UTC Condos

[unnamed0404]

Hi everyone, I’m a recent new grad working professional, have a little cash saved up, and was thinking about buying a condo in the UTC area to live in. I’ve gotten preapproved for around 400k, but don’t want to bite off more than I can chew. I was looking at getting a 1 or 2 bedroom at one of the following complexes: venetian, verano, lucera, should I do it? Prices have gone up like crazy the last couple of years, wish I had the money to buy then, and now that I do it seems like I’ve missed the boat. Anyone have any advice on whether I should wait? Or go for it?

[UCGal]

I wish jpinpb was still posting. She tracked these condos for years during the downturn. I know there were issues with at least one (slab or something) but don’t remember which one.

Look at the HOAs when you do your analysis. Not just the fees – but who well funded they are. Look at number of renters vs owners.

[spdrun]

I looked at a few units on Lebon Dr. (not sure of name of complex, but it may have been one of those) a year or two ago. They were selling for $150-200k for a one bedroom, but the broker mentioned (and research confirmed) multiple lawsuits between the developer and the HOA. Construction also seemed ultra-cheap, even by San Diego standards.

If you’re looking for a one/two bedroom, I’d either wait — the frenzy of last year is basically over, and appreciation has calmed. Hopefully the slowdown of QE3 and ensuing higher mortgage rates will put the kibosh on further growth in that department for the next year or two.

Other thing is that two bedrooms south of $300k ain’t exactly hard to come by. Get yourself a Listingbook account and search. You probably won’t find one without problems in UTC, but there are plenty of other decent neighborhoods where you’ll have no problem finding one.

Verano at least seems to be on the other side of Rte. 5, at least a mile from Black’s Beach and on a busy road. Not terribly walkable. What’s the advantage vs other more working-class areas to the south and east?

[livinincali]

So here’s a quick rent to buy calculation for the venetian. Obviously this is just current data I found but it’s in the ballpark. Craigslist posting look like this place rents for about $1400/mo for a 1 bedroom. A recent comp for 1 bedroom in this complex is $235K and the lowest current 1 bed listing is $259/K. So let’s just assume you can get one for $250K.

You don’t have a big down so we assume FHA financing.
You take out a loan for $240K @ 4.5% which corresponds to principal and interest of $1216/mo. Then we add FHA MIP which is 4375/12 = $364/mo + taxes 2815/12 = $234/mo + $169/mo HOA. Let’s assume the HOA covers insurance. So to buy costs = $1216+364+234+169 = $1983/mo. Doesn’t seem like all that great of a prospect to buy, when you can rent the same thing for $1400/mo

Another way to think about it is this way. Say you buy it and pay the extra $600/mo to buy versus renting. Say you want to sell the place in 5 years. 1/1 condo in UTC probably isn’t your long term home. In 5 years you spend $36000 extra dollars to buy vs rent (granted rents could go up so it might be somewhat less than this). In order to break even in 5 years you need 2.5% appreciation per year. The place needs to be worth $290K at the end of that 5 year period. Anything less than that and it would have been better to rent. Anything more and it was better to buy.

[spdrun]

Why pay $250k for a 1 bedroom when you can get one for $150k or $175k in almost as good of an area?

[FlyerInHi]

Where is almost as good for $100k less for a 1 bedroom?

[livinincali]

[quote=FlyerInHi]Where is almost as good for $100k less for a 1 bedroom?[/quote]

I don’t love it but how much different is Mira Mesa vs UTC?

[FlyerInHi]

Having done some research and having bought in Mira Mesa, I would say Mira Mesa is inferior, except maybe the newer part that is convenient to Sorrento Mesa and sought after by the tech professionals.

The complexes in Mira Mesa are more “ghetto” and not as well maintained. Plus UTC is “practically” La Jolla, haha… I’m not justifying the prices… Just saying almost as good is relative.

[spdrun]

Dude, if Mira Mesa is any part “ghetto”, I don’t know what you’d say in Oakland — perhaps it would cause your head to explode? 😀

[FlyerInHi]

Spd, I think coming from NY, you don’t have a southwest perspective.

It’s all relative and contextual. In Cali, if everything is not well manicured and parking spots aren’t free of oil stains, then it’s “ghetto”.

How old a complex it makes a difference. It’s not like NY where old is fine.

For example, quail creek in mm is kinda ghetto. That’s probably the only place you can get a 1/1 for $150 these days.

Also, in mission valley, I consider mission verde to be kinda ghetto. River colony is superior. There’s more of a mix in mission valley. Pretty much when you look at it, you know what you’re dealing with.

[spdrun]

Ghetto to me is parts of southeastern SD, parts of El Cajon (more of a hillbilly ghetto), and parts of Oceanside and Escondido. Older and not perfect-looking isn’t ghetto, it’s just older and imperfect.

I suppose the antipathy towards that is good, since it keeps prices down in some complexes vs others.

