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bearishgurl
Participant[quote=SK in CV][quote=bearishgurl][quote=SK in CV][quote=bearishgurl]Oh, and a “slow down” in the “larger economy” has nothing to do with property values the best areas of San Diego County or ANY CA coastal counties, for that matter, as most of those owners are “retired” and a good portion of those properties have long been “paid off.”
[/quote]
Where are you talking about that “most of those owners are “retired” and a good portion of those properties have long been “paid off.””?[/quote]
SK, I pride myself on my good memory. We’ve had this discussion before about your old stomping ground of Del Cerro and surrounds. I claimed a lot of the properties around there were paid off and you stated that you recently discovered on a visit that most of the properties on your old street have changed hands in recent years (this still doesn’t answer the question of whether these “new” owners have a mortgage … or not).
[/quote]
Ok, so you didn’t really meant that “Oh, and a “slow down” in the “larger economy” has nothing to do with property values the best areas of San Diego County or ANY CA coastal counties, for that matter, as most of those owners are “retired” and a good portion of those properties have long been “paid off.””. [/quote]
Yes I did mean that.
[quote=SK in CV]What you meant is, there are a few blocks that you’ve looked at that the owners are retired and have their homes paid off, and think that should be the same across the county even though you have no idea what the situation is in the rest of the county. Understood.[/quote]
No, NOT understood. I’ve done this study on several parcel maps in 92103 and 92106 as well, but it was in the mid-90’s. I don’t see a lot of concern among these longtime owners about what goes on in the “larger economy.” Are you referring to concern about companies moving in or out of SD, military contracts being won or lost, interest rates on passive investments, etc? I don’t see people overly worried about these things. I’m certainly not. Of course, savers would like to have higher returns but the folks in my sphere seem to know how to make do with the income they have. Just because a few Piggs (okay, a lot) buy into a “gloom and doom” scenario, that doesn’t mean the wider community does. I think I’m pretty representative of Suzy Q. Sixpack homeowner who is not a W-2 worker and manages to get along just fine. There are millions of us out there, btw.
I’ve been in a LOT of older areas in this county, SK. Not only recently but down through the years. I used to do a lot of heavy precinct walking. I KNOW the demographic who lives in these areas. Most of them don’t change that much. Most of these people don’t move. In some of the blocks, maybe 1-3 houses change hands per decade!
Participantscaredy, if you listed your castle and it accidentally sold, you wouldn’t be able to hang out on cactus hill or sweep to your heart’s content anymore 🙁
Participant[quote=SK in CV][quote=bearishgurl]Oh, and a “slow down” in the “larger economy” has nothing to do with property values the best areas of San Diego County or ANY CA coastal counties, for that matter, as most of those owners are “retired” and a good portion of those properties have long been “paid off.”
[/quote]
Where are you talking about that “most of those owners are “retired” and a good portion of those properties have long been “paid off.””?[/quote]
SK, I pride myself on my good memory. We’ve had this discussion before about your old stomping ground of Del Cerro and surrounds. I claimed a lot of the properties around there were paid off and you stated that you recently discovered on a visit that most of the properties on your old street have changed hands in recent years (this still doesn’t answer the question of whether these “new” owners have a mortgage … or not).
Just like the thread I promised the Piggs on proving the Vallejo municipal BK was caused solely by the creation of CFD’s on former Navy land (I’ve already done a lot of research on this), I’ve also promised to start a “random parcel map check” thread in several diverse established communities in the county and then invariably get backed up with work where I can’t finish the research.
THERE REALLY ARE whole blocks all over SD County where the majority of the homes are either paid off or have an outstanding encumbrance of less than $30K! I’ve personally gone thru and hand-notated parcel maps in South County about 10 years ago where I found this to be true. When I can peel myself away from my other priorities, I’d really like to pursue these two threads because I believe they would dispel a lot of misguided beliefs of the public re: the “real” effect of mortgage rates on property values in CA coastal counties and the “real” reason for municipal and county BK’s in CA.
