So I pulled the trigger: My buying experience in Temecula (long story)

[NotCranky]

Congratulations and good luck on your new home!
Seems to me like retirees will be buying up homes in Temecula at the kinds of prices you guys are talking about and even more so if prices continue to drop. Those prices are going to be pretty competitive and Temecula seems very suitable for the relatively able bodied elderly with decent fixed incomes. Just one example..yesterday I was talking to an agent who has an elderly female client who can sell her home in Encanto which is a rough area in San Diego and will make a cash purchase of a brand new home in Temecula. My wife and I spent the long weekend in Prescott AZ.. It is mostly a retiree haven at 5,200 elevation a few hours north or Phoenix. Prices for similiar homes are also in the 400-600k range now. If this is an example of what other desirable retirement areas cost then I think Temecula can really compete.

[no_such_reality]

as to those of you who have any interst in my situation – my wife and I bought our rental. $350k for 1866 sq ft. one story. 3BD/2BA.

Congrats, you nailed it with the following: i ran all the numbers of renting vs buying. and candidly – i’m going to be paying about the same to buy this house compared to renting something similar.

That’s what everybody needs to keep in mind. If they can gamble on prices coming down 10-20% next year, they also gamble on three critical components: financing, inventory and upkeep.

With the prices mentioned here, the last three years of buyers will be priced-in to their homes, unable to sell unless they’re willing to go to foreclosure.

They’re also gambling that interest rates will stay near 50 year lows and not return to a more normal rates which will result in the same out of pocket.

The third gamble they’re taking is the quality of the home. I remember resale houses in the early 90s, upkeep is the first thing sacraficed when the money get’s tight. As you said, you’ve got the upgrades you want. Sellers are still updating homes to unload them, in another year, that’ll stop.

[no_such_reality]

as to those of you who have any interst in my situation – my wife and I bought our rental. $350k for 1866 sq ft. one story. 3BD/2BA.

Congrats, you nailed it with the following: i ran all the numbers of renting vs buying. and candidly – i’m going to be paying about the same to buy this house compared to renting something similar.

That’s what everybody needs to keep in mind. If they can gamble on prices coming down 10-20% next year, they also gamble on three critical components: financing, inventory and upkeep.

With the prices mentioned here, the last three years of buyers will be priced-in to their homes, unable to sell unless they’re willing to go to foreclosure.

They’re also gambling that interest rates will stay near 50 year lows and not return to a more normal rates which will result in the same out of pocket.

The third gamble they’re taking is the quality of the home. I remember resale houses in the early 90s, upkeep is the first thing sacraficed when the money get’s tight. As you said, you’ve got the upgrades you want. Sellers are still updating homes to unload them, in another year, that’ll stop.

[Reality]

They’re also gambling that interest rates will stay near 50 year lows and not return to a more normal rates which will result in the same out of pocket.

Not at all. Some people just don’t get it. There’s only so much purchasing power out there. Higher interest rates will make the prices go down more and faster. It won’t “result in the same out of pocket”.

[Reality]

They’re also gambling that interest rates will stay near 50 year lows and not return to a more normal rates which will result in the same out of pocket.

Not at all. Some people just don’t get it. There’s only so much purchasing power out there. Higher interest rates will make the prices go down more and faster. It won’t “result in the same out of pocket”.

[NotCranky]

Thank you John.
Here is another way of looking at it. Even if interest rates and the lowered pricing resulted in the same monthly costs, are there no advantages to having less debt or a better equity position?
Whoever buys using the logic demonstrated in you italicized quote,especially if they reasonably anticipate depreciatation ,as most here do….
…might have a debtor mentality. That said there is legitmate concern for interest rates. Hopefully the factor is considered appropriately and absolutely without fear. At this point it seems that concerns over a depreciating market and potential recession would have more weight in decision making than interest rates, especially if one is going to make a relatively highly leveraged purchase.

