Forum Replies Created
-
AuthorPosts
-
bearishgurl
Participant[quote=FlyerInHi]Bearish, you should visit the French countryside. It’s interesting and fun.
The US country such as Colorado and Wyoming is beautiful nature wise but boring and soulless. Not some place you want to retire and be by your lonesome self. . . [/quote]
LOL, FlyerinHI, my passport has long been expired! Perhaps someday I will visit Europe but it is not on my radar at this moment.
I disagree with you about CO and WY being “boring and soulless.” Of course, the plains can be hot and boring but many parts of the rockies are extraordinarily beautiful, even spectacular! The folks who reside there, for the most part, are very welcoming and ever-vigilant in preserving their environments. There are TONS of things to do there, including:
-world-class skiing and snowboarding (downhill, off-piste, cross-country)
-whitewater-rafting and tubing
-hot-air ballooning
-hang-glidering and skydiving
-running and hiking (lots of technical hiking, incl rappelling)
-soaking in natural hot springs
-train rides, ex: http://www.durangotrain.com/
-sightseeing: gorges, high suspension bridges, geysers, cog train, Garden of the Gods, old mines, caves, etc
-off-roading (tons of trails open part of the year and maintained – along with UT, it is the best in the country)
-photography (often requires off-roading or hiking)
-indoor Olympic swimming pools, indoor/outdoor tennis and basketball, ice skating
-fall foilage tours (best in the country) and wildflower tours (lots of variety, incl tundra)
-ice-climbing festival
-world-class camping
-concerts and plays
-touring historic mining towns with well-preserved Victorian architecture
You might be shocked to notice that the fittest people in the world live up there or visit frequently! And many of them are NOT young!
Even in populated towns, such as Aspen, Vail and Jackson Hole, its ecosystem including its native plants and animals has been well-preserved. Restaurants take care to use as little disposable material as possible and from what I could tell, campers, hikers and offroaders NEVER left trash.
You are correct that the rockies are “God’s country.” The people who live there and visit there are at the mercy of the mtns on any given day. Thunderstorms typically roll over in the late afternoon and snow could turn into a blizzard in a few short minutes. The wind can turn your face into leather in 45 mins and there is no ozone layer so sunburns are epidemic. About 5-6 months per year, the temperature could easily vary more than 60 degrees on any given day. One has to dress in layers and should carry extra clothing, battery backup, drinking water and supplies in their vehicle at all times. Living up there by yourself year-round in a single-family home would definitely be a challenge for anyone, especially in a home on the many unpaved and gravel county roads (where wildlife freely roam your unfenced property).
IMHO, this is the absolute best item of clothing to wear there in the warmer months:
I love it up there but would not retire there alone as I don’t like apts/condos. I want to retire in a single family home.
However appealing, towns and areas in the rockies which are more than 30 miles from a hospital are not wise to retire in for those who have chronic health conditions as roads can be closed intermittently and then you will be at the mercy of the skills of a volunteer search and rescue team or local physician if one exists and is reachable when you need one.
Several towns in the rockies have hyperbaric chambers available to treat severe altitude sickness (which has happened to me in the past and is no fun). Do NOT go off road in the rockies until you have resided in an altitude of at least 7500 feet for 24 hrs. Do NOT go up the cog train until you have resided in an altitude of at least 5000 feet for 24 hrs. Do not have more than two drinks the night before you are set to go off-roading, especially if your home is at or near sea-level.
Colorado, and to a lesser extent, Utah, Wyoming and New Mexico, are world-class playgrounds and national treasures.
Participant[quote=Jazzman]LOL! Great to get some feedback BG! Nice to see you are still on form and sounds like you had a great trip. We’ve to’d and fro’d over this so many times, but I just wanted to hang some tangible meat on the core issue, which is that (comparative) value can still be had out there. All (most) Piggs know what caused the bubble and what prevented a full correction in prices. Those causes and preventions are not innate to and binding on all RE markets, despite the contagion that spread well beyond bubble prone markets.
I am a little surprised by one or two of your comments. Having spent several years searching for a home in CA, it could hardly give rise to the notion I never intended to buy here. Also, if you have never been to Europe that wouldn’t qualify you to comment on local services, which I can promise you are at least as are good as anywhere in the developed world. These kinds of comparisons are not very meaningful IMO.