What I was trying to impart in the post above is that 1st and 2nd time buyers shouldn’t expect longtime owners will just “give away” their homes for a song just because they are “old” or somewhat “dated” or “they don’t owe anything so they can `afford’ to.” These buyers can’t expect super lowball offers submitted to these sellers to even be considered if the property is well-located and does not have any structural damage. I used the term “retired” too loosely here. What I meant was financially secure by any means, drawing pension(s), have very low living expenses and/or self-employed, etc. Not necessarily senior citizens but people who do not depend upon W-2 income to live month to month. San Diego County is FULL of these types of homeowners and I myself am surrounded by them. Again, my area is but just a microcosm of the county as a whole.
Participant[quote=joec][quote=bewildering]I like the second graph in the “shambling towards affordability” because it takes in to account rental payments.
We recently bought a house in Clairemont, and that decision was easy. We looked at the cost of a 3/2 rental in our area of Clairemont and found the asking price was around $2400. Obviously less for the worse areas/crappy houses, more for better areas/better houses. And the chances of actually getting a place were low because of the number of applicants, and our dog. Our previous rental in Clairemont, a 2/1 for $1800, had 17 applicants within an hour of going on Craigslist.
You can get a 3/2 house with 10% down for around 500,000. Even if interest rates go to 5% or 6% the financial decision is easy. Just use the New York Times rent/buy calculator. Even if house prices and rents stay flat you are ahead after 3* years
*Depending on your tax bracket.
http://www.nytimes.com/interactive/2014/upshot/buy-rent-calculator.html
As long as there is demand for rentals I do not see a big fall in prices. Rents just keep climbing higher, and San Diego rent is cheaper than LA, OC or SF.[/quote]
I agree completely.
I’ve mentioned this multiple times as well. As long as rent prices don’t drop down, I see very little chance for houses to drop down much neither…Also, a lot of people here don’t care that much what happens to the national markets. Real estate has always been local and places like SF, bay area, LA is going to have pretty sticky prices.
Unlike in the 2005-2008 period, rentals were a lot cheaper in a lot of areas back then compared to what the houses were selling for so it had to revert to the mean and overshot and crashed. If you can rent the exact same place for much cheaper than buying, you’ll do that and so will other people.
Sure, it’s tough to get a loan for some people, but if people re-adjust what they can afford, it’s hard to make a case to not buy if buying is cheaper than renting…as some articles report in some areas assuming 20% down, decent mortgage rate now, etc…
I agree that if you just need a place, sometimes buying your primary residence to live in and not having to worry about it is such a load off your mind…(assuming the numbers work).
I (and many others) use to read as much about housing news/blogs daily and go to open houses, etc…such a pain and you’re free of all that after you buy. So nice.[/quote]
Also a great post, joec! Today’s first and second timers don’t seem to making buying decisions anymore based upon “need” or life stage like previous generations. Many of them seem to have to ponder the issue first and “crunch the numbers” into oblivion … some for YEARS! Overthinking the homebuying process to the ground. While these prospective buyers were engaged in looky-looing in recent years, all the while continuing to whine about rising prices, they were watching the good ones sell overnight right in front of their eyes (to people like “bewildering” who could make an “easy decision”) and mortgage rates rose while they were asleep at the switch.
Entire swaths of communities in San Diego County are full of owners who do not make their living from a W-2 job. Most of these owners could care less about what happens in the “greater economy.” You are correct that RE values and desirability are entirely local. It’s always been that way. ESPecially in coastal communities of CA coastal counties. This will never change. Buyers must accept this and deal with the current inventory as it is and the owners behind that inventory in order to consummate a deal.
“…if people re-adjust what they can afford…” Bingo, joec. Novice buyers need to adjust their expectations of the type of home and they and the location they want to REALITY. If the diehard homebuying holdout crowd continues on with their pollyanna mindset, they will still be dealing with their landlord next year. It’s as simple as that. It’s NOT “tough to qualify” for buyers who attempt to borrow what they can afford to borrow and are qualified to borrow. It is when they feel they must have a better home in a better area than what they can qualify for, that they create their own “stalemate” with the market and won’t end up with anything except possibly their lease renewed.
