Opinions please…

[goblue]

Thanks everyone for the feedback. There were a bunch of questions, that I thought I would address.

1. No, I do not work for a firm that received TARP funds. That is a nasty stigma these days, but you must remember 99% of the people in those firms are innocent bystanders who got hurt as well.

2. We currently live on a hill overlooking Birdrock now and really like the area. I work from home, so no commuting issues.

3. After 15 years in NYC, SD is a breath of fresh air. I actually love the small town feel and have no intentions of going back. I do miss my NY Giants games though.

4. I don’t know what your definition is of insanely wealthy is, but while I certaintly have no issues affording the home I don’t consider myself wealthy enough to blindy throw money away. This is a big decision for us and the difficult part is that it is a financial decision and a lifestyle decision. I am not approaching the home purchase as a personal ATM, which is partly what got the country into this mess in the first place. I would be more than happy with an average annual return of 1-2% over 10 years.

5. My wife wants the home because she believes we will happy there and after seeing 40 plus homes this was one of the only ones we liked. It also happened to be the least expensive. I on the other hand have a hard time in purchasing a depreciating asset, which is the reason for the original post. To be honest this whole dilemma is due to us having to vacate our current rental and our lack of interest in renting again.

6. SD Realtor – you stated that you believe I am overpaying. Is this belief on the current purchase price for a home in that area ($575 psf)or the speculation values will continue to decline? Because if you believe I am overpaying today and will have the furthur hit of a market decline that is a double whammy that will be tough to overcome.

Thanks again as I do value the insight.

[UCGal]

I notice you mentioned that you’ll have lower costs buying than your current rent.

Are you looking to own long term… In other words, is this a shelter decision?

Or are you looking at this purchase as an investment… where ROI is the bottom line.

I’m in the minority on this board, I think, since I tend to look at home purchases in terms of affordability of shelter. I don’t look at owning a house strictly in investment terms. It would be silly to do that if you don’t have plans to sell in the forseeable future.

If your plan is to buy, live there, and hold it for the long term… and this house meets your needs and you can afford it. Go for it.

But, if this is a stepping stone home… with plans to buy bigger/better in the future, or if you think the odds are decent you’ll be relocating in the future, don’t buy now… the prices will be coming down and you’ll lose money on the deal.

[UCGal]

I notice you mentioned that you’ll have lower costs buying than your current rent.

Are you looking to own long term… In other words, is this a shelter decision?

Or are you looking at this purchase as an investment… where ROI is the bottom line.

I’m in the minority on this board, I think, since I tend to look at home purchases in terms of affordability of shelter. I don’t look at owning a house strictly in investment terms. It would be silly to do that if you don’t have plans to sell in the forseeable future.

If your plan is to buy, live there, and hold it for the long term… and this house meets your needs and you can afford it. Go for it.

But, if this is a stepping stone home… with plans to buy bigger/better in the future, or if you think the odds are decent you’ll be relocating in the future, don’t buy now… the prices will be coming down and you’ll lose money on the deal.

[UCGal]

I notice you mentioned that you’ll have lower costs buying than your current rent.

Are you looking to own long term… In other words, is this a shelter decision?

Or are you looking at this purchase as an investment… where ROI is the bottom line.

I’m in the minority on this board, I think, since I tend to look at home purchases in terms of affordability of shelter. I don’t look at owning a house strictly in investment terms. It would be silly to do that if you don’t have plans to sell in the forseeable future.

If your plan is to buy, live there, and hold it for the long term… and this house meets your needs and you can afford it. Go for it.

But, if this is a stepping stone home… with plans to buy bigger/better in the future, or if you think the odds are decent you’ll be relocating in the future, don’t buy now… the prices will be coming down and you’ll lose money on the deal.

[UCGal]

I notice you mentioned that you’ll have lower costs buying than your current rent.

Are you looking to own long term… In other words, is this a shelter decision?

Or are you looking at this purchase as an investment… where ROI is the bottom line.

I’m in the minority on this board, I think, since I tend to look at home purchases in terms of affordability of shelter. I don’t look at owning a house strictly in investment terms. It would be silly to do that if you don’t have plans to sell in the forseeable future.

If your plan is to buy, live there, and hold it for the long term… and this house meets your needs and you can afford it. Go for it.