The main thing is I feel very content that overall I’ve come out on top. That of course is subjective, but then isn’t that what it boils down to? But the maths is fun too. I get two beautiful homes in two very sort after places, for the price of one in a place that has not convinced me is twice as good. Put that in ya’ pipe and smoke it![/quote]
Jazzman, we know you initially wanted to buy your retirement home in CA very much. I never meant to imply you didn’t want to buy here.
[quote=jazzman][quote=bearishgurl]Jazzman, the coming “retirement” you have planned for yourselves sounds absolutely extraordinary![/quote]If you consider my wife waited 15 years to get her green card to be with her family in her old age, you’ll realize the decision to leave was not taken lightly. We felt that strongly about it. Having seen dozens of homes, the reaction was nearly always YMBJ if you think we’re going to pay that. Are we better off than most? Yes, so we shouldn’t whine, but our “retirement plan” had to offset the heartache and disappointment my wife felt. It’s nothing personal against California. My home town of London is a lost cause, with tens of thousands of potential buyers probably permanently priced out, and if you dig around enough you’ll find the deep seated frustration that still consumes so many. It makes you wish there was something you could do to help. But then I suppose, many parts of the world would scoff at our pleading poverty.[/quote]
http://piggington.com/8_years_later_it_happened_we_bought_a_home#comment-206432
What I was stating is that you didn’t want to do what it takes to obtain a retirement property of your choice in 2010-12 … when you were actively shopping and placing offers in CA. The prices in your selected “coveted” areas weren’t palatable to you at the time … even is a “down-but-slowly-rising” market. Of course, they are higher now. Different strokes.
In your selected (CA) shopping areas, your problem was not insufficient motivation or an inability to buy. It was all about your level of desire to buy. You didn’t have the “fire” to perform as a buyer and there’s nothing wrong with that … or you. Because this “fire” or “passion” didn’t exist (and if it once did, you probably had stiff competition on a few of your offers), you later opted to buy elsewhere, rather than shop in areas of CA outside of your choice premium areas … and that’s okay, too. After you made the decision to retire elsewhere, you decided you wanted TWO retirement homes for the same amount of money you were willing to spend in CA, so didn’t shop in the premium areas in those locales. And it appears that strategy worked out okay for you.
In other words, while shopping CA, you had much higher standards for a retirement home than you did in HI or France.
From an agent/broker’s point of view, insight into a buyer or seller’s actual true motivations and desires is paramount. More often than not, what a buyer WILL actually buy or what a seller WILL actually sell for or the terms they WILL actually accept (when push comes to shove), is a completely different animal than any initial or subsequent representations they make to their broker. This knowledge is what prevents brokers and agents from spinning their wheels into oblivion, accomplishing nothing and subsequently wasting dozens (hundreds?) of hours of their time, money and gas on transactions which will never consummate.
If you feel you “came out on top,” far be it for me to judge. Yes, you DO get two beautiful homes but you have to pay dearly to travel by air between them as you have no other truly viable alternatives. In my mind, this raises another major reoccurring expense two or more times per year for at least two people that needs to be accounted for in your retirement budget. If this additional expense doesn’t bother you, it doesn’t bother me 🙂
ParticipantHi Piggs, saw my name here and finally had a chance to respond. I’ve checked in recently but have been on the road for awhile … all over the great State of Colorado. It was breathtakingly beautiful and I had the time of my life. desmond, you would have been thrilled to tour the several (rocky mtn high) 13K peaks that I did … yes, up close and personal, replete with old mines to explore, hidden turquoise lakes and brushes with bighorn, deer, marmot, chipmunks and tons of colorful wildflowers!
OH, and BTW, folks, my tankish geezer of a vehicle got 29.5 mpg on the road with just two pints of STP added to the tank for the whole trip! It (I? :=0) even got a speeding ticket (98 in an 80 mph zone) in a lovely desolate straightaway on the way home. After demonstrating equipment failure (odometer needle light out so is black on black in the bright sun) to the state trooper, I got my ticket reduced from $247 to $90. But not before a (deserved) lecture, “Lady, it took me three miles to catch up with you. If you’re passing everything in sight like its standing still, you’re going too fast. It’s 102 degrees right now. We have a lot of blowouts around here and your tires aren’t rated for speed. I don’t want to have to scrape you and your overturned vehicle off the median.”
