short sale in encinitas ranch – good value?

[Eugene]

Also most all interest only loans are a 30 yr amortized loan with a 10 yr I/O period. At 6% this payment is 3410 not 3000. Second this would be a jumbo loan so that 6% rate would not happen, it would be more along the lines of 6.5% so now we are at 3694.

You’re using current rates, but 2003 was a bit different. National average rates for 5/1 IO ARMs were around 4.5%, jumbo or not. 682000 * 0.045 / 12 = $2557. Less if you have a down payment. Total housing payments (mortgage/insurance/etc.) on the order of $3600/month.

Lots of engineers, or similarly salaried professionals, perhaps even a few dual income types, pulling in a minimum of 100k per household.

In 2005, median household income of 92024 was around $77k.

[Eugene]

Also most all interest only loans are a 30 yr amortized loan with a 10 yr I/O period. At 6% this payment is 3410 not 3000. Second this would be a jumbo loan so that 6% rate would not happen, it would be more along the lines of 6.5% so now we are at 3694.

You’re using current rates, but 2003 was a bit different. National average rates for 5/1 IO ARMs were around 4.5%, jumbo or not. 682000 * 0.045 / 12 = $2557. Less if you have a down payment. Total housing payments (mortgage/insurance/etc.) on the order of $3600/month.

Lots of engineers, or similarly salaried professionals, perhaps even a few dual income types, pulling in a minimum of 100k per household.

In 2005, median household income of 92024 was around $77k.

[Eugene]

Also most all interest only loans are a 30 yr amortized loan with a 10 yr I/O period. At 6% this payment is 3410 not 3000. Second this would be a jumbo loan so that 6% rate would not happen, it would be more along the lines of 6.5% so now we are at 3694.

You’re using current rates, but 2003 was a bit different. National average rates for 5/1 IO ARMs were around 4.5%, jumbo or not. 682000 * 0.045 / 12 = $2557. Less if you have a down payment. Total housing payments (mortgage/insurance/etc.) on the order of $3600/month.

Lots of engineers, or similarly salaried professionals, perhaps even a few dual income types, pulling in a minimum of 100k per household.

In 2005, median household income of 92024 was around $77k.

[Eugene]

Also most all interest only loans are a 30 yr amortized loan with a 10 yr I/O period. At 6% this payment is 3410 not 3000. Second this would be a jumbo loan so that 6% rate would not happen, it would be more along the lines of 6.5% so now we are at 3694.

You’re using current rates, but 2003 was a bit different. National average rates for 5/1 IO ARMs were around 4.5%, jumbo or not. 682000 * 0.045 / 12 = $2557. Less if you have a down payment. Total housing payments (mortgage/insurance/etc.) on the order of $3600/month.

Lots of engineers, or similarly salaried professionals, perhaps even a few dual income types, pulling in a minimum of 100k per household.

In 2005, median household income of 92024 was around $77k.

[SD Realtor]

I did use current rates. I thought your intent was to show that these homes could be used to illustrate a viable purchase by Joe Blow today, not back in 2003.

I guess we are going in different directions, mine being that Joe Blow is losing ground in the overall race and that his housing selection is indeed shrinking.

SD Realtor

[SD Realtor]

I did use current rates. I thought your intent was to show that these homes could be used to illustrate a viable purchase by Joe Blow today, not back in 2003.

I guess we are going in different directions, mine being that Joe Blow is losing ground in the overall race and that his housing selection is indeed shrinking.

SD Realtor

[SD Realtor]

I did use current rates. I thought your intent was to show that these homes could be used to illustrate a viable purchase by Joe Blow today, not back in 2003.

I guess we are going in different directions, mine being that Joe Blow is losing ground in the overall race and that his housing selection is indeed shrinking.

SD Realtor

[SD Realtor]

I did use current rates. I thought your intent was to show that these homes could be used to illustrate a viable purchase by Joe Blow today, not back in 2003.

I guess we are going in different directions, mine being that Joe Blow is losing ground in the overall race and that his housing selection is indeed shrinking.

SD Realtor

[SD Realtor]

I did use current rates. I thought your intent was to show that these homes could be used to illustrate a viable purchase by Joe Blow today, not back in 2003.