But, if this is a stepping stone home… with plans to buy bigger/better in the future, or if you think the odds are decent you’ll be relocating in the future, don’t buy now… the prices will be coming down and you’ll lose money on the deal.

[UCGal]

I notice you mentioned that you’ll have lower costs buying than your current rent.

Are you looking to own long term… In other words, is this a shelter decision?

Or are you looking at this purchase as an investment… where ROI is the bottom line.

I’m in the minority on this board, I think, since I tend to look at home purchases in terms of affordability of shelter. I don’t look at owning a house strictly in investment terms. It would be silly to do that if you don’t have plans to sell in the forseeable future.

If your plan is to buy, live there, and hold it for the long term… and this house meets your needs and you can afford it. Go for it.

But, if this is a stepping stone home… with plans to buy bigger/better in the future, or if you think the odds are decent you’ll be relocating in the future, don’t buy now… the prices will be coming down and you’ll lose money on the deal.

[patientrenter]

[quote=goblue]

…I don’t know what your definition is of insanely wealthy is, but while I certaintly have no issues affording the home I don’t consider myself wealthy enough to blindy throw money away. This is a big decision for us and the difficult part is that it is a financial decision and a lifestyle decision. I am not approaching the home purchase as a personal ATM, which is partly what got the country into this mess in the first place. I would be more than happy with an average annual return of 1-2% over 10 years.[/quote]

Wow! If you really will only be happy with selling in the future for more than you paid, then you are essentially saying that you are only happy with the price if you don’t really have to pay it, in the end. Sh*$#t, if that were true, I could buy a $5 million house! (My house budget is $300K.)

What happens if, in the future, you must sell, and the house is worth 30% less than you paid? With that scenario, how much would you be comfortable paying? Personally, that’s the number I’d be targeting for my budget. Then find the best house for that price.

[patientrenter]

[quote=goblue]

…I don’t know what your definition is of insanely wealthy is, but while I certaintly have no issues affording the home I don’t consider myself wealthy enough to blindy throw money away. This is a big decision for us and the difficult part is that it is a financial decision and a lifestyle decision. I am not approaching the home purchase as a personal ATM, which is partly what got the country into this mess in the first place. I would be more than happy with an average annual return of 1-2% over 10 years.[/quote]

Wow! If you really will only be happy with selling in the future for more than you paid, then you are essentially saying that you are only happy with the price if you don’t really have to pay it, in the end. Sh*$#t, if that were true, I could buy a $5 million house! (My house budget is $300K.)

What happens if, in the future, you must sell, and the house is worth 30% less than you paid? With that scenario, how much would you be comfortable paying? Personally, that’s the number I’d be targeting for my budget. Then find the best house for that price.

[patientrenter]

[quote=goblue]

…I don’t know what your definition is of insanely wealthy is, but while I certaintly have no issues affording the home I don’t consider myself wealthy enough to blindy throw money away. This is a big decision for us and the difficult part is that it is a financial decision and a lifestyle decision. I am not approaching the home purchase as a personal ATM, which is partly what got the country into this mess in the first place. I would be more than happy with an average annual return of 1-2% over 10 years.[/quote]

Wow! If you really will only be happy with selling in the future for more than you paid, then you are essentially saying that you are only happy with the price if you don’t really have to pay it, in the end. Sh*$#t, if that were true, I could buy a $5 million house! (My house budget is $300K.)

What happens if, in the future, you must sell, and the house is worth 30% less than you paid? With that scenario, how much would you be comfortable paying? Personally, that’s the number I’d be targeting for my budget. Then find the best house for that price.

[patientrenter]

[quote=goblue]

…I don’t know what your definition is of insanely wealthy is, but while I certaintly have no issues affording the home I don’t consider myself wealthy enough to blindy throw money away. This is a big decision for us and the difficult part is that it is a financial decision and a lifestyle decision. I am not approaching the home purchase as a personal ATM, which is partly what got the country into this mess in the first place. I would be more than happy with an average annual return of 1-2% over 10 years.[/quote]

Wow! If you really will only be happy with selling in the future for more than you paid, then you are essentially saying that you are only happy with the price if you don’t really have to pay it, in the end. Sh*$#t, if that were true, I could buy a $5 million house! (My house budget is $300K.)