Well folks, I guess I’ll be getting these needle lights fixed because I’m planning on hitting the road again in a few weeks :=0
***
Jazzman, I saw your photos in your OP and am happy for you on your purchase of a country home in France. Your pictures are very pretty but I noticed that your (stone?) house looks as if (behind trees) its garage is only big enough to hold a motorcycle. Although probably a very old property, I was wondering, is there another garage on the premises?
Jazzman, I never tried to “pillory” you for buying a retirement place in HI versus coastal CA. And having never been to Europe myself, I’m not in a position to determine whether what you are purchasing is a “good deal” (or not) since your lack being able to find what you believe to be a “good deal” in CA is why you decided to shop elsewhere. However, I don’t feel you can compare your purchase to a (comparable $488,110 US dollars) property purchase in CA coastal counties which have street lights and sidewalks (in municipalities); a 911 emergency system in place; trash pickup; high-speed internet avail; built-in cabinets; closets and fixtures; storm drains; zoning laws; emissions laws; guardrails on elevated roads; renowned beaches and a proliferation of other public services which may not be available in rural European locales or, if available, may not be to the (generally high) standards of CA cities. And it certainly cannot be compared to the properties’ locations which you toured in your more coveted coastal CA locales (detailed below).
As CAR has previously stated here a few times, a CA urban or suburban homebuyer will pay for a multitude of available high-quality (public and private) SERVICES when they purchase residential RE. You don’t have to leave the country to prove this point. All you have to do is visit states which don’t have these public services or level of services available (but often charge higher property taxes) and ask yourself why residential RE is cheaper there. It’s cheaper because you pay for exactly what you get in this life.
Just to keep this thread apples to apples, $488,110 is NOT an “entry-level” home in most cities of coastal CA counties. It is a “move-up” home or at the very least, a recently heavily-remodeled “entry-level” home. One can certainly purchase a 4 bd/2-3 ba/2-3 gar SFR of 2000+ sf sitting on .5 to 1.5 AC today in most coastal CA counties for +/- $488,110 … and likely closer to the coast than your country home in France is.
Nevertheless, your pics of the surrounding area are beautiful and I’m happy for your purchase if you’re happy with it 🙂
http://piggington.com/future_housing_purchase_trading_up_when_rates_are_higher#comment-216205
[quote=Jazzman][quote=bearishgurl]I have a question for you Jazzman … Was LJ proper where you were looking for a SFR to buy before you got frustrated with the local market there and left SD? And if so, and you had been successful making an acceptable deal there, would it have been the first property you owned in a CA coastal county?[/quote]. . . To your question, we looked at La Jolla, Del Sur, Encinitas, Laguna Beach, Pasadena, Marin County, but decided the best of all places was Santa Barbara. We could afford a home in most of these places, but that wasn’t the issue here. . .[/quote]
http://piggington.com/future_housing_purchase_trading_up_when_rates_are_higher#comment-216314
[quote=Jazzman]I really did my homework, and therein probably lies the problem. The more I became aware of the issues, the more skeptical I became.[/quote]
http://piggington.com/future_housing_purchase_trading_up_when_rates_are_higher#comment-216410
[quote=bearishgurl][quote=Jazzman]We looked, and looked in Santa Barbara for two years. The situation actually got worse. In 2010, there may have been one or two opportunities, since local housing was depressed, but there were very visible efforts to stop price declines at all costs. It was a sacrosanct, protected haven. Ojai was an option and we saw many homes there, but it was ludicrous what sellers wanted in such a remote little place.
We did want to live in CA, but the poor choice of homes and asking prices was such a deterrent. If you are a cash buyer, it’s your money and you are much more reluctant to part with it than when using someone else’s. I once said to a broker who scorned us for our tactics; “Have to ever paid $x cash for anything?” You could see the penny drop…[/quote]
Jazzman, from your post above, it almost sounds as if you may have “overthought” several purchases and thus talked yourself out of competing for them. And most of the areas you were shopping in no doubt had a preponderance of all-cash buyers like yourself…[/quote]http://piggington.com/future_housing_purchase_trading_up_when_rates_are_higher#comment-216468
[quote=Jazzman]First, apologies to OP for the hijack, and just to reiterate your instincts are right on target.
BG, please don’t take it personally, I do like CA and love the people. I just think homes are over-priced, as do many who live there. My home town London is a LOT worse.