[unnamed0404]

Yes, I do know I can get the equivalent 1 or 2 bedroom in Mira Mesa for about 100k less, and I did look around there for a little bit, but to be honest, I don’t really want to live there. I saw some condos there, and they seemed pretty old, and I also wasn’t sure what the quality of the neighbors were.

I have lived in the UTC area for about 3 years, and have come to the conclusion that this is the type of area I’d want to live in, in terms of feel of the area, convenience, safety, etc. Also since this is a prime area (next to ucsd, qualcomm, utc mall, etc), I feel like it’d hold up its value moreso than other areas, even if they did take a dip. So in a way, I’d be buying mostly for the area. Not saying the condos themselves are good quality though, I think most (venetian, verano, lucera, vicenza) are actually apartment to condo conversions, which means they are lower quality (super thin walls, no garage, etc) and I even heard of plumbing problems in some of them.

There are some real nice townhomes in the Renaissance neighborhood, but I’d probably have to drop 300k+ for a 1 bedroom there…sigh.

In regards to rent vs own, I know that I would probably be able to pay slightly less to rent (1400 vs 1500-1600 to buy) at venetian ( I have enough for 20% down), but thats only a hundred or 2 more, and at least I’d be building equity and getting some more tax deductions right? The rent seems to be going up too.

[livinincali]

[quote=unnamed0404]
In regards to rent vs own, I know that I would probably be able to pay slightly less to rent (1400 vs 1500-1600 to buy) at venetian ( I have enough for 20% down), but thats only a hundred or 2 more, and at least I’d be building equity and getting some more tax deductions right? The rent seems to be going up too.[/quote]

If you have the 20% down then the calculation changes quite a bit. Then you’re only looking at the couple hundred dollars more to buy vs rent. Obviously UTC will have UCSD so there’s always going to be people to rent too, well at least as long as there isn’t some kind of pop in student loan financing. I guess the biggest thing to worry about would be what kind of shape is the HOA in for the complex you want to buy in. Last thing you want is a special easement for $10K because of some kind of neglected building maintenance.

[Anonymous]

I currently own a 2 bed/2 bath condo (1008 sqft) in the Marbella complex in La Jolla Colony (across the street from Vons on the park) Renovated in 2002. In the back of the complex. Last 3 comps averaged $418k. Putting it on the market next month to help pay for single family home. Would consider selling for $400k for a quick sale/smaller realtor commission. Contact me if you are interested.

[joec]

[quote=unnamed0404]Yes, I do know I can get the equivalent 1 or 2 bedroom in Mira Mesa for about 100k less, and I did look around there for a little bit, but to be honest, I don’t really want to live there. I saw some condos there, and they seemed pretty old, and I also wasn’t sure what the quality of the neighbors were.

I have lived in the UTC area for about 3 years, and have come to the conclusion that this is the type of area I’d want to live in, in terms of feel of the area, convenience, safety, etc. Also since this is a prime area (next to ucsd, qualcomm, utc mall, etc), I feel like it’d hold up its value moreso than other areas, even if they did take a dip. So in a way, I’d be buying mostly for the area. Not saying the condos themselves are good quality though, I think most (venetian, verano, lucera, vicenza) are actually apartment to condo conversions, which means they are lower quality (super thin walls, no garage, etc) and I even heard of plumbing problems in some of them.

There are some real nice townhomes in the Renaissance neighborhood, but I’d probably have to drop 300k+ for a 1 bedroom there…sigh.

In regards to rent vs own, I know that I would probably be able to pay slightly less to rent (1400 vs 1500-1600 to buy) at venetian ( I have enough for 20% down), but thats only a hundred or 2 more, and at least I’d be building equity and getting some more tax deductions right? The rent seems to be going up too.[/quote]

I think it’s really hard to put a price on living in a place you own vs. rent…Everyone would say to buy a single family home vs. a condo/townhome though since as mentioned, you can’t begin to guess who the other tenants are and condo’s / townhomes are just harder to sell, not to mention the HOA funding issues and it maybe harder to get a loan too if a large number there are renters.

I personally think the UTC area is tons better than Mira Mesa as well. Other than areas near Sorrento Valley which we shopped for as well, Mira Mesa overall just does look ghetto to me too…Too many large strip malls with high traffic, massive parking lots, etc…

I still get tons of grief from my wife for living in a crappy rental place before buying. To me, it was all about the numbers since I felt rent was throwing money away, but oh well…I could almost live anywhere.

At the end, I think the forums aren’t really a good place to figure out what to do since everyone else has a different situation. If you work in UTC and have already lived there for 3 years, you probably should know generally what the nice places are. Too expensive to buy a SFH, but with an almost equal rent/buy calc, it’s hard to say numbers wise, renting really makes sense. Of course, you have to factor in other job opportunities, the major you studied and would you move for more lucrative job offers (say silicon valley), etc…or if you will be married, etc…

Just make sure you plan to live there for at least 5+ years if you don’t want to lose money…You can rent it out, but since you may want to upgrade to a home later, you may need your down payment back so you’d have to sell.

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