What is a sensible criteria to determine when to pull the trigger?

[carlsbadworker]

I think one of the worst thing could happen in a bear market is that people will keep lowering their buy criteria because of all the incoming bad news. For equity, an easy solution is dollar cost average. However, most people couldn’t do that for property.

So what is my fellow piggie’s criteria to determine when to pull the trigger?
I have seen a lot being talked about to judge the existence of a bubble, such as house/income ratio, house/rent ratio, median house affordability, cash flow, etc. However, after recent price drops, some of the metrics are not looking so bad anymore. For example, I am looking at the Temecula area, I think the house/rent ratio is about 160 now if not lower. Median home affordability also has improved greatly.

So what should be a sensible criteria? Positive cashflow (Rent compares with PITI)? $100/sqft? Nominal price of 2002? 2001? or even 1999? Like TG, I can afford the current price, but I don’t want to catch a falling knife. I also do not want to wait for the absolute bottom since I want more choices for the properties not just leftovers.

I am torn by the numberous criteria people throw out. I like to get it down to a single criteria so that I could jump without hesitation when it is priced right.

Can you help? Thanks

[DWCAP]

Any one single criteria could be off. Now I am no expert on any of this, so take that with a grain of salt. But I came here to learn all about this crap and if there is anything that I have learned it is that you can’t just focus on one thing. It is a complex dance, and if you only know one step your either gonna get kicked in the shin or steped on. Look at rent ratio’s, look at PPSFT, Look at interest rates and vacancy rates and overestimate everything alittle. You won’t get that ultra low rate, you wont get that top 1% rent, and you will have higher costs than you realize in the beginning. And dont count appreciation into the equation, atleast for the first 5 years. If you can do all those things, and it still is decent to buy, then you’ll be ok. Just dont wait for your magic number in one criteria and just sit.
That is the biggest thing I have learned here. Correct me if I am wrong.

[DWCAP]

Any one single criteria could be off. Now I am no expert on any of this, so take that with a grain of salt. But I came here to learn all about this crap and if there is anything that I have learned it is that you can’t just focus on one thing. It is a complex dance, and if you only know one step your either gonna get kicked in the shin or steped on. Look at rent ratio’s, look at PPSFT, Look at interest rates and vacancy rates and overestimate everything alittle. You won’t get that ultra low rate, you wont get that top 1% rent, and you will have higher costs than you realize in the beginning. And dont count appreciation into the equation, atleast for the first 5 years. If you can do all those things, and it still is decent to buy, then you’ll be ok. Just dont wait for your magic number in one criteria and just sit.
That is the biggest thing I have learned here. Correct me if I am wrong.

[DWCAP]

Any one single criteria could be off. Now I am no expert on any of this, so take that with a grain of salt. But I came here to learn all about this crap and if there is anything that I have learned it is that you can’t just focus on one thing. It is a complex dance, and if you only know one step your either gonna get kicked in the shin or steped on. Look at rent ratio’s, look at PPSFT, Look at interest rates and vacancy rates and overestimate everything alittle. You won’t get that ultra low rate, you wont get that top 1% rent, and you will have higher costs than you realize in the beginning. And dont count appreciation into the equation, atleast for the first 5 years. If you can do all those things, and it still is decent to buy, then you’ll be ok. Just dont wait for your magic number in one criteria and just sit.
That is the biggest thing I have learned here. Correct me if I am wrong.

[DWCAP]

Any one single criteria could be off. Now I am no expert on any of this, so take that with a grain of salt. But I came here to learn all about this crap and if there is anything that I have learned it is that you can’t just focus on one thing. It is a complex dance, and if you only know one step your either gonna get kicked in the shin or steped on. Look at rent ratio’s, look at PPSFT, Look at interest rates and vacancy rates and overestimate everything alittle. You won’t get that ultra low rate, you wont get that top 1% rent, and you will have higher costs than you realize in the beginning. And dont count appreciation into the equation, atleast for the first 5 years. If you can do all those things, and it still is decent to buy, then you’ll be ok. Just dont wait for your magic number in one criteria and just sit.
That is the biggest thing I have learned here. Correct me if I am wrong.

[DWCAP]

Any one single criteria could be off. Now I am no expert on any of this, so take that with a grain of salt. But I came here to learn all about this crap and if there is anything that I have learned it is that you can’t just focus on one thing. It is a complex dance, and if you only know one step your either gonna get kicked in the shin or steped on. Look at rent ratio’s, look at PPSFT, Look at interest rates and vacancy rates and overestimate everything alittle. You won’t get that ultra low rate, you wont get that top 1% rent, and you will have higher costs than you realize in the beginning. And dont count appreciation into the equation, atleast for the first 5 years. If you can do all those things, and it still is decent to buy, then you’ll be ok. Just dont wait for your magic number in one criteria and just sit.
That is the biggest thing I have learned here. Correct me if I am wrong.

[sdduuuude]

Well put DWCAP.

I’d say an important indicator would be 3 to 6 consecutive months of positive year-over-year sales growth.

Once that happens, I’ll start looking at all the other numbers. Until that happens, I’ll just keep
reading forums and hoping for my industry to stay healthy and for housing prices to crash.