Yes, you are right. We talked ourselves out of it, because we knew it was a losing battle some time ago. And you are right in that it is horses for courses. Maui is small, remote, and island fever sets in, which is why we will buy our main home near Paris. We’re in Honolulu (30 mins away) at the moment celebrating my birthday.[/quote]
We’ve been through all of this before, Jazzman. In a nutshell, your previous posts indicate that you were only willing to shop in largely premium coastal enclaves of CA, but not in France. It appears that in all the months you spent trying to find a suitable retirement home for yourselves, what you really wanted was not a CA coastal home at all, but a beach condo in HI and a secluded European country home. There’s absolutely nothing wrong with that, but as you are aware, the three locales are all completely different animals.
I stand by my previous assertion that the CA coastal enclaves which you were shopping in are not overvalued. Not even now. The vast majority of currently listed properties situated in them are listed under build-cost for their current size when taking into account the prior purchase of the lot they sit on and the fact that those lots can’t be recreated today. That’s the main point I was trying to covey in our previous discussions. It wasn’t to “pillory” you.
Participant[quote=SK in CV]… Conventional loans today are generally 20% down and don’t require PMI, though some lenders are free to make up their own rules…[/quote]
Yes, regardless of amount borrowed, portfolio lenders are actually conventional lenders who make up their own rules and keep these loans “in-house” but very rarely originate mortgages higher than 80% LTV. Some (ex: JC Morgan Chase) originate Freddie Mac-backed (FHLMC) loans for their portfolio but most mortgages in their portfolio are not GSE-backed loans. JCM Chase keeps FHLMC loans in their own portfolio and typically sells off their FNMA-backed loans.
Some CA conventional lenders have several mtg products which are NOT backed by GSE’s. These mortgages are typically ARMs tailored to the individual borrower’s needs. The bulk of these borrowers are high net-worth individuals with excellent credit. These mortgages are NOT “sub-prime” products.
ParticipantI think SK makes some good points here.
A 4th scenario he didn’t include are >59.5 yo “boomers” seeking yield on their spare cash lying around. Some are still working and others are semi-retired or fully retired and they often have access to one or more pensions. This cohort is attracted to “bread-and-butter” properties in neighborhoods they are already intimately familiar with which they can fix up to rent out and manage themselves. This buying cohort (male AND female) aren’t afraid of the hard work involved in readying a property to rent out, vetting an assortment of prospective tenants with wildly differing qualifications, possibly readying their propertie(s) to qualify for the Section 8 program and dealing with tenants on a weekly/monthly basis. Many in this group would prefer a tangible investment (housing) that everyone needs and that they have full control over as opposed to losing sleep over having too much exposure to the stock market lottery with zero time to recover from substantial losses. Even if this group of LL’s have 3-4 months vacancy per year (only likely if mismanaged or eviction becomes necessary, IMHO), they are still netting far more annual rental income than they could make from the same amount of money invested in safe CD’s and MM’s, for example. And they’re not paying PM companies for mgmt duties or paying for most repairs because they perform as much of these services as they can, themselves.
A “down market” or “crash” resulting from excess inventory can’t happen unless owners are forced to sell en masse. This only happens when would-be sellers are “distressed” and an all-cash buyer will never be in a position of distress unless they later take “cash out” in some way and cannot pay it back. In all four scenarios described here (SK’s 3 and my 4th), there is no emergency to sell, regardless of the direction mortgage interest rates take. These groups of recent investment RE owners have a commodity that everyone needs … housing … and from that commodity can derive income … even SOME income is better than that which current safe, passive investments offer. This income can be used to live off of, to reinvest or be used to pay dividends and earn a profit.
If “Black Rock” hasn’t yet gotten their PM process fine-tuned enough (totally expected) to not suffer from eviction costs or to successfully target and obtain appropriate tenants for their (wildly scattered) housing inventory and their investors aren’t happy with currently making just 3-6% on their investment (instead of ~7%), then so be it. They can’t make that in passive investments that they won’t lose sleep over.
Participantkev, I’ve only been able to look at the first few minutes of the first family in your video and it seems that they were/are chronically living on the edge and stressed out about it due to lack of education. Even though the parents seem to be millenials or MAYBE part of the tail end of Gen X, they were (IIRC) only HS graduates who married young.
