientific mind is very interested in case studies. 7-10 years is not the most sound advice based on the unequaled growth the market has seen. You should bank on being stuck in the house for 10-15 based on historicals from like market boom/busts cycles in Japan and such.

I personally am looking to buy in the coastal area close to where I work and the wherewithall is not an issue. It’s a matter of getting the most for my money and not losing my hard-earned equity investment. That is called smart money investing.

As for your argument about having no data or facts to back up such arguments I don’t think you are a regular to this site. The data has been laid out and it does not point to a bottom. Predicting the bottom of any market has proven to be an near-impossible feat for even the best analysts. If I were you I would not be making such predictions based on inventory tracking. As we have seen in the past 2 years those levels can increase very rapidly and lacking the liquidity of other markets those stats can hit you in the bum very quickly. If you choose to buy then best of luck and enjoy your house to its fullest but for the benefit of the rest of us please keep us updated on the outcome of your case-study. We are all very interested.

cheers,

chris

[capeman]

My friend, I have no desire to live in 4S ranch as my parents live there and I don’t believe it will carry the charm it has now in about 10 years. My interest is purely inquisitive and scientific. I have been very curious about this area specifically since I watched each development go up. I’ve watched people sell houses for 250% over what they were 7 years ago. You don’t need a crystal ball to make predictions off of that.

If you think that that kind of short term gain is based on sound fundamentals then by all means go for it. Just please keep us updated yearly as my scientific mind is very interested in case studies. 7-10 years is not the most sound advice based on the unequaled growth the market has seen. You should bank on being stuck in the house for 10-15 based on historicals from like market boom/busts cycles in Japan and such.

I personally am looking to buy in the coastal area close to where I work and the wherewithall is not an issue. It’s a matter of getting the most for my money and not losing my hard-earned equity investment. That is called smart money investing.

As for your argument about having no data or facts to back up such arguments I don’t think you are a regular to this site. The data has been laid out and it does not point to a bottom. Predicting the bottom of any market has proven to be an near-impossible feat for even the best analysts. If I were you I would not be making such predictions based on inventory tracking. As we have seen in the past 2 years those levels can increase very rapidly and lacking the liquidity of other markets those stats can hit you in the bum very quickly. If you choose to buy then best of luck and enjoy your house to its fullest but for the benefit of the rest of us please keep us updated on the outcome of your case-study. We are all very interested.

cheers,

chris

[PD]

schizo said:

Many, not all, of the posters here are empty heads who are praying the market will go down, but even if it does they probably don't have the wherewithal to buy anyway. 4S is a very very desireable family community. The commute is about as good as it gets for a new home community in the SD area. I believe this is one of the reasons for 4Ss resilience to large price drops. There are many waiting on the side lines itching to buy and live in 4S. Stupid statements like "20% is in the bag and 60% is possible" for price drops with nothing to back up such a statement is worthless fortune telling.

You haven't been around here long if you believe this tripe.  We (long time Piggingtons)have investigated every angle of the market ad nauseam and there is no need to constantly reprint the facts that have already been stated over and over.  With the exception of a few areas that have held up so far, most areas in San Diego are already down 10 – 15% (including Coronado, which is a very desirable place to live).  With all of the resets coming, the recent increase in interest rates, and turning public sentiment, another 5 – 10% is almost assured.  Further, some new homes in Temecula are already nearly 30% down.

 You are a little short on facts yourself.  I will agree that there are a lot people waiting to buy.  I'm one of them (but not in 4S).  Many others here are also waiting to buy. Our pockets are full and our research is sound.  Fools jump in, dude.  Go swimming.

As for my head being empty, I'm glad I have one.  You might want to find a pumpkin patch.

[PD]

schizo said:

Many, not all, of the posters here are empty heads who are praying the market will go down, but even if it does they probably don't have the wherewithal to buy anyway. 4S is a very very desireable family community. The commute is about as good as it gets for a new home community in the SD area. I believe this is one of the reasons for 4Ss resilience to large price drops. There are many waiting on the side lines itching to buy and live in 4S. Stupid statements like "20% is in the bag and 60% is possible" for price drops with nothing to back up such a statement is worthless fortune telling.

You haven't been around here long if you believe this tripe.  We (long time Piggingtons)have investigated every angle of the market ad nauseam and there is no need to constantly reprint the facts that have already been stated over and over.  With the exception of a few areas that have held up so far, most areas in San Diego are already down 10 – 15% (including Coronado, which is a very desirable place to live).  With all of the resets coming, the recent increase in interest rates, and turning public sentiment, another 5 – 10% is almost assured.  Further, some new homes in Temecula are already nearly 30% down.

 You are a little short on facts yourself.  I will agree that there are a lot people waiting to buy.  I'm one of them (but not in 4S).  Many others here are also waiting to buy. Our pockets are full and our research is sound.  Fools jump in, dude.  Go swimming.

As for my head being empty, I'm glad I have one.  You might want to find a pumpkin patch.

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