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Nor-LA-SD-guy.
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March 15, 2009 at 7:52 AM #366925March 15, 2009 at 8:34 AM #366330
Nor-LA-SD-guy
Participant[quote=Ren]Any way you look at it, $90-100/sq ft in Temecula is a good deal for a residence. $80/sq ft is a steal and great for a rental.
There are a ton of investment properties in T/M that have enough positive cash flow to weather even a big drop in rents.
The time to buy is when the numbers make sense, not when your co-workers have decided their mortgage is too high.[/quote]
How about $40-50/sqf, I have been seeing these in some of the older homes in TV (needing much TCL of course).
Sorry I can not feel for anyone in SD who is still crying about high RE prices anymore when deals like these are about an hour’s (most even less time) commute to the Job centers in most of SD (a little longer to OC of course).
March 15, 2009 at 8:34 AM #366619Participant[quote=Ren]Any way you look at it, $90-100/sq ft in Temecula is a good deal for a residence. $80/sq ft is a steal and great for a rental.
There are a ton of investment properties in T/M that have enough positive cash flow to weather even a big drop in rents.
The time to buy is when the numbers make sense, not when your co-workers have decided their mortgage is too high.[/quote]
How about $40-50/sqf, I have been seeing these in some of the older homes in TV (needing much TCL of course).
Sorry I can not feel for anyone in SD who is still crying about high RE prices anymore when deals like these are about an hour’s (most even less time) commute to the Job centers in most of SD (a little longer to OC of course).
March 15, 2009 at 8:34 AM #366781Participant[quote=Ren]Any way you look at it, $90-100/sq ft in Temecula is a good deal for a residence. $80/sq ft is a steal and great for a rental.
There are a ton of investment properties in T/M that have enough positive cash flow to weather even a big drop in rents.
The time to buy is when the numbers make sense, not when your co-workers have decided their mortgage is too high.[/quote]
How about $40-50/sqf, I have been seeing these in some of the older homes in TV (needing much TCL of course).
Sorry I can not feel for anyone in SD who is still crying about high RE prices anymore when deals like these are about an hour’s (most even less time) commute to the Job centers in most of SD (a little longer to OC of course).
March 15, 2009 at 8:34 AM #366818Participant[quote=Ren]Any way you look at it, $90-100/sq ft in Temecula is a good deal for a residence. $80/sq ft is a steal and great for a rental.
There are a ton of investment properties in T/M that have enough positive cash flow to weather even a big drop in rents.
The time to buy is when the numbers make sense, not when your co-workers have decided their mortgage is too high.[/quote]
How about $40-50/sqf, I have been seeing these in some of the older homes in TV (needing much TCL of course).
Sorry I can not feel for anyone in SD who is still crying about high RE prices anymore when deals like these are about an hour’s (most even less time) commute to the Job centers in most of SD (a little longer to OC of course).
March 15, 2009 at 8:34 AM #366930Participant[quote=Ren]Any way you look at it, $90-100/sq ft in Temecula is a good deal for a residence. $80/sq ft is a steal and great for a rental.
There are a ton of investment properties in T/M that have enough positive cash flow to weather even a big drop in rents.
The time to buy is when the numbers make sense, not when your co-workers have decided their mortgage is too high.[/quote]
How about $40-50/sqf, I have been seeing these in some of the older homes in TV (needing much TCL of course).
Sorry I can not feel for anyone in SD who is still crying about high RE prices anymore when deals like these are about an hour’s (most even less time) commute to the Job centers in most of SD (a little longer to OC of course).
March 15, 2009 at 8:43 AM #366320Navydoc
ParticipantAs usial TG hit the nail on the head. I’m itching to buy myself as well, and am currently obsessing over the listings in the Northern DC suburbs, much like TG was about 6 months ago. I am absolutely planning to buy next month. Why? Because the houses I’m looking at are all 3500-6000 sf homes on 1-2 acres that are selling from 550-800K. Rents for houses like this range from $2500-$4000/month. With 20% down I’m pretty much at rental parity and don’t have to worry about a slumlord pocketing my rent money and not paying the mortgage.
Bottom line, I need a place to live. Buying in this market CAN make sense. Will I lose some of my down money? Probably, but I still need to live somewhere, and housing IS an expense, whether you rent or buy. I’m hoping we finally get away from housing as purely an investment and not the necessity it truly is.
By the way, this idea is dying awfully hard. I’m working with an agent back there, and in the first discussion I had with him he asked how long I was planning to stay in the area. I responded a minimum of three years, possibly much longer. He said “oh good, by then you ought to be able to make some money!” Sigh. Lots of Kool Aid in Maryland too.
March 15, 2009 at 8:43 AM #366609ParticipantAs usial TG hit the nail on the head. I’m itching to buy myself as well, and am currently obsessing over the listings in the Northern DC suburbs, much like TG was about 6 months ago. I am absolutely planning to buy next month. Why? Because the houses I’m looking at are all 3500-6000 sf homes on 1-2 acres that are selling from 550-800K. Rents for houses like this range from $2500-$4000/month. With 20% down I’m pretty much at rental parity and don’t have to worry about a slumlord pocketing my rent money and not paying the mortgage.