I don’t know the part of the country in which the first family lived or the parts of the country in which both families were chronicled by Frontline. It hasn’t been the “norm” in large metropolitan areas and US coastal cities for at least 30 years for people to marry right out of HS and start having kids (at the very least, marry). But this practice is still common in rural and semi-rural flyover America (where it is typically cheaper to live).
At first blush, the problems the first family had, given that they appeared NOT in any way to be living a lavish lifestlyle, were caused from marrying and having kids before becoming established in a career (or at least with substantial savings behind them).
The order in which this couple lived their lives could have been followed successfully as late as the mid-eighties (yes, even in SD), but no more. Those days are long gone.
Participant[quote=livinincali] . . . The big problem between 1970 and today is our standard of living and the costs that go a long with that have gone up quite a bit. You didn’t have a cable bill, an internet bill, a cell phone bill, you cooked at home, and had one family car in 1970. Now we expect a lot more and wages haven’t keep up with those expectations. Maybe we need to reduce our expectations and live more within our means.[/quote]
Very astute of you, livinincali, except for the one-car family. I was there and it was common in that era for families to own two vehicles and even more if they had the land to park them on. I’ve been posting this same mantra here for years. Today’s “lifestyle” expectations for those born between about 1970 and 1990 (even straight out of the gate) are thru the roof!
Even the vast majority of “millenials” today who are still teenagers have no idea even how much an i-phone costs to operate every month, let alone a car-insurance premium. I’ve been listening to snippets of their conversations lately and you would be surprised how many in this group believe they can completely live on their own today with a full-time minimum-wage (or slightly above) job. Even if they’ve been told the cost of things by their parents, there is a HUGE disconnect with this group between a known cost figure of a monthly bill (ex: their i-phone, either on a parent’s plan ($50-$60)… or on their own bill ($80-$90)) and how many hours they would have to work every month to pay the bill. Even if they already HAVE a part-time job, many of them couldn’t tell you what their take-home hourly wage is, after taxes.
Compared to boomers, especially the older set, most of Gen Y seems very “high maintenance” to me.
Participant[quote=FlyerInHi]Kev, my experience is that once the offer is accepted, before you even enter escrow (which takes a another few days to one week), the agent will show you the house. After you see the house, if you hate it, you can easily back out.
Don’t get hung up on making offers sight unseen.
Me, I only care about structure and location.
I don’t give a crap about cosmetics such as paint, carpet, granite counters.But if you are confident prices will drop and you’re happy renting, then wait.
BG makes a good point about cash offers and yield.[/quote]
Flyer, this much we can agree on. I think a lot of today’s buyers are too hung up on the “flow” and the “feel” of a house. They can’t envision what the house would look like if they made improvements to it themselves so they shun outdated listings, which otherwise, are usually situated in much better locations than newer construction is. If they need a certain location to be close to employment centers, this type of buyer ends up a perpetual renter because they couldn’t make any buying decisions and as the months/years dragged on, they ended up priced out of their “minimally acceptable” house (which was probably too much of a pipe dream to begin with).
Participant[quote=HLS][quote=kev374]yes, but the properties I am seeing are NOT cash flow positive so I am wondering HOW on earth are investors buying them. I am thinking they are just speculating on future price or rent increases that may not pan out. This is quite a big risk.
For instance, the rents in Orange, California for a 2bd, 950sqft condo with garage is around $1400/month. To be competitive this is what you need to expect…no more.
2bd condos with 1000sqft have asking prices north of $250,000 and some are even asking $300,000. Just do the math… $250,000 with 20% down, $200,000 financed at 4.6%, $1025 PI, $210 property taxes, $100 maintenance, $275 HOA = $1610 and that is in a perfect situation, what if the property remains vacant for a few months of the year? And HOAs and property taxes rise with inflation as well.
For investment it does not pan out at current prices.[/quote]Kev, You are way too logical about this. I TOTALLY agree with you by the way…. BUT, you need to accept reality and that what something is selling for does not mean that it is ‘worth’ it.
Houses, shoes, meals, etc, etc.
BUT if you want to buy one, the price is the price, and if you aren’t going to buy it, perhaps someone else will. It doesn’t make them any smarter, richer, nicer or better looking than you.Without low down payments & low interest rates (backed by govt subsidies) prices would be nowhere near where they are today.
The value of a commercial building is based on its income/cash flow/cap rate. Someone might be foolish to buy a bldg with a 1% or 2% cap rate, and if they have the cash they could if they wanted to, but they might have a hard time getting financing. It’s based on reasonable rental income & expenses.
