[bearishgurl]

[quote=gzz]The strongest rental growth will be where there is limited supply and growing demand.

The supply of single family homes with nice sized back yards for kids/dogs in central San Diego is going down each year as more and more are infilled with apartments or second units.

The fastest demand growth IMO will be from retiring upper-middle class boomers. The features that may be most popular for them may be 3 or fewer bedrooms, space for gardening/dogs/grandchildren, walk-able/bikeable neighborhood, single story house and a lot without deep canyons or drops.

For older couples, single retirees, and those without the budget to have guests stay over, condos with a lot of amenities should also do well. Within Central SD and mature North County areas, this is also the fastest growing supply as new lux complexes get built and old dumpy apartment complexes get converted to lux condos.

I think working couples with kids are probably averse to having less than 2 full baths. But retired people with only the occasional guest will probably be more willing to have 1 or 1.5 baths.

I think the coastal areas with plenty of smaller SFH on their own lots, from OB to Carlsbad, is likely the sweet spot for long-term appreciation of both rents and prices. IB and OC seem a tad too remote and downscale to attract boomers with pensions and equity from bigger paid-off residences.[/quote]This is a pretty good analysis of the available residential SFR inventory going forward in well-established areas of CA coastal counties … with a few caveats.

First of all, 1.5 baths is a design mistake of primarily builders of the ’80’s thru the ’90’s. Primarily used in small units/PUDs (townhouse-type) of 2 floors, the 1-1/2 bath design leaves no tub/shower on one floor, which is a huge inconvenience, especially if a bdrm exists on that floor. Any units being remodeled or converted (or built after about 2000) include at least a shower on the 2nd bath (in a 2-bath unit), making the unit have 1-3/4 bath … a much more usable unit for a small family or roommates. Even a downsizing boomer doesn’t want 1.5 baths! A “powder room” or 1/2 bath is fine for a home which already has two full baths.

Yes, boomers DO prefer one story homes. Many of them (perhaps more than 70% in SD County) already own a one-story SFR as a residence. But if they do happen to have stairs, they’re not going to sell and re-buy a residence in CA unless they can take their old assessment with them pursuant to Props 60/90. There are limited counties participating in this “statutory scheme,” besides SD County:

http://www.boe.ca.gov/proptaxes/faqs/propositions60_90.htm

Boomers are not going to suddenly start paying $350 to $600 month in HOA dues at the age of ~60+ for a condo in a “Luxe” complex if they haven’t paid HOA dues in the past 20+ years … or ever in their lives. H@ll, effing NO! And that’s the vast majority in CA!

Even one collecting pension(s) (which are generally fixed with low or no increases every year) does not want to add to their monthly expenses when that money could be much better deployed to other uses such as home improvement, travel and assisting grandchildren with college.

It’s much, much cheaper to hire a gardener (even if one has a large lot which they can’t maintain by themselves anymore) than it is to be suddenly subject to HOA dues (and possible MR on a *newer* “Luxe” condo complex) PLUS any impromptu special assessments … especially for a deferred maintenance period which commenced long before the new buyer even took ownership of their unit! Witness all those beautifully-landscaped large two story “period homes” on Coronado which are occupied by just 1-2 people. And do not believe for one minute that they will all suddenly go on the market after the last homeowner dies!

Both of the above reasons (PLUS the effect of Props 13, 58 and 193 on CA’s books) represents 85-90% of the reason for the dearth of SFR listings on decent-sized lots in well-established areas of CA coastal counties in recent years. The closer to the the coast, the more pronounced the scarcity is and will be into perpetuity unless two or more of the above laws are eventually repealed. The proliferation of SFR zoning to multi-family/comm’l zoning is only occurring in 10-15% of urban micro-markets in CA coastal counties (ex: in SD, University Heights and parts of North Park). It is NOT occurring in every well-established urban neighborhood in coastal counties, nor will it . . . ever.

North Park (SD) began to be upzoned by City as early as 1988. It had a majority of residents who were renters in swaths of it, hence they had no voice when City voted to upzone those sections. This is NOT the case with the vast majority of aging urban neighborhoods in CA coastal counties!

In sum, a boomer would rather have their old house with stairs (and keep their <$1000 annual tax bill) than sell and move into a condo in the same county or move out of county (unless they can make Prop 90 work out for themselves) or out of state. To a great extent, the existence of stairs is the lesser of all evils. Don't count on SFR inventory in well-established sections of urban coastal counties of CA getting any better for decades ... or ever. With the existing laws on CA's books, there is no reason whatsoever to believe this could or would happen.

[bearishgurl]

[quote=HLS][quote=bearishgurl]HLS, I’d be interested to know what the closing costs will be on the *new* mortgage loan you described in the OP :=0[/quote]

There is a pricing factor to compensate for the risk, so there is a choice with this loan AND VA to choose a rate
that has a rebate that will cover all the closing costs.
It’s simply risk based.

VA funding fee is not the same for every veteran.
The 2% fee does not have to be paid by seller nor paid in cash by the buyer, above market rate can cover it all.

According to the media, it’s hard to qualify for a loan.
This is utter nonsense. In some ways it’s easier than ever, especially for people who can barely afford to buy a house, as long as they qualify for the program.
easiest for W2 Salaried employees.
Harder for self employed, contract workers, and those who need commission, bonus or overtime pay to qualify.
Regardless of credit scores.

$1 million dollars in the bank makes it no easier to qualify for a conventional loan. Verified monthly income & expenses ON A CREDIT REPORT matter. Lots of monthly expenses aren’t on a credit report.

I priced out a scenario and it looks like 4.00% rate covers the pricing hits and gets the 2% down payment from the lender, vs. 3.375%-3.50% with 20% down.

