Time to Buy?

[poorgradstudent]

With a bun in the oven, my wife and I are now very seriously thinking of buying a house this winter. We’re currently living in a spacious 1 bedroom apartment in mission valley and paying $1600/mo, but there’s no way we could stay here once the baby started growing and a 2/2 would be at least $2000/mo.

We actually have seen a couple houses in La Mesa we like. We’re pre-qualified for $350K by FHA loan, which seems pretty reasonable based on our incomes. With mortgage rates at 4.2% and not likely to fall too much below 4% in the next six months, I feel like this is a nice window of opportunity. Basically I look at the cost of buying a nice 3/2 sfh vs. renting the same sort of home, and buying comes out way ahead, even factoring in maintenance costs.

In short, we saw a place we like at a price we can afford and are thinking of making an offer. It’s not “perfect”; there’s carpet instead of hardwood and it’s a little further from the coast than we’d ideally like, but the neighborhood is nice, the schools are good, and we wouldn’t need to do major work to feel comfortable living there.

It’s kind of scary to be honest. Thinking about real estate was much easier when we couldn’t afford a house anyways and The Market was overpriced. Is it time to pull the trigger? How much under the list price are homes typically selling for right now?

[sdsubie]

My wife and I went through exactly the same decision process and ended up pulling the trigger and closed in late July.

List prices vary so much currently as far as how they relate to current market value. Comps will help you greatly when deciding how much to offer.

Is it a conventional sale, or short-sale or foreclosure? You timeline to closing could vary greatly depending on what kind of sale it is.

[UCGal]

Congrats on the bun in the oven. 🙂

[tdelamater]

We have a 2/2 for 1710 in the Arcadia complex just north of qualcomm stadium. That’s not the list price but if you shop around and ask for a deal you just might get it.

I found this tool invaluable http://www.irvinehousingblog.com/calculator/
just download it for excel (the web version is kinda slow).

I’m not trying to say this is not a good time to buy. I think it’s a decent time to buy all things considered. I’m just sharing what I’m looking at. We’re in the market ourselves. We made offers that didn’t work out (they were too good to be true in that price range and the comps showed it).

For a 10k foot view look at the chart in the bottom right hand corner “SD Home Price Snapshot” showing the difference between list price and sell price (price per square foot).

Ultimately your agent will do something similar (just much more focused) by running the comps in the area. From there you can make an educated guess on what a good price to come in at is.

[moneymaker]

When I first read the title I was thinking stocks. Ok houses? Well all things considered I think it is a good time to buy. We bought 2 1/2 years ago in Lemon Grove at what we thought was going to be the bottom. Zillow currently shows it worth about 5K above our purchase price. Although we paid over $200 per sq. ft. our place has a big lot came with upgraded kitchen, dual pane windows, newer roof. So it really all depends on the property. As any agent can tell you no 2 houses (well at least older houses) are the same. We didn’t get the fireplace we wanted but we are still glad we bought, just wish I hadn’t paid 1/2 point for the better interest rate. Oh well!

[Jazzman]

How much under list price are homes selling for is going to depend on price range, location and a host of other variables such as whether the home is distressed, how long it’s been on the market, and how motivated the seller is. You can get a rough guide with Redfin’s list to price graph, but it’s a good idea to do your own comparative market analysis. Run all sales of similar homes, and check to see what they were listed for prior to being sold. But remember, just because they average say 95% doesn’t mean you can’t haggle more off. Look for weaknesses, don’t be too swayed by your broker, and support you offer with facts. Play one seller off against another, don’t be afraid to low-ball, or walk away from several homes before deciding. So try and avoid falling in love with a home, and make sure your spouse in on the same page. Be very aware of broker stories like they’ve had several other or higher offers, or that bidding wars are happening everywhere. Try and get as much information about the home before you start paying for inspections; electrical, plumbing, roof, HVAC, remodeling, motivations for sale, seller’s personal circumstances, corner lot’s, easements, road noise, hazard zones etc. Remember, it is a buyer’s market, but more so for those who have done their homework. And remember that a home is just a chunk of timber thrown together to form a big box to hide in.

[Anonymous]

http://www.realestateforeclosures.net/ are very popular now

[Anonymous]

I meant foreclosed homes for sale

[markmax33]

Can you buy this house as a home you will both be happy in for 10 years? Can you send you kid to a good school in this school district? There is a model for our housing market over the next 10 years. It is called Japan. We will be in stagflation and I suspect housing prices will decline slowly as the FED prints money and inflates the currency until the housing prices are more reasonable as they drift down to meet median incomes.

[protorio]

Congrats on the growing family! Certainly clarifies some things. When rents begin to match mortgages for something larger with a yard, then it begins to make sense to me. Especially if its at least a 10-year residence. As has been and will be echoed here, pay for shelter, don’t invest. With cheap money, it can make a whole lot of sense.

La Mesa, in particular. Prices are very good, neighborhoods are quiet, tucked just outside the city proper, lots of families moving in as the original population ages. We wrung our hands over moving to La Mesa (coming from the coast), but we really like it. I’m surprised how much I like it. It helps that we found the type of house we liked (original mcm), but La Mesa has really grown on us.

Keep in mind that the yard, while a godsend for children (we have two little ones), will beg for money, time, and worry. At least in my case. I think about the yard *all* the time. There’s much I’d like to do, but it will be slow because of time and money.

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