If the same metrics were applied to residential housing, values(& prices) would be considerably lower in many areas and higher in some others.Most people DO NOT know the value of a house in dollars, (it has a different value to them) but most know the price.
If you want a good ROI, look out of state. Lots of different areas to consider. Get a property manager & some cash flow & depreciation. When you travel to check on your investment you can write off the trip. *consult your tax advisor for details ;-)[/quote]All good advice, HLS, but Kev has been shopping in desirable established areas of the OC … most of them a stone’s throw (no fwy commute needed) from good, white collar jobs and FULL of established residents with paid-for and almost paid-for homes. There are just so many properties for sale at any given time due to Prop 13 and its progeny. The average house in his price range (or a little above) in his target areas is likely ~50 years old.
Your typical male “boomer” buyer, a 1971 graduate of Buena Park HS 🙂 who has a toolbox in his pickup bed and a toolbelt lying on his front seat doesn’t mind buying a house in his “home turf” (fixer preferred) and working on it while he lives in 1-2 rooms for awhile. Either for an investment or to eventually re-establish himself back into his “hometown” for retirement.
Regardless if he ends up renting it out or moving into it himself, he’s not going to be making mtg payments and he’s not going to be hiring too many contractors.
This buyer cohort (and there are more of them than you might think, folks) AND the local and possibly national REITS are kev’s competition for a home in his chosen shopping areas.
HLS, kev is not shopping in a typical “flyover America” market (which were included in your article). He’s shopping in the close-in urban OC, state of CA and there is only ONE in the country. It is what it is.
From his several prior threads here complaining about this same issue, I just felt kev was being too “picky” (or not being proactive) when the prices were lower than they are now but that he can still buy a home … if he really wants to.
Participant[quote=kev374]yes, but the properties I am seeing are NOT cash flow positive so I am wondering HOW on earth are investors buying them. I am thinking they are just speculating on future price or rent increases that may not pan out. This is quite a big risk.
For instance, the rents in Orange, California for a 2bd, 950sqft condo with garage is around $1400/month. To be competitive this is what you need to expect…no more.
2bd condos with 1000sqft have asking prices north of $250,000 and some are even asking $300,000. Just do the math… $250,000 with 20% down, $200,000 financed at 4.6%, $1025 PI, $210 property taxes, $100 maintenance, $275 HOA = $1610 and that is in a perfect situation, what if the property remains vacant for a few months of the year? And HOAs and property taxes rise with inflation as well.
For investment it does not pan out at current prices.[/quote]
Kev, it matters jack to these investors about “cash flow.” I just spoke to a very local banker this morning and they’ve been opening 10-12 CD’s and MM accounts per day (new $$) for all of 2013 in the middle of a (gasp!) “working class” neighborhood, just like the ones you are shopping in. Why?? Because they’re offering a 1% to 1.1% annual interest rate on $50K + deposits.
Dude … ANY reasonably priced property situated in a CA coastal county (read: having a “captive” rental audience) will yield FAR MORE than 1% … and, unlike the stock market lottery, the OWNER has the control of the asset!
There is a LOT of cash chasing yield right now and every day, another few thousand Californians withdraw a matured CD and/or turn 59.5 years old. They’re not necessarily “well-educated,” chasing school scores, or “rich,” but as we all know, money talks and BS walks. And they don’t mind at all investing in that 50+ yo house that you’ve been shunning. You are outnumbered so you shouldn’t waste another minute sitting on your hands trying to overthink your strategy, IMO.
Get out there, kev, and start making offers and keep the Piggs posted on your progress!
Participantkev, if you don’t mind my saying so, I think you should stay out on the street in your favorite haunts in Brea, Buena Park, Yorba Linda and Fullterton (as you have mentioned here before) with a pen and offer form in your hand and/or your agent chained to your ankle with offer-forms in his/her hand. Keep a few counter-offer forms in your back pocket, too. And put your inspector’s and engineer’s number in your cell phone so you can possibly get an appointment with them BEFORE you make an offer or immediately upon acceptance. Then your offer will have less contingencies going forward. If done before, you might lose $250-$400 if you decide not to make an offer, but if you did get an accepted offer on the same property, you wasted both time and money. And your offer will be written WITHOUT an inspection contingency. That’s a HUGE PLUS in traditional sale offers.
