North Park

[blahblahblah]

I’m not so sure. Here’s the one thing that’s bugging me — money seems to be worth less every year. If you think that that trend will continue, then borrowing a bunch of money now might actually make some sense. Now you don’t want to overpay of course, but assuming that prices have come down 20% or so from the top, maybe you get in now at low interest rates and then in 10-15 years money is worth a lot less and your loan is looking like a bargain then?

Just guessing. But probably for most buyers they’re not thinking that far ahead, just “I want a house, here’s one I can make the payments on, I’ll take it.”

Or maybe they’re dumb.

[urbanrealtor]

[quote=JohnAlt91941]

Why do you think they “go bananas”? It’s not logical to buy a house that costs WAY more to buy than rent. If it doesn’t pencil out as a rental then why the demand?

To me it’s just bubble conditioning. People think buying at 30% or so off the peak is a great deal. Never mind that it’s still double the price of 12 years ago.[/quote]
Probably because it doesn’t cost way more to buy than rent at 15GRM.
Lets take an example:
If the property (as above) rents for 1500 per month, then that is 18000 per year.
15 GRM would make the purchase price $270,000.
An 80% loan would mean that a buyer would be paying less than $1300 P&I.
Thats assuming 6% as an interest rate (which would be high).
Throw in another 300 or so for tax and insurance and the numbers make sense.

This does not yet take into account mortgage interest deductions and government purchase incentives (which make yet more sense).

[urbanrealtor]

[quote=JohnAlt91941]

Why do you think they “go bananas”? It’s not logical to buy a house that costs WAY more to buy than rent. If it doesn’t pencil out as a rental then why the demand?

To me it’s just bubble conditioning. People think buying at 30% or so off the peak is a great deal. Never mind that it’s still double the price of 12 years ago.[/quote]
Probably because it doesn’t cost way more to buy than rent at 15GRM.
Lets take an example:
If the property (as above) rents for 1500 per month, then that is 18000 per year.
15 GRM would make the purchase price $270,000.
An 80% loan would mean that a buyer would be paying less than $1300 P&I.
Thats assuming 6% as an interest rate (which would be high).
Throw in another 300 or so for tax and insurance and the numbers make sense.

This does not yet take into account mortgage interest deductions and government purchase incentives (which make yet more sense).

[urbanrealtor]

[quote=JohnAlt91941]

Why do you think they “go bananas”? It’s not logical to buy a house that costs WAY more to buy than rent. If it doesn’t pencil out as a rental then why the demand?

To me it’s just bubble conditioning. People think buying at 30% or so off the peak is a great deal. Never mind that it’s still double the price of 12 years ago.[/quote]
Probably because it doesn’t cost way more to buy than rent at 15GRM.
Lets take an example:
If the property (as above) rents for 1500 per month, then that is 18000 per year.
15 GRM would make the purchase price $270,000.
An 80% loan would mean that a buyer would be paying less than $1300 P&I.
Thats assuming 6% as an interest rate (which would be high).
Throw in another 300 or so for tax and insurance and the numbers make sense.

This does not yet take into account mortgage interest deductions and government purchase incentives (which make yet more sense).

[urbanrealtor]

[quote=JohnAlt91941]

Why do you think they “go bananas”? It’s not logical to buy a house that costs WAY more to buy than rent. If it doesn’t pencil out as a rental then why the demand?

To me it’s just bubble conditioning. People think buying at 30% or so off the peak is a great deal. Never mind that it’s still double the price of 12 years ago.[/quote]
Probably because it doesn’t cost way more to buy than rent at 15GRM.
Lets take an example:
If the property (as above) rents for 1500 per month, then that is 18000 per year.
15 GRM would make the purchase price $270,000.
An 80% loan would mean that a buyer would be paying less than $1300 P&I.
Thats assuming 6% as an interest rate (which would be high).
Throw in another 300 or so for tax and insurance and the numbers make sense.

This does not yet take into account mortgage interest deductions and government purchase incentives (which make yet more sense).

[urbanrealtor]

[quote=JohnAlt91941]

Why do you think they “go bananas”? It’s not logical to buy a house that costs WAY more to buy than rent. If it doesn’t pencil out as a rental then why the demand?

To me it’s just bubble conditioning. People think buying at 30% or so off the peak is a great deal. Never mind that it’s still double the price of 12 years ago.[/quote]
Probably because it doesn’t cost way more to buy than rent at 15GRM.
Lets take an example:
If the property (as above) rents for 1500 per month, then that is 18000 per year.
15 GRM would make the purchase price $270,000.
An 80% loan would mean that a buyer would be paying less than $1300 P&I.
Thats assuming 6% as an interest rate (which would be high).
Throw in another 300 or so for tax and insurance and the numbers make sense.