I guess we are going in different directions, mine being that Joe Blow is losing ground in the overall race and that his housing selection is indeed shrinking.

SD Realtor

[Anonymous]

You need to decide if you want to flip the house or resell to a investor. Based upon this determination you can decide if the price is right. I usually figure your offer should be 80% of value for resale to an investor or 70% value if you plan to flip. (You have to figure the value based upon the market in the area.)

I try a offer at 40-60% of value when I approach the bank. Expect them to say “no” and wait for them to respond. Then go to bank with a 2nd offer based upon their counter. Your second offer should be your best offer based upon your expected use once you own it.

[Anonymous]

You need to decide if you want to flip the house or resell to a investor. Based upon this determination you can decide if the price is right. I usually figure your offer should be 80% of value for resale to an investor or 70% value if you plan to flip. (You have to figure the value based upon the market in the area.)

I try a offer at 40-60% of value when I approach the bank. Expect them to say “no” and wait for them to respond. Then go to bank with a 2nd offer based upon their counter. Your second offer should be your best offer based upon your expected use once you own it.

[Anonymous]

You need to decide if you want to flip the house or resell to a investor. Based upon this determination you can decide if the price is right. I usually figure your offer should be 80% of value for resale to an investor or 70% value if you plan to flip. (You have to figure the value based upon the market in the area.)

I try a offer at 40-60% of value when I approach the bank. Expect them to say “no” and wait for them to respond. Then go to bank with a 2nd offer based upon their counter. Your second offer should be your best offer based upon your expected use once you own it.

[Anonymous]

You need to decide if you want to flip the house or resell to a investor. Based upon this determination you can decide if the price is right. I usually figure your offer should be 80% of value for resale to an investor or 70% value if you plan to flip. (You have to figure the value based upon the market in the area.)

I try a offer at 40-60% of value when I approach the bank. Expect them to say “no” and wait for them to respond. Then go to bank with a 2nd offer based upon their counter. Your second offer should be your best offer based upon your expected use once you own it.

[Anonymous]

You need to decide if you want to flip the house or resell to a investor. Based upon this determination you can decide if the price is right. I usually figure your offer should be 80% of value for resale to an investor or 70% value if you plan to flip. (You have to figure the value based upon the market in the area.)

I try a offer at 40-60% of value when I approach the bank. Expect them to say “no” and wait for them to respond. Then go to bank with a 2nd offer based upon their counter. Your second offer should be your best offer based upon your expected use once you own it.

[Eugene]

The original statement to which I responded: “I don’t believe the average Joe Blow lives in Encinitas.”

In order to qualify for an interest-only mortgage for a house on Brae Mar Court in 2003, you had to make around 90k. Less if you had a down payment (say, this was your second house) or if you opted for a neg-am loan. A household with two schoolteachers, or one police officer and one clerk, could make that much. Income numbers for 92024 agree with that. Encinitas is above average, but it’s populated by considerable numbers of Joe Blows. It has to compete with other upper-middle-class suburbs and it is not as insulated from overall SoCal RE market as, say, Rancho Santa Fe. And Joe Blow’s purchasing power has been suffering lately (6.5% jumbo IO loans instead of 4.5%, problems with 100% CLTV loans, etc.)

Rising ARM interest rates and disappearance of creative financing have successfully priced out $90k/year households from the area. You seem to be implying that poorer households will be squeezed out of the city and well to do people will take over their properties, turning Encinitas into next Rancho Santa Fe. I disagree. The number of well to do people and the number of attractive properties are fairly constant. Encinitas is not the most attractive place in San Diego County. Instead the market will keep sinking as a whole, until two schoolteachers can afford a 4br in Encinitas again. (Even if they have to get an IO loan and spend 50% of their income on housing)

I expect the return to 2003 affordability levels in most areas. Even at 680k, 645 Brae Mar Ct would be far less affordable to residents of Encinitas today than it was in 2003. Incomes are up 10% (maybe), jumbo fixed interest rates are up 20-25%, and jumbo ARM interest rates are up 50%. The fact that there are 5 knife catchers bidding on this property? For me, not an argument to buy.

[Author]

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