You have ostensibly been “shopping” for a home for several months now (a year?) in very established areas all the while prices were ticking up. Don’t let all this interest-rate noise bother you. No one knows if prices will continue to tick up, and, in any case, the effect of higher MIRs all depends on the level of desirability of the micro markets you are shopping in. If you can no longer qualify to buy anything in some or all of your 4 fav markets (above) due to recent MIR hikes, then you need to begin making offers in adjacent areas/cities which you CAN afford OR shop properties with less square feet than you were previously looking at.
Based upon your previous threads and posts here, I just feel that if you were really serious, you could have bought a place by now.
If you continue to keep wishing and hoping prices will come down steeply or come down at all in areas which you are not currently qualified to buy in … or only marginally qualified to buy in where you have to compete with better-qualified buyers, you will find yourself a perpetual renter, IMHO.
My two cents. And I’m no pollyanna, just a realist. About as “real” as you can get … Based upon your prior posts I just see you being able to buy a place if you really wanted one. That’s a question only you can answer.
ParticipantHLS, are you trying to say that “Carmel Valley” and “West of 5” residential property owners are immune from foreclosure? I’m not sure exactly what you mean, but I don’t think boats getting lifted in La Jolla helps homeowners in Lemon Grove one iota.
I saw the article and agree with it but also realize it applies to residential markets where Fannie, Freddie and FHA/VA mortgages are utilized in the majority of closings AND there are enough current (last few years) resale comps which sold under the above terms.
How much is “enough” resales in a given micro-market? I think at least 10% per year of total parcels successfully being transferred at arm’s length.
I don’t believe neighborhoods situated in CA coastal counties which have had historically very little turnover are in danger of becoming distressed and it doesn’t matter their median value. It could be $250K or $1M+.
Remember, we have Prop 13 and its progeny, Props 58 and 193 on the books of this wonderful state. Millions of people living in paid-for and nearly paid-for properties are NOT going to be selling anytime soon. Taking title to a property through an intrafamily transfer deed pursuant to Props 58 and 193 is not a “sale,” per se.
Some well-established areas within CA (and often the best micro-areas within those areas) currently have hundreds, if not thousands of properties taking advantage of Props 58 and 193.
These affected properties aren’t going anywhere, nor are their owners and/or their owners’ heirs. The vast majority of these properties will never be in foreclosure and there are millions of them in CA.
ParticipantYes, I too agree with your posts, HLS. Except I believe that some areas are much more “interest-rate sensitive” than other areas. Those more sensitive areas are the newer tract development built since 2000, where the family-raising cohort habitually flock to en masse. It doesn’t matter the median value in the tract or condo complex. It could be $250K or $1M+. If it was built after 2000, it attracts the same type of buyer that that buyer typically uses as high of a PM loan they can get without having to pay PMI or MMI. And many do bite the bullet and pay the exorbitant mortgage insurance premiums just to get into the newer tract.
Many, many of the very established areas still have a proliferation of all cash buyers and buyers using <50% PM mortgages.
IOW, I believe that interest rates, high or low, don't have much bearing on actual "worth" of properties in a given area unless high LTV mortgages are the norm in successfully consummated sales.
Therefore, the degree of the impact MIR's have on area sales and values is entirely local.
Participant[quote=TemekuT]My heart goes out to both of you – BG and CardiffBaseball. I have the same situation with my beloved baby sis, who has always been vigilant about diet, weight, exercise. She was diagnosed with stage IV cancer 2 years ago at age 47 and is fighting with all she’s got. Thankfully, when she was struggling financially in the prior 2 years, she did not cancel her PPO and now has many care choices and can be selective about her treatments. I believe my sis will benefit from Obamacare and I am fine with helping her and others similarly stricken.
On the other hand, I will now have to contribute to relatives, acquaintances, and strangers’ future medical costs due to their laziness, lack of discipline and bad choices. I have some relatives that take cholesterol meds and blood pressure meds, but indulge almost daily in bacon, egg, and donut breakfasts. I get to watch as the metabolic syndrome they obviously have transforms into diabetes. They regularly circle around parking lots to get the spot closest to the restaurant door, where they consume pizza or fried chicken, followed by sugary and fatty desserts. They have packed on the pounds around their middles, and it’s not attractive being 50 lbs overweight.
Now my sis, that’s just genetic bad luck, but I do resent paying for others’ preventable conditions.