What happens if, in the future, you must sell, and the house is worth 30% less than you paid? With that scenario, how much would you be comfortable paying? Personally, that’s the number I’d be targeting for my budget. Then find the best house for that price.

[patientrenter]

[quote=goblue]

…I don’t know what your definition is of insanely wealthy is, but while I certaintly have no issues affording the home I don’t consider myself wealthy enough to blindy throw money away. This is a big decision for us and the difficult part is that it is a financial decision and a lifestyle decision. I am not approaching the home purchase as a personal ATM, which is partly what got the country into this mess in the first place. I would be more than happy with an average annual return of 1-2% over 10 years.[/quote]

Wow! If you really will only be happy with selling in the future for more than you paid, then you are essentially saying that you are only happy with the price if you don’t really have to pay it, in the end. Sh*$#t, if that were true, I could buy a $5 million house! (My house budget is $300K.)

What happens if, in the future, you must sell, and the house is worth 30% less than you paid? With that scenario, how much would you be comfortable paying? Personally, that’s the number I’d be targeting for my budget. Then find the best house for that price.

[davelj]

FWIW – which is exactly what you’re paying for it (nothing) – a couple of observations.

One, the low end went nuts first and is shitting the bed first and it will bottom out first. The high end followed the low end during the ascent and it is lagging the low in during the decline. I’d assume another 20% decline from here for $750K+ properties. Just a guesstimate, of course.

Having said that… (a) A lot of folks can live with a 20% decline due to their situation, and (b) rates are so low that if you’re going to stay in the place for a LONG time, the lower interest rate will offset a large portion of a 20% decline.

If you really like the place and the potential “loss” is a very small part of your net worth, then why not buy it… Don’t get me wrong, I like my money as much as the next person, but sometimes waiting for that last nickel (in relative terms, of course) just isn’t worth it to me (personally). Life’s too short.

Just my 2 cents.

[davelj]

FWIW – which is exactly what you’re paying for it (nothing) – a couple of observations.

One, the low end went nuts first and is shitting the bed first and it will bottom out first. The high end followed the low end during the ascent and it is lagging the low in during the decline. I’d assume another 20% decline from here for $750K+ properties. Just a guesstimate, of course.

Having said that… (a) A lot of folks can live with a 20% decline due to their situation, and (b) rates are so low that if you’re going to stay in the place for a LONG time, the lower interest rate will offset a large portion of a 20% decline.

If you really like the place and the potential “loss” is a very small part of your net worth, then why not buy it… Don’t get me wrong, I like my money as much as the next person, but sometimes waiting for that last nickel (in relative terms, of course) just isn’t worth it to me (personally). Life’s too short.

Just my 2 cents.

[davelj]

FWIW – which is exactly what you’re paying for it (nothing) – a couple of observations.

One, the low end went nuts first and is shitting the bed first and it will bottom out first. The high end followed the low end during the ascent and it is lagging the low in during the decline. I’d assume another 20% decline from here for $750K+ properties. Just a guesstimate, of course.

Having said that… (a) A lot of folks can live with a 20% decline due to their situation, and (b) rates are so low that if you’re going to stay in the place for a LONG time, the lower interest rate will offset a large portion of a 20% decline.

If you really like the place and the potential “loss” is a very small part of your net worth, then why not buy it… Don’t get me wrong, I like my money as much as the next person, but sometimes waiting for that last nickel (in relative terms, of course) just isn’t worth it to me (personally). Life’s too short.

Just my 2 cents.

[davelj]

FWIW – which is exactly what you’re paying for it (nothing) – a couple of observations.

One, the low end went nuts first and is shitting the bed first and it will bottom out first. The high end followed the low end during the ascent and it is lagging the low in during the decline. I’d assume another 20% decline from here for $750K+ properties. Just a guesstimate, of course.

Having said that… (a) A lot of folks can live with a 20% decline due to their situation, and (b) rates are so low that if you’re going to stay in the place for a LONG time, the lower interest rate will offset a large portion of a 20% decline.

If you really like the place and the potential “loss” is a very small part of your net worth, then why not buy it… Don’t get me wrong, I like my money as much as the next person, but sometimes waiting for that last nickel (in relative terms, of course) just isn’t worth it to me (personally). Life’s too short.

Just my 2 cents.

[Author]

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