Also – remember you need two things to pull the trigger 1) the right market conditions and 2) the right personal finance conditions.

Alot of people waiting for the market may not be ready when the time is right so add “personal financial situation” to the list of indicators.

[sdduuuude]

Well put DWCAP.

I’d say an important indicator would be 3 to 6 consecutive months of positive year-over-year sales growth.

Once that happens, I’ll start looking at all the other numbers. Until that happens, I’ll just keep
reading forums and hoping for my industry to stay healthy and for housing prices to crash.

Also – remember you need two things to pull the trigger 1) the right market conditions and 2) the right personal finance conditions.

Alot of people waiting for the market may not be ready when the time is right so add “personal financial situation” to the list of indicators.

[sdduuuude]

Well put DWCAP.

I’d say an important indicator would be 3 to 6 consecutive months of positive year-over-year sales growth.

Once that happens, I’ll start looking at all the other numbers. Until that happens, I’ll just keep
reading forums and hoping for my industry to stay healthy and for housing prices to crash.

Also – remember you need two things to pull the trigger 1) the right market conditions and 2) the right personal finance conditions.

Alot of people waiting for the market may not be ready when the time is right so add “personal financial situation” to the list of indicators.

[sdduuuude]

Well put DWCAP.

I’d say an important indicator would be 3 to 6 consecutive months of positive year-over-year sales growth.

Once that happens, I’ll start looking at all the other numbers. Until that happens, I’ll just keep
reading forums and hoping for my industry to stay healthy and for housing prices to crash.

Also – remember you need two things to pull the trigger 1) the right market conditions and 2) the right personal finance conditions.

Alot of people waiting for the market may not be ready when the time is right so add “personal financial situation” to the list of indicators.

[sdduuuude]

Well put DWCAP.

I’d say an important indicator would be 3 to 6 consecutive months of positive year-over-year sales growth.

Once that happens, I’ll start looking at all the other numbers. Until that happens, I’ll just keep
reading forums and hoping for my industry to stay healthy and for housing prices to crash.

Also – remember you need two things to pull the trigger 1) the right market conditions and 2) the right personal finance conditions.

Alot of people waiting for the market may not be ready when the time is right so add “personal financial situation” to the list of indicators.

[Navydoc]

I look at it this way: the longer I wait the nicer the house I can afford becomes. Whatever happens to the market, I’m going to be looking in the 700-850k range. Last year when I started posting that meant a 2400 sq ft North county house built around 1998 or so. Now that money buys 3000+ sq ft built in 2004+. I will be buying in the Spring. Why? Because I need to, and if my fingers get a little bit bloody I’m willing to accept it if I find a home I’m happy to retire in. Besides, I’m an Obstetrician, I’m used to bloody fingers.

I guess the bottom line is, you buy when you feel it’s time to buy. I posted in another thread a few days ago that taking a small depreciation on real estate may come to be viewed as more or less normal. Waiting until the “perfect” time may prove to be impossible.

[Navydoc]

I look at it this way: the longer I wait the nicer the house I can afford becomes. Whatever happens to the market, I’m going to be looking in the 700-850k range. Last year when I started posting that meant a 2400 sq ft North county house built around 1998 or so. Now that money buys 3000+ sq ft built in 2004+. I will be buying in the Spring. Why? Because I need to, and if my fingers get a little bit bloody I’m willing to accept it if I find a home I’m happy to retire in. Besides, I’m an Obstetrician, I’m used to bloody fingers.

I guess the bottom line is, you buy when you feel it’s time to buy. I posted in another thread a few days ago that taking a small depreciation on real estate may come to be viewed as more or less normal. Waiting until the “perfect” time may prove to be impossible.

[Navydoc]

I look at it this way: the longer I wait the nicer the house I can afford becomes. Whatever happens to the market, I’m going to be looking in the 700-850k range. Last year when I started posting that meant a 2400 sq ft North county house built around 1998 or so. Now that money buys 3000+ sq ft built in 2004+. I will be buying in the Spring. Why? Because I need to, and if my fingers get a little bit bloody I’m willing to accept it if I find a home I’m happy to retire in. Besides, I’m an Obstetrician, I’m used to bloody fingers.

I guess the bottom line is, you buy when you feel it’s time to buy. I posted in another thread a few days ago that taking a small depreciation on real estate may come to be viewed as more or less normal. Waiting until the “perfect” time may prove to be impossible.

[Navydoc]

I look at it this way: the longer I wait the nicer the house I can afford becomes. Whatever happens to the market, I’m going to be looking in the 700-850k range. Last year when I started posting that meant a 2400 sq ft North county house built around 1998 or so. Now that money buys 3000+ sq ft built in 2004+. I will be buying in the Spring. Why? Because I need to, and if my fingers get a little bit bloody I’m willing to accept it if I find a home I’m happy to retire in. Besides, I’m an Obstetrician, I’m used to bloody fingers.

I guess the bottom line is, you buy when you feel it’s time to buy. I posted in another thread a few days ago that taking a small depreciation on real estate may come to be viewed as more or less normal. Waiting until the “perfect” time may prove to be impossible.

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