This does not yet take into account mortgage interest deductions and government purchase incentives (which make yet more sense).

[JerseyGrl]

I live just south of St Augustines, and rent a MUCH nicer house on a 6K foot lot backing up to the canyon. We have been here 3 years without a rent increase, for 2 grand/mo. The owner paid 650 for it in 2005.

Prices are going down here, I just have to keep reminding myself how insanely prices have shot up in the last 6 years.

I can only dream of purchasing a house like this http://www.sdlookup.com/MLS-090027676-2404
on Pamo, just a short walk from the one on Palm. It’s in foreclosure and looks like someone is close to buying it.

[JerseyGrl]

I live just south of St Augustines, and rent a MUCH nicer house on a 6K foot lot backing up to the canyon. We have been here 3 years without a rent increase, for 2 grand/mo. The owner paid 650 for it in 2005.

Prices are going down here, I just have to keep reminding myself how insanely prices have shot up in the last 6 years.

I can only dream of purchasing a house like this http://www.sdlookup.com/MLS-090027676-2404
on Pamo, just a short walk from the one on Palm. It’s in foreclosure and looks like someone is close to buying it.

[JerseyGrl]

I live just south of St Augustines, and rent a MUCH nicer house on a 6K foot lot backing up to the canyon. We have been here 3 years without a rent increase, for 2 grand/mo. The owner paid 650 for it in 2005.

Prices are going down here, I just have to keep reminding myself how insanely prices have shot up in the last 6 years.

I can only dream of purchasing a house like this http://www.sdlookup.com/MLS-090027676-2404
on Pamo, just a short walk from the one on Palm. It’s in foreclosure and looks like someone is close to buying it.

[JerseyGrl]

I live just south of St Augustines, and rent a MUCH nicer house on a 6K foot lot backing up to the canyon. We have been here 3 years without a rent increase, for 2 grand/mo. The owner paid 650 for it in 2005.

Prices are going down here, I just have to keep reminding myself how insanely prices have shot up in the last 6 years.

I can only dream of purchasing a house like this http://www.sdlookup.com/MLS-090027676-2404
on Pamo, just a short walk from the one on Palm. It’s in foreclosure and looks like someone is close to buying it.

[JerseyGrl]

I live just south of St Augustines, and rent a MUCH nicer house on a 6K foot lot backing up to the canyon. We have been here 3 years without a rent increase, for 2 grand/mo. The owner paid 650 for it in 2005.

Prices are going down here, I just have to keep reminding myself how insanely prices have shot up in the last 6 years.

I can only dream of purchasing a house like this http://www.sdlookup.com/MLS-090027676-2404
on Pamo, just a short walk from the one on Palm. It’s in foreclosure and looks like someone is close to buying it.

[EconProf]

I am somewhat familiar with North Park from being an investor there and glazing contractor in the neighborhood long ago. It is a cutsey house in a cutsey area that strongly appeals to a lot of people. The size fits the scaled-down living trend of many who want to shed possessions, yard-work, commuting, and want walkable neighborhoods. A lot of posters on this site don’t want to accept the verdict of the marketplace.

[EconProf]

I am somewhat familiar with North Park from being an investor there and glazing contractor in the neighborhood long ago. It is a cutsey house in a cutsey area that strongly appeals to a lot of people. The size fits the scaled-down living trend of many who want to shed possessions, yard-work, commuting, and want walkable neighborhoods. A lot of posters on this site don’t want to accept the verdict of the marketplace.

[EconProf]

I am somewhat familiar with North Park from being an investor there and glazing contractor in the neighborhood long ago. It is a cutsey house in a cutsey area that strongly appeals to a lot of people. The size fits the scaled-down living trend of many who want to shed possessions, yard-work, commuting, and want walkable neighborhoods. A lot of posters on this site don’t want to accept the verdict of the marketplace.

[EconProf]

I am somewhat familiar with North Park from being an investor there and glazing contractor in the neighborhood long ago. It is a cutsey house in a cutsey area that strongly appeals to a lot of people. The size fits the scaled-down living trend of many who want to shed possessions, yard-work, commuting, and want walkable neighborhoods. A lot of posters on this site don’t want to accept the verdict of the marketplace.

[Author]

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