[NotCranky]

Thank you John.
Here is another way of looking at it. Even if interest rates and the lowered pricing resulted in the same monthly costs, are there no advantages to having less debt or a better equity position?
Whoever buys using the logic demonstrated in you italicized quote,especially if they reasonably anticipate depreciatation ,as most here do….
…might have a debtor mentality. That said there is legitmate concern for interest rates. Hopefully the factor is considered appropriately and absolutely without fear. At this point it seems that concerns over a depreciating market and potential recession would have more weight in decision making than interest rates, especially if one is going to make a relatively highly leveraged purchase.

[Ash Housewares]

Way to go newguy. You should do a search on this site for “amarillo”. A realtor from there was trying to sell a nasty pink 3600 sq ft house in Texas for 650,000. He’s since dropped it to 598,000, but it’s still $165 per sq ft IN TEXAS. He’d crap his pants if he heard about your deal.

[Ash Housewares]

Way to go newguy. You should do a search on this site for “amarillo”. A realtor from there was trying to sell a nasty pink 3600 sq ft house in Texas for 650,000. He’s since dropped it to 598,000, but it’s still $165 per sq ft IN TEXAS. He’d crap his pants if he heard about your deal.

[PerryChase]

There’s the link to the Amarillo property.
Why go to God foresaken Amarillo, TX, when you can buy cheaper in Temecula (close to LA, San Diego, Orange County).

You should send the link to the house you bought at $115/sf to that TX Realtor. How much do you think that house in Amarillo is worth?

http://piggington.com/life_is_good_in_amarillo

[PerryChase]

There’s the link to the Amarillo property.
Why go to God foresaken Amarillo, TX, when you can buy cheaper in Temecula (close to LA, San Diego, Orange County).

You should send the link to the house you bought at $115/sf to that TX Realtor. How much do you think that house in Amarillo is worth?

http://piggington.com/life_is_good_in_amarillo

[gn]

newguy, thanks very much for sharing your buying experience. No, you did not bore us. It was very interesting.

I’m curious about something:

23109VC paid $350k for: 1900 sq ft with landscaping.
newguy paid $422k for: 3668 sq ft without landscaping.

After factoring in the landscaping cost for newguy’s lot (6300 sq ft), can the rest of it be attributed to:

1. The difference between the location of the 2 house ?
2. newguy got a bargain (relative the market’s price) & 23109VC paid market price ?

I understand that, in the same neighborhood, the price per sq ft for a 3600 sq ft house will always be lower than that of a 1900 sq ft house. But in this case, the discrepancy is so large that there has to be something else.

[gn]

newguy, thanks very much for sharing your buying experience. No, you did not bore us. It was very interesting.

I’m curious about something:

23109VC paid $350k for: 1900 sq ft with landscaping.
newguy paid $422k for: 3668 sq ft without landscaping.

After factoring in the landscaping cost for newguy’s lot (6300 sq ft), can the rest of it be attributed to:

1. The difference between the location of the 2 house ?
2. newguy got a bargain (relative the market’s price) & 23109VC paid market price ?

I understand that, in the same neighborhood, the price per sq ft for a 3600 sq ft house will always be lower than that of a 1900 sq ft house. But in this case, the discrepancy is so large that there has to be something else.

[masayako]

“I understand that, in the same neighborhood, the price per sq ft for a 3600 sq ft house will always be lower than that of a 1900 sq ft house. But in this case, the discrepancy is so large that there has to be something else.”

Yes, intelligence. :-)) (Just kidding, I just can’t stop messin’ with you, 23109VC. Sorry…. )

[masayako]

“I understand that, in the same neighborhood, the price per sq ft for a 3600 sq ft house will always be lower than that of a 1900 sq ft house. But in this case, the discrepancy is so large that there has to be something else.”

Yes, intelligence. :-)) (Just kidding, I just can’t stop messin’ with you, 23109VC. Sorry…. )

[Author]

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