The bubble burst is finished. Time to jump in. lol.

[sdrealtor]

No problem. I always speak from what I see and tak eit for granted that those around here know that I focus on the NCC area. If I confuse you or anyone for that matter, let me know and I’ll do my best to clarify my point.

I agree with you about the $25,000. Today it seems like nothing while 5 years ago that was considered alot of money. It really speaks to how the runaway prices have impacted our frame of reference.

[an]

Funny how you say that about $25k. I totally agree. The funny part is that, when I watch Zip, some people lower their $500k+ house $5-10k at a time. I wonder if that will make anyone change their mind about the house after that kind of reduction.

[RDeNiro]

I hope I’m not the dummest guy in San Diego

I just sold my condo in torrey highlands for $519k, bought close to the peak of the market at $575k on May 2005. I was lucky to have a big gain on my previous condo so I was able to break even from this sale. But if prices would have gone down another $20k, I could have had an upside loan. I hope I’m not making a mistake. I could have rented the property and waited for house prices to stabilize.

[GoUSC]

Well it all depends on if you NEEDED to sell or not. If you could have held out until late 2008 or 2009 you probably should of. But if other forces would have meant you could not have then selling now is better than in six months when we have real bloodbath on our hands.

[SD Realtor]

R DeNiro you made the right move. Unless you wanted to sit in the condo for a few years, I think you did okay.

In general I do not agree with the forecast at all. I do not see what factors will stimulate a reversal of the market in the mid 2008 timeframe like these guys predict. Even if they used the previous 2 historical downtrends they need 6 years to shake out… There are to many wildcards here to make such a prediction and I just don’t see how they can overlook them.

I would like to see a more definitive explanation on how the inventory will be reduced, (what sort of uptick in demand will reduce the supply) and how the rise in foreclosures will be not only remedied, but how that will not affect pricing of non distressed property. Furthermore I would like them to explain how the tighter lending standards will not prohibit demand. (Although to be honest with everyone here I think that these supposed tighter lending standards will be enforced meekly at best)

Again, it would be nice if these studies and forecasts had more concrete reasoning behind the conclusions. To simply tell me that okay the depreciation will end in 08 or 09 just doesn’t cut it. Tell me why it will end and show me the factors that will reverse the trend.

SD Realtor

[RDeNiro]

I had an interest only loan and didn’t see any appreciation any time soon. So I was basically paying $3,300 without gaining any equity ( not including tax savings of about $500). I could have probably rented the same property for about $2,200. Plus I felt I was risking too much. It wasn’t the property I wanted to stay in for a long time I didn’t want to get stuck with it. I see the posts in this website and agree with most of it. But in the back of my mind I want to be objective and not agree with you because of wishful thinking.

[Bugs]

Just the fact that the unit already lost between the time you bought and the time you sold should tell you that getting out now was a good move.

Now you want to take the difference between the mortgage and your rent, and SAVE it instead of throwing it away on the IO mortgage payments.

[RDeNiro]

Exactly, I’ll save the money for a down payment for when properties are $50k to $100k cheaper. But you see these types of headlines and star to worry. I know I made a mistake buying at the peak of the market. I would hate to make another selling at the bottom.

[SD Realtor]

Well DeNiro, maybe you will be able to buy your unit back for 75k less then what you just sold it for another few years!

SD Realtor

[blahblahblah]

I had an interest only loan and didn’t see any appreciation any time soon.

Interest-only loan? Then you were speculating plain and simple and you should be thankful you were able to get out in time.

[sdcellar]

RDeNiro– Nobody can say for sure, of course, but I’d say you made the right decision unless you wanted to hold on to the place for years.

From the sound of it, I’d say your place was one of those Bellarado/Cortina units and you’ll be glad that you got out of there. There are (albeit small) SFRs selling in that area for right at $600K. It’s only a matter of time before those are in the fives and that just puts more downward pressure on those condos. I also think there are a lot of speculators in there based on the number of rentals I’ve seen come up over the past year.

I’d also say that at $519, you did pretty well for yourself based on recent comps. There does seem to be one that went for $580, but that must have been sold to a complete idiot (or somebody willing to pay a premium for no grass).

Again, time will tell, but I don’t think you’ll regret it. The headline might say the bottom is here, but the article says otherwise.

[ibjames]

You just pulled an indiana jones style escape, sliding under the door before it closes down on you. Dust yourself off and crack the whip for another adventure my friend

[SD Realtor]

Concho – Why did you say he was speculating with an interest only loan? I know many people who have bought and were not speculating and they used an interest only loan because they clearly thought they could make a better return then the interest rate. If you can make a better rate then it makes perfect sense doesn’t it?

SD Realtor

[blahblahblah]

With an I/O loan, you’ll never have equity without appreciation. So you’re automatically speculating on appreciation if you go I/O, otherwise you’d rent which is much less risky. Your friends were simply speculating in two different markets at once — with their down payment money in something else (stocks?) and housing using someone else’s money. If times got tough they were betting that they could refinance their debt obligation, perhaps converting their stocks to a down payment at that point.

I’m not saying it never makes sense to use I/O, but those loans are best used by the wealthy — they have the possibility of converting other wealth into a downpayment and going fixed-rate conventional if necessary, or selling and taking the loss. They are still speculating, but in a way which is only risky to themselves.

[Author]

Posts