Shall we buy or never in San Diego or wait for more depreciation?

[temeculaguy]

FSD,

here’s the complex my buddy asked about, he’s already in escrow, the one I linked isn’t his, so if he falls out, that’s his problem, you can get it. I rented in that complex for 2 years, I liked it there, I paid 1500 and it was a struggle to find one for that price sometimes.

http://www.redfin.com/CA/Temecula/33576-Winston-Way-92592/unit-B/home/12509127

They peaked at 400k, their bottom was the 130k range, now 160k is normal and hard to find one available for more than an hour, unless it is the 1408 sq foot one, which does not have a backyard and is entirely upstairs (over the garages), the other two models of the triplex are more in demand, but they all work as rentals for 1500, they rent quick. I could have bought the one I rented for about 140k at the end of 2008, I lost so much sleep worrying about it and thinking about how nice it would be to just drop down a 40k downpayment and have a $535 P&I or a 5 year loan for 1880 P&I. Can you imagine having your mortgage be either the term or the payment of most cars. Sometimes when I’m mowing the grass and fighting gopers, or vaacuming 3200 sq feet when I only use 1,000 sq feet of it, I wish I had just bought the townhouse. Too late now, but I just wanted you to see the example of why my opinion is what it is, why I think 500k for a 2k rental is insane, I don’t even think 380k is right, I like 100-150x rent multipliers. Even if it’s at the beach, shouldn’t the fair rent be the decider of underlying value. If the place at the beach is worth more, then it should rent for more. If the place at the beach rents for half the cost of owning, then rent at the beach, if an inland house costs the same to buy or rent, then buy that house if you rent there. Formulas work everywhere, advice like “it’s a great time to buy” or “it’s a bad time to buy” that doesn’t work everywhere.

[pemeliza]

“It depends on what you are talking about…
For a SFR in a good school district it is not a ton.
For a 2 BR apartment in Normal Heights, well maybe it is.”

The rental market has deteriorated substantially in the last year. Anyone making a decision on rent versus buy right now needs to do a serious and honest assessment of today’s rental market. There are some amazing deals out there right now.

[pemeliza]

“It depends on what you are talking about…
For a SFR in a good school district it is not a ton.
For a 2 BR apartment in Normal Heights, well maybe it is.”

The rental market has deteriorated substantially in the last year. Anyone making a decision on rent versus buy right now needs to do a serious and honest assessment of today’s rental market. There are some amazing deals out there right now.

[pemeliza]

“It depends on what you are talking about…
For a SFR in a good school district it is not a ton.
For a 2 BR apartment in Normal Heights, well maybe it is.”

The rental market has deteriorated substantially in the last year. Anyone making a decision on rent versus buy right now needs to do a serious and honest assessment of today’s rental market. There are some amazing deals out there right now.

[pemeliza]

“It depends on what you are talking about…
For a SFR in a good school district it is not a ton.
For a 2 BR apartment in Normal Heights, well maybe it is.”

The rental market has deteriorated substantially in the last year. Anyone making a decision on rent versus buy right now needs to do a serious and honest assessment of today’s rental market. There are some amazing deals out there right now.

[pemeliza]

“It depends on what you are talking about…
For a SFR in a good school district it is not a ton.
For a 2 BR apartment in Normal Heights, well maybe it is.”

The rental market has deteriorated substantially in the last year. Anyone making a decision on rent versus buy right now needs to do a serious and honest assessment of today’s rental market. There are some amazing deals out there right now.

[Aecetia]

TG,

Great example, you always provide tangible examples of your argument. You are better off in the 3200. Try one of those robot vacuums. They work great on tile and all you have to do is clean them regularly. You can get them at Costco. That will free you up to hunt the gopher or you can hire Allan to shoot it. I think he was a sniper in his last life.

[Aecetia]

TG,

Great example, you always provide tangible examples of your argument. You are better off in the 3200. Try one of those robot vacuums. They work great on tile and all you have to do is clean them regularly. You can get them at Costco. That will free you up to hunt the gopher or you can hire Allan to shoot it. I think he was a sniper in his last life.

[Aecetia]

TG,

Great example, you always provide tangible examples of your argument. You are better off in the 3200. Try one of those robot vacuums. They work great on tile and all you have to do is clean them regularly. You can get them at Costco. That will free you up to hunt the gopher or you can hire Allan to shoot it. I think he was a sniper in his last life.

[Aecetia]

TG,

Great example, you always provide tangible examples of your argument. You are better off in the 3200. Try one of those robot vacuums. They work great on tile and all you have to do is clean them regularly. You can get them at Costco. That will free you up to hunt the gopher or you can hire Allan to shoot it. I think he was a sniper in his last life.