For the life of me, I don’t understand why SD resident parents of minor children who won’t be transferring with their jobs in the coming years, can qualify for a mortgage and have a down payment elect to sit on the sidelines indefinitely instead of purchasing for their families a single family home with a yard under this fairly balanced market and great prevailing fixed interest rates! This phenomenon is just astounding to me. What are they waiting for?
Participant[quote=bewildering]I like the second graph in the “shambling towards affordability” because it takes in to account rental payments.
We recently bought a house in Clairemont, and that decision was easy. We looked at the cost of a 3/2 rental in our area of Clairemont and found the asking price was around $2400. Obviously less for the worse areas/crappy houses, more for better areas/better houses. And the chances of actually getting a place were low because of the number of applicants, and our dog. Our previous rental in Clairemont, a 2/1 for $1800, had 17 applicants within an hour of going on Craigslist.
You can get a 3/2 house with 10% down for around 500,000. Even if interest rates go to 5% or 6% the financial decision is easy. Just use the New York Times rent/buy calculator. Even if house prices and rents stay flat you are ahead after 3* years
*Depending on your tax bracket.
http://www.nytimes.com/interactive/2014/upshot/buy-rent-calculator.html
As long as there is demand for rentals I do not see a big fall in prices. Rents just keep climbing higher, and San Diego rent is cheaper than LA, OC or SF.[/quote]
Thanks for your post, bewildering. Unlike the majority of renters, you guys seem very astute … and realistic. I’ve always been a homeowner but I, too, have pets and could not imagine myself trying to find a rental house where I would not be hugely gouged for pet deposits, which the LL would keep even if I left the place spotless when I moved out and my pets did no damage. In addition, my house that I am living in now would rent for $700 month more than my monthly PITI. Congratulations on choosing such an excellent location! I think you will be happy for years to come.
Participant[quote=scaredyclassic]i once had a landlord who was a navy commander. everyone called him The Commander, or just Commander. man that guy was cool. guy smoked at least 100 cigs a day.[/quote]
Do you know if he’s still alive??
ParticipantSomeday that’s going to be YOU, scaredy. You will be able sweep up all you want and spent entire days on your “cactus hill.” 🙂
Participant[quote=scaredyclassic][quote=zk][quote=scaredyclassic]
. in fact, ignore everything i said….except for the disclaimer[/quote]
I guess it was pre law, then.[/quote]
prelaw
law
post law
outlaw[/quote]
N-o-o-o, scaredy, not you! Your job is to reign in the outlaws by talking turkey to them, even having “Come to Jes@s” convos with them whenever necessary.
Foot soldier you.
March on….
Participant[quote=spdrun]
Also, certain urban trendy areas and coastal areas in coastal CA counties are “immune” from large (and fast) price declines. SD would have to successfully be attacked with nuclear weapons for that to happen.
Yet we had 2007-2009 and 2011-2012 as periods of decline without any nuclear weapons being involved.[/quote]
I don’t recall any declines in these areas. I recall a VERY few TOTALLY UNINHABITABLE beat-up foreclosure listings which would take at $200 – $300K to become habitable but don’t recall declines of any magnitude in these areas. Example: 92106 and southern 92107 (which were the communities most prone to attack :0).
Participant[quote=werdna]I’m not much of a astrologer, but if you believe the latest fed dot plot, interest rates are flat this year and increasing one percent next year.
http://money.cnn.com/interactive/news/economy/federal-reserve-dot-plot/index.html?iid=EL
[/quote]That’s only relevant in areas where buyers usually borrow a LOT of money, typically outlying tracts where most borrowers use superconforming or “Jumbo” mortgage products for the bulk of their purchase money so they can be indebted for most of the rest of their lives with PITI plus HOA dues (for 1-3 assns) plus MR.