Bottom line, I need a place to live. Buying in this market CAN make sense. Will I lose some of my down money? Probably, but I still need to live somewhere, and housing IS an expense, whether you rent or buy. I’m hoping we finally get away from housing as purely an investment and not the necessity it truly is.
By the way, this idea is dying awfully hard. I’m working with an agent back there, and in the first discussion I had with him he asked how long I was planning to stay in the area. I responded a minimum of three years, possibly much longer. He said “oh good, by then you ought to be able to make some money!” Sigh. Lots of Kool Aid in Maryland too.
March 15, 2009 at 8:43 AM #366771ParticipantAs usial TG hit the nail on the head. I’m itching to buy myself as well, and am currently obsessing over the listings in the Northern DC suburbs, much like TG was about 6 months ago. I am absolutely planning to buy next month. Why? Because the houses I’m looking at are all 3500-6000 sf homes on 1-2 acres that are selling from 550-800K. Rents for houses like this range from $2500-$4000/month. With 20% down I’m pretty much at rental parity and don’t have to worry about a slumlord pocketing my rent money and not paying the mortgage.
Bottom line, I need a place to live. Buying in this market CAN make sense. Will I lose some of my down money? Probably, but I still need to live somewhere, and housing IS an expense, whether you rent or buy. I’m hoping we finally get away from housing as purely an investment and not the necessity it truly is.
By the way, this idea is dying awfully hard. I’m working with an agent back there, and in the first discussion I had with him he asked how long I was planning to stay in the area. I responded a minimum of three years, possibly much longer. He said “oh good, by then you ought to be able to make some money!” Sigh. Lots of Kool Aid in Maryland too.
March 15, 2009 at 8:43 AM #366808ParticipantAs usial TG hit the nail on the head. I’m itching to buy myself as well, and am currently obsessing over the listings in the Northern DC suburbs, much like TG was about 6 months ago. I am absolutely planning to buy next month. Why? Because the houses I’m looking at are all 3500-6000 sf homes on 1-2 acres that are selling from 550-800K. Rents for houses like this range from $2500-$4000/month. With 20% down I’m pretty much at rental parity and don’t have to worry about a slumlord pocketing my rent money and not paying the mortgage.
Bottom line, I need a place to live. Buying in this market CAN make sense. Will I lose some of my down money? Probably, but I still need to live somewhere, and housing IS an expense, whether you rent or buy. I’m hoping we finally get away from housing as purely an investment and not the necessity it truly is.
By the way, this idea is dying awfully hard. I’m working with an agent back there, and in the first discussion I had with him he asked how long I was planning to stay in the area. I responded a minimum of three years, possibly much longer. He said “oh good, by then you ought to be able to make some money!” Sigh. Lots of Kool Aid in Maryland too.
March 15, 2009 at 8:43 AM #366920ParticipantAs usial TG hit the nail on the head. I’m itching to buy myself as well, and am currently obsessing over the listings in the Northern DC suburbs, much like TG was about 6 months ago. I am absolutely planning to buy next month. Why? Because the houses I’m looking at are all 3500-6000 sf homes on 1-2 acres that are selling from 550-800K. Rents for houses like this range from $2500-$4000/month. With 20% down I’m pretty much at rental parity and don’t have to worry about a slumlord pocketing my rent money and not paying the mortgage.
Bottom line, I need a place to live. Buying in this market CAN make sense. Will I lose some of my down money? Probably, but I still need to live somewhere, and housing IS an expense, whether you rent or buy. I’m hoping we finally get away from housing as purely an investment and not the necessity it truly is.
By the way, this idea is dying awfully hard. I’m working with an agent back there, and in the first discussion I had with him he asked how long I was planning to stay in the area. I responded a minimum of three years, possibly much longer. He said “oh good, by then you ought to be able to make some money!” Sigh. Lots of Kool Aid in Maryland too.
March 15, 2009 at 8:48 AM #366335carlsbadworker
ParticipantThis is exactly how the economics are working. The FB were paying $2500 a month on the mortgage so they are not paying anymore. The new buyers are paying about $1500 for PITI for a median house so it makes sense to them to buy v.s. rent.
People will then ask, what if the rent also drops? Yes, it will and it has. But I have always argued that there is a floor to the rents. Historically, people in US pays an average of 25% of their income (of gross family income) in rents. In California, it was 28%. (http://www.census.gov/prod/2003pubs/c2kbr-21.pdf) Now, let’s just say the recession knock the CA ratio to 22.4% as layoff impacts ratio is 80%.
For a town like Temecula, US Census Bureau estimates that median household income is $75,335 and median family income is $80836:And you will get $1400-$1500 in monthly rent payment estimate. That is exactly the range that the rent-occupied units (apartments) charge for family shelter needs (3B apartment). I always argue and still believe that this is the floor for the house rental price. Because, when the price drops to that range, we will drive the apartment owners out of business in their 3B units first since a house (including townhouse) is generally bigger and better, who wouldn’t want to spend the same money on a better shelter (again that’s how economics work)?