[Aecetia]

TG,

Great example, you always provide tangible examples of your argument. You are better off in the 3200. Try one of those robot vacuums. They work great on tile and all you have to do is clean them regularly. You can get them at Costco. That will free you up to hunt the gopher or you can hire Allan to shoot it. I think he was a sniper in his last life.

[an]

[quote=temeculaguy]… why I think 500k for a 2k rental is insane, I don’t even think 380k is right, I like 100-150x rent multipliers. Even if it’s at the beach, shouldn’t the fair rent be the decider of underlying value. If the place at the beach is worth more, then it should rent for more. If the place at the beach rents for half the cost of owning, then rent at the beach, if an inland house costs the same to buy or rent, then buy that house if you rent there. Formulas work everywhere, advice like “it’s a great time to buy” or “it’s a bad time to buy” that doesn’t work everywhere.[/quote]
TG, I wish I can get 100-150x rent multipliers around here. I just don’t see that happening with today’s rate. The area I bought, at the bottom of the last crash, it was around 125x rent, but rate was also at 8-9%. Something that was renting for $1200/month was going for around $150k. With 20% down and interest at 8%, PI was ~$800. Today, something that would rent for $1300/month is going for ~$190k. With 20% down and interest at 5%, PI would be ~$800. Something that rent for $1700/month is going for around $360k right now (was around $330k late 2008). PI today would be ~$1500/month and it was around $1400/month last year. If we do get 100-150x rent again, such house would have to drop another 30-50% from today’s level or 55-70% from peak.

I did some more digging and I think there’s a different rent multiplier for condo vs house. Some example, http://www.sdlookup.com/MLS-090068196-12655_Camino_Mira_Del_Mar_224_San_Diego_CA_92130 and http://www.sdlookup.com/MLS-090065246-10758_Dabney_35_San_Diego_CA_92126. The CV one can probably rent for ~$1700 while the MM one can probably rent for $1300. Both of those are w/in the 100-150x rent multiplier. However, I can’t find and SFR that fall into the 100-150x range, not even in MM. Can it possibly be that, SFR have a higher rent multiplier than condo?

Using a 2/2 condo in MM that current rent for $1300, it used to rent for around $900 in 1996. That condo today is selling for 180-190k. It sold for $78k in 1998 (http://www.sdlookup.com/Property-BCC73314-10758_Dabney_Dr_33_San_Diego_CA_92126). However, I can’t find any SFR around this same area selling for 86x rent multiple in the mid 90s.

[an]

[quote=temeculaguy]… why I think 500k for a 2k rental is insane, I don’t even think 380k is right, I like 100-150x rent multipliers. Even if it’s at the beach, shouldn’t the fair rent be the decider of underlying value. If the place at the beach is worth more, then it should rent for more. If the place at the beach rents for half the cost of owning, then rent at the beach, if an inland house costs the same to buy or rent, then buy that house if you rent there. Formulas work everywhere, advice like “it’s a great time to buy” or “it’s a bad time to buy” that doesn’t work everywhere.[/quote]
TG, I wish I can get 100-150x rent multipliers around here. I just don’t see that happening with today’s rate. The area I bought, at the bottom of the last crash, it was around 125x rent, but rate was also at 8-9%. Something that was renting for $1200/month was going for around $150k. With 20% down and interest at 8%, PI was ~$800. Today, something that would rent for $1300/month is going for ~$190k. With 20% down and interest at 5%, PI would be ~$800. Something that rent for $1700/month is going for around $360k right now (was around $330k late 2008). PI today would be ~$1500/month and it was around $1400/month last year. If we do get 100-150x rent again, such house would have to drop another 30-50% from today’s level or 55-70% from peak.

I did some more digging and I think there’s a different rent multiplier for condo vs house. Some example, http://www.sdlookup.com/MLS-090068196-12655_Camino_Mira_Del_Mar_224_San_Diego_CA_92130 and http://www.sdlookup.com/MLS-090065246-10758_Dabney_35_San_Diego_CA_92126. The CV one can probably rent for ~$1700 while the MM one can probably rent for $1300. Both of those are w/in the 100-150x rent multiplier. However, I can’t find and SFR that fall into the 100-150x range, not even in MM. Can it possibly be that, SFR have a higher rent multiplier than condo?