If you’re buying a garden variety, run-on-the-mill, $350K to $550K San Diego County house in an established area and using a std 20% (or more) downpayment, then who gives a rat’s a$$ if fixed interest rates are 5% in 2015? If you’re a prospective buyer, you just need to find ONE house you can afford and successfully purchase it, right?
ParticipantOh, and a “slow down” in the “larger economy” has nothing to do with property values the best areas of San Diego County or ANY CA coastal counties, for that matter, as most of those owners are “retired” and a good portion of those properties have long been “paid off.”
If you are a prospective buyer, your spare time would be better spent on the street, looking at houses that you can afford with a competent agent by your side helping you to make offers than speculating on a blog as to when the sky will fall, imho.
ParticipantHere we go again.
There has to be too much on the market for it to happen in SD County. We are far from that happening here. Also, certain urban trendy areas and coastal areas in coastal CA counties are “immune” from large (and fast) price declines. SD would have to successfully be attacked with nuclear weapons for that to happen.
werdna, if you are a prospective buyer, why don’t you just find something in your price range, make an offer, negotiate a price you can live with and be done with it? Most of the all-cash investors have now lost interest in competing with you.
ParticipantSDowner, be happy you qualified for conventional financing. Borrowers using $0 down VA financing are already upside down upon COE. This is due to the humungous “funding fee” of 2.15% that is wrapped into the VA purchase-money or refinance loan. Due to this (and the slow payoff in the first years of their 102.15% LTV mortgage), they still owe 100% of their mortgage ~3 years later when it is time for a change of duty station. A lot of these borrowers let their VA-funded property go into foreclosure when they change duty stations or retire in a different locale because they can’t get enough proceeds from a sale to pay all their closing costs and retire their mortgage and the spouse is unwilling or unable to stay behind to attempt to ready the property for sale and put it on the market while the sponsor/member reports to his/her new duty station. After these borrowers default and then transfer to a new locale, they just live in military housing (if available) until such time as they have another change of station or they are able to buy again. If they can’t get their VA loan entitlement returned to them (due to foreclosure and the VA paying off the 25% “guarantee” to the lender) then they will have to try to later qualify for financing which requires a downpayment.
Most military families (and even retirees) especially from the enlisted ranks, live check to check all of their lives. If the sponsor dies before his/her spouse and has elected to have a survivor benefit premium taken from his/her pay at the time of retirement, his/her spouse will receive a benefit of 55% of his retirement pay (which could be substantial, esp in combination with SS benefits).
This group really doesn’t care if they have to live check to check the rest of their lives or their credit is (temporarily) shot because the vast majority of them will have some kind of a check coming in (plus SS, when they become eligible) until they die. In addition, if they are retirees, they (and their spouses) are eligible for Tricare and Tricare for Life plus have commissary and exchange privileges for life and a myriad of other recreational, travel and social services available to them at low or no cost through their local base.
Essentially, just think of most of these recent VA buyers as “glorified renters” who will likely never build up any equity before they find themselves having to sell due to a life circumstance. They live in a transient culture where “big brother” has always taken care of their daily needs.
These poor schmucks (your neighbors?) aren’t really “better off” than you. When push comes to shove and you are all applying for SS, I predict your net worth will be 10X theirs. It is also quite possible that some or all of them will have no net worth at all by then and that is okay. They’ll just live off their pensions in a double or even single-wide mobile home in flyover America and the house they once “owned” for a minute and a half in your neighborhood will be but a fleeting memory 😀
Participant[quote=scaredyclassic]forget amsterdam. change in plans.
check out that http://www.peyoteway.org i mentioned above. you just have to fly to tucson, then drive up some dit road 50 miles to the rez. you camp out for a night and fast to get your head clear, per church rules, then drink a bottle of this peyote mash, then spend the night alone wandering around, then another day to ponder it. i think it’s 3 days total.
call them up right now. . . .[/quote]
Uhhh, scaredy?? You forgot to tell him to bring a complete snake bite kit and remedy with him and carry it on his person while he is “wandering around” in the desert while deeply pondering life in a psychedelic haze.
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