BG – I also have an individual AETNA PPO and received the letter, and am confused about what to do. I take great care of myself, with a very healthy diet and lots of exercise. I am slim, and have no conditions at 55+. It’s not always fun to haul myself out of bed early like I did this morning, walk a few miles, and then breakfast on oatmeal, but I do it because I want to be a healthy oldster.[/quote]
TemekuT, it appears we’re both in the same boat. I have spoken to a third broker in SD last week and he told me that, even though Covered CA’s website and charts do not indicate that tax credits are available for anything but the “Silver Plan” (2nd from the bottom plan), he was certain they would be available to help pay for the Gold or Platinum Plan. I have a few unanswered questions about ALL of the plans on the exchange, mainly regarding access and choice. I understand the differences in the co-pays and all of the plans offered by Covered CA have low deductibles. But I’m wondering if access and provider choice are the same on all of them. If it is, then the Silver Plan would be the way to go because it is, by far, the cheapest. But if access and choice are better or much better on the Gold or Platinum plan, then those plans merit looking into.
I’m waiting to see which of the exchange’s plans will be administered by CA carrier Anthem Blue Cross. That will undoubtedly be the plan with the most choice.
I don’t care as much about the cost of copays but want preventative care (incl periodic “expensive” tests) covered at least 75%.
The “Bronze Plan” appears to be geared towards 20-somethings (who generally have little need for any services outside of basic preventative care).
I’m also in the 55-60 age group and, at first blush, it appears the top three plans on the exchange will have monthly premiums between $557 and $866 month (abt 50%-250% higher than my current mo premiums). Even though I currently have a higher deductible ($5K) and coinsurance requirement ($3K), I have the ultimate in nationwide access, the ultimate in provider choice and 100% of my preventative care is covered (incl “expensive” tests and scans). In addition, my copays for office visits are less than those on the “Silver Plan.” (My particular plan configuration is “grandfathered” and thus hasn’t been offered to new enrollees since before the PPACA became law in March of 2010.)
I’m so sorry to hear about your sister, TemekuT. My sister never drank or smoked but was a road/sky warrior 8-12 business days per month for many, many years so had to learn to regularly sleep on planes, live in hotels and dine in restaurants alone or with colleagues for nearly every meal. When she returned home, she spent her precious time watching her kids sporting events and readying her suitcase for the next trip instead of going to the gym. She even traveled extensively while expecting and a few weeks after the births of her children. Luckily, she had competent caregivers and a supportive spouse, who took care of her until the end. In hindsight, I feel her lifestyle took a toll on her health in that it possibly contributed to a late diagnoses. She wasn’t obese but became a little overweight in her forties. I believe her cancer was inherited but will not know for certain for at least another year when I will be able to return to the east coast and pay for genetic testing. I’m worried about my kids as well and, even if it skips me, I’m worried about my nieces and nephews.
If a “single-payor system” is the direction this country ends up taking, I don’t have a problem either with subsidizing the health premiums of unlucky people like our sisters. But I’m with you in that I don’t want to subsidize the premiums of people who are eating, smoking, drinking and drugging themselves into early graves.
Due to the sheer volume of currently uninsured people in CA who will qualify for tax credits to obtain health coverage on one of Covered CA’s plans, I just feel their need will be great. Throughout 2014 and 2015, (if this group continues to consistently pay the monthly balance of their premiums after their tax credits), they will become established with primary care providers and specialists. In doing so, they will be taking up a LOT of appointment time (meaning a 45 min appt instead of 5-15 mins) because many of them haven’t seen a health provider in decades and will undoubtedly encounter many surprises. I just feel these provider groups will be swamped and not know how far apart to space appointments and possibly have to stay open evenings and Saturdays to accommodate all the new insureds, along with their regular longtime patients. Going to the doctor will be like going to traffic court. These problems will severely lessen the quality and quantity of care for everyone, IMHO, if the provider list for all of the exchange’s plans are the same.
If the above happens, not only do I see a lot of (very established) providers retiring or relocating, I see a lot of boomers leaving large CA urban areas and flocking to the “nicer” rural areas (ex: Lake Tahoe, Mammoth Lakes, Mendocino, Solvang … even the Rockies) where there aren’t so many people (the previously uninsured and newly-minted US citizens) vying for appointments with the same provider groups. I’ll be right behind them.
-
AuthorPosts