So why “the idiots” are buying? Because they believe the recessions will end one day or another, and if in a rent-depressed recession period, they pay the same for a much bigger house comparing to the rents. Imagine what will happen when the economy comes out of the recession while the lender is not going to raise your shelter costs as you have 30-year fixed payments.
(Note I ignored in my calculation on DP and tax benefit for buying, for simplicity reason, I consider them a wash in my calculation)
March 15, 2009 at 8:48 AM #366624ParticipantThis is exactly how the economics are working. The FB were paying $2500 a month on the mortgage so they are not paying anymore. The new buyers are paying about $1500 for PITI for a median house so it makes sense to them to buy v.s. rent.
People will then ask, what if the rent also drops? Yes, it will and it has. But I have always argued that there is a floor to the rents. Historically, people in US pays an average of 25% of their income (of gross family income) in rents. In California, it was 28%. (http://www.census.gov/prod/2003pubs/c2kbr-21.pdf) Now, let’s just say the recession knock the CA ratio to 22.4% as layoff impacts ratio is 80%.
For a town like Temecula, US Census Bureau estimates that median household income is $75,335 and median family income is $80836:And you will get $1400-$1500 in monthly rent payment estimate. That is exactly the range that the rent-occupied units (apartments) charge for family shelter needs (3B apartment). I always argue and still believe that this is the floor for the house rental price. Because, when the price drops to that range, we will drive the apartment owners out of business in their 3B units first since a house (including townhouse) is generally bigger and better, who wouldn’t want to spend the same money on a better shelter (again that’s how economics work)?
So why “the idiots” are buying? Because they believe the recessions will end one day or another, and if in a rent-depressed recession period, they pay the same for a much bigger house comparing to the rents. Imagine what will happen when the economy comes out of the recession while the lender is not going to raise your shelter costs as you have 30-year fixed payments.
(Note I ignored in my calculation on DP and tax benefit for buying, for simplicity reason, I consider them a wash in my calculation)
March 15, 2009 at 8:48 AM #366786ParticipantThis is exactly how the economics are working. The FB were paying $2500 a month on the mortgage so they are not paying anymore. The new buyers are paying about $1500 for PITI for a median house so it makes sense to them to buy v.s. rent.
People will then ask, what if the rent also drops? Yes, it will and it has. But I have always argued that there is a floor to the rents. Historically, people in US pays an average of 25% of their income (of gross family income) in rents. In California, it was 28%. (http://www.census.gov/prod/2003pubs/c2kbr-21.pdf) Now, let’s just say the recession knock the CA ratio to 22.4% as layoff impacts ratio is 80%.
For a town like Temecula, US Census Bureau estimates that median household income is $75,335 and median family income is $80836:And you will get $1400-$1500 in monthly rent payment estimate. That is exactly the range that the rent-occupied units (apartments) charge for family shelter needs (3B apartment). I always argue and still believe that this is the floor for the house rental price. Because, when the price drops to that range, we will drive the apartment owners out of business in their 3B units first since a house (including townhouse) is generally bigger and better, who wouldn’t want to spend the same money on a better shelter (again that’s how economics work)?
So why “the idiots” are buying? Because they believe the recessions will end one day or another, and if in a rent-depressed recession period, they pay the same for a much bigger house comparing to the rents. Imagine what will happen when the economy comes out of the recession while the lender is not going to raise your shelter costs as you have 30-year fixed payments.
(Note I ignored in my calculation on DP and tax benefit for buying, for simplicity reason, I consider them a wash in my calculation)
March 15, 2009 at 8:48 AM #366823ParticipantThis is exactly how the economics are working. The FB were paying $2500 a month on the mortgage so they are not paying anymore. The new buyers are paying about $1500 for PITI for a median house so it makes sense to them to buy v.s. rent.
People will then ask, what if the rent also drops? Yes, it will and it has. But I have always argued that there is a floor to the rents. Historically, people in US pays an average of 25% of their income (of gross family income) in rents. In California, it was 28%. (http://www.census.gov/prod/2003pubs/c2kbr-21.pdf) Now, let’s just say the recession knock the CA ratio to 22.4% as layoff impacts ratio is 80%.
For a town like Temecula, US Census Bureau estimates that median household income is $75,335 and median family income is $80836:And you will get $1400-$1500 in monthly rent payment estimate. That is exactly the range that the rent-occupied units (apartments) charge for family shelter needs (3B apartment). I always argue and still believe that this is the floor for the house rental price. Because, when the price drops to that range, we will drive the apartment owners out of business in their 3B units first since a house (including townhouse) is generally bigger and better, who wouldn’t want to spend the same money on a better shelter (again that’s how economics work)?
So why “the idiots” are buying? Because they believe the recessions will end one day or another, and if in a rent-depressed recession period, they pay the same for a much bigger house comparing to the rents. Imagine what will happen when the economy comes out of the recession while the lender is not going to raise your shelter costs as you have 30-year fixed payments.
(Note I ignored in my calculation on DP and tax benefit for buying, for simplicity reason, I consider them a wash in my calculation)
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