Using a 2/2 condo in MM that current rent for $1300, it used to rent for around $900 in 1996. That condo today is selling for 180-190k. It sold for $78k in 1998 (http://www.sdlookup.com/Property-BCC73314-10758_Dabney_Dr_33_San_Diego_CA_92126). However, I can’t find any SFR around this same area selling for 86x rent multiple in the mid 90s.

[an]

[quote=temeculaguy]… why I think 500k for a 2k rental is insane, I don’t even think 380k is right, I like 100-150x rent multipliers. Even if it’s at the beach, shouldn’t the fair rent be the decider of underlying value. If the place at the beach is worth more, then it should rent for more. If the place at the beach rents for half the cost of owning, then rent at the beach, if an inland house costs the same to buy or rent, then buy that house if you rent there. Formulas work everywhere, advice like “it’s a great time to buy” or “it’s a bad time to buy” that doesn’t work everywhere.[/quote]
TG, I wish I can get 100-150x rent multipliers around here. I just don’t see that happening with today’s rate. The area I bought, at the bottom of the last crash, it was around 125x rent, but rate was also at 8-9%. Something that was renting for $1200/month was going for around $150k. With 20% down and interest at 8%, PI was ~$800. Today, something that would rent for $1300/month is going for ~$190k. With 20% down and interest at 5%, PI would be ~$800. Something that rent for $1700/month is going for around $360k right now (was around $330k late 2008). PI today would be ~$1500/month and it was around $1400/month last year. If we do get 100-150x rent again, such house would have to drop another 30-50% from today’s level or 55-70% from peak.

I did some more digging and I think there’s a different rent multiplier for condo vs house. Some example, http://www.sdlookup.com/MLS-090068196-12655_Camino_Mira_Del_Mar_224_San_Diego_CA_92130 and http://www.sdlookup.com/MLS-090065246-10758_Dabney_35_San_Diego_CA_92126. The CV one can probably rent for ~$1700 while the MM one can probably rent for $1300. Both of those are w/in the 100-150x rent multiplier. However, I can’t find and SFR that fall into the 100-150x range, not even in MM. Can it possibly be that, SFR have a higher rent multiplier than condo?

Using a 2/2 condo in MM that current rent for $1300, it used to rent for around $900 in 1996. That condo today is selling for 180-190k. It sold for $78k in 1998 (http://www.sdlookup.com/Property-BCC73314-10758_Dabney_Dr_33_San_Diego_CA_92126). However, I can’t find any SFR around this same area selling for 86x rent multiple in the mid 90s.

[an]

[quote=temeculaguy]… why I think 500k for a 2k rental is insane, I don’t even think 380k is right, I like 100-150x rent multipliers. Even if it’s at the beach, shouldn’t the fair rent be the decider of underlying value. If the place at the beach is worth more, then it should rent for more. If the place at the beach rents for half the cost of owning, then rent at the beach, if an inland house costs the same to buy or rent, then buy that house if you rent there. Formulas work everywhere, advice like “it’s a great time to buy” or “it’s a bad time to buy” that doesn’t work everywhere.[/quote]
TG, I wish I can get 100-150x rent multipliers around here. I just don’t see that happening with today’s rate. The area I bought, at the bottom of the last crash, it was around 125x rent, but rate was also at 8-9%. Something that was renting for $1200/month was going for around $150k. With 20% down and interest at 8%, PI was ~$800. Today, something that would rent for $1300/month is going for ~$190k. With 20% down and interest at 5%, PI would be ~$800. Something that rent for $1700/month is going for around $360k right now (was around $330k late 2008). PI today would be ~$1500/month and it was around $1400/month last year. If we do get 100-150x rent again, such house would have to drop another 30-50% from today’s level or 55-70% from peak.

I did some more digging and I think there’s a different rent multiplier for condo vs house. Some example, http://www.sdlookup.com/MLS-090068196-12655_Camino_Mira_Del_Mar_224_San_Diego_CA_92130 and http://www.sdlookup.com/MLS-090065246-10758_Dabney_35_San_Diego_CA_92126. The CV one can probably rent for ~$1700 while the MM one can probably rent for $1300. Both of those are w/in the 100-150x rent multiplier. However, I can’t find and SFR that fall into the 100-150x range, not even in MM. Can it possibly be that, SFR have a higher rent multiplier than condo?

Using a 2/2 condo in MM that current rent for $1300, it used to rent for around $900 in 1996. That condo today is selling for 180-190k. It sold for $78k in 1998 (http://www.sdlookup.com/Property-BCC73314-10758_Dabney_Dr_33_San_Diego_CA_92126). However, I can’t find any SFR around this same area selling for 86x rent multiple in the mid 90s.

[Author]

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