1% down with 4.00% 30yr rate… it’s better than nothing down and a 6.50%+ rate in 2006

I don’t like that it inflates the bubble.[/quote]This is what I was afraid of, HLS. A LOT of people (W-2/Military) look “good enough” on paper to qualify for much more home loan than they should be taking out, given the size of their families and all their other financial obligations. The VA has had a ton of foreclosures in the past (even in the ’80’s and ’90’s) and “nothing down” along with a change of duty station, slight downturn in the market, ONE bad tenant, too many weeks/months between tenants, etc, caused the borrowers to default, ESPecially if they had homeowner assn dues to pay as well. And almost all of these “circumstantial landlords” were “upside down” every month. I can’t tell you how many veterans I’ve known over the years who lost their VA loan eligibility forever because they quickly defaulted on a SD County home which they should have never purchased. When they eventually retired back to Pudunk, USA (where they were from and where houses are relatively cheap), they didn’t have their VA eligibility to use and so lost that option at at time when they were finally stable enough in life to use it and needed it most.

I volunteered for the Navy Relief Society for about 14 mos back in the late ’80’s. I know the pay/benefits are much better now but I can honestly say that the vast majority of (enlisted) Navy families live paycheck to paycheck and are perpetually in debt over small problems such as vehicle repairs (so the sponsor can get to work). Many of these families often run out of food before they get paid again.

Based on your post, I’m going to assume that a $417K mortgage loan on the *new* 1%/3% FF loan program costs at least $12K to close. Please correct me if I’m wrong on this :=0

[bearishgurl]

“Military duty” isn’t the same as a job gotten on the “open market.” A servicemember stands 24-hour duty routinely and never gets paid overtime. They are sometimes called to show up at their duty station on the spur of the moment, in uniform for impromptu exercises. Their seabag (Navy and Marines) must always be fully packed and ready to take with them at any time. US labor laws do not apply to military personnel. If they are sick, they must report to work, anyway (even if they have to be brought in), unless they are in the hospital. They will be taken care of at work if they are really sick. As I stated, when one is an active-duty military member, their azz really does not belong to them.

[bearishgurl]

[quote=FlyerInHi]BG, all the details are irrelevant. People know what they sign up for. There’s an argument for letting the markets decide, especially if you believe the markets should decide. People tend to sign up during times of conflict. If they do, then they see the value, notwithstanding the potential dangers.[/quote]A lot of people sign up before or after graduating from HS for Veteran’s benefits to later attend college. Their families can’t afford to send them to college and there are no living-wage jobs within a 50 mile radius of where many of these kids/new enlistees grew up. They want to “see the world” and eventually go to college, and for many, the military is the only way out of their hometown. I don’t think very many of them sign up with a plan to make a career out of the military. The decision to continually re-enlist evolves as they get trained and experience different duty stations.

[bearishgurl]

[quote=spdrun]^^^

So actually pay/pension soldiers enough to get good medical insurance after they retire, buy a home, etc. Why create a bureaucracy when it might be cheaper to simply pay a wage that reflects the hardships of the profession?[/quote]They don’t pay wages reflecting those hardships BUT a service member stationed in a “dangerous area” does get a stipend for working in a danger zone ONLY WHILE stationed there. They DO get a housing allowance (and COLA, if applicable) if they have a spouse and/or minor children and are not offered a military housing unit OR do not elect to take one. The housing allowance is now about four times the size it used to be BUT it still does not keep up with current rents PLUS utilities in a high-cost area such as SD County. If they elect to apply for military housing, it is offered to them and they accept the quarters, all utilities are paid except landline phone and cable TV/Internet inside the unit.

Their retirement pay is based upon their base pay only, with no allowances, COLAs or extra pay for working in dangerous areas factored into the calculation.

The current housing allowances would be instrumental in helping a servicemember pay PITI BUT if they lived in government quarters, they wouldn’t have ANY housing expenses except for TV/internet/phone (if desired). Most of them stationed in SD County elect this option, especially those families whose sponsor’s pay grade is E6 or below.

If the service member is single or unaccompanied (their spouse and/or children are living in a locale other than their current duty station), they will be offered shipboard quarters or “barracks” (now modern high-rise apts at NavSta SD, with one or more roommates).

[bearishgurl]

[quote=FlyerInHi][quote=HLS]
IMO anyone who has been within 1000 miles of Afghanistan or Iraq deserves to be able to buy a house in America with no money down.[/quote]

err… isn’t that social engineering?

Why not pay a competitive wage without all the ancillary benefits that require huge bureaucracies and let the market decide? Up the wages if not enough people apply. And lower wages when there are too many applicants.[/quote]err… FIH?? I take it you have never been in the military. If you had, you would know that while an active servicemember, your a$$ does not really belong to you :=0

[bearishgurl]

[quote=mixxalot]Ugh here we go again! NINJA loans redux, this won’t end well.[/quote]I honestly don’t understand why the current RE market needs another ultra-low downpayment mortgage loan program. Isn’t it doing just fine all over the US without it?

As HLS said, there is always the FHA (w/MIP) as well as FF 5% down programs (w/PMI). Haven’t today’s buyers figured out by now (after watching the FC crisis of the aughts) that it isn’t a good idea to buy a home with little or no money down?

Why can’t these (mostly college-educated) millenials stop buying $800 iphones and Starbucks every day and stop spending their weekends at craft beer bars (speaking for my own kids here :=0) and start saving some of their large salaries for their first home?

[bearishgurl]

Up until about ’92, some “VA no-no” transactions WERE successfully completed in areas of SD County where the majority of home-shoppers were in the military or retired vets. HOWEVER, a nice 4/2+/2+ SFR with a decent-sized yard only cost from $73K (lower “enlisted” area) all the way up to $160K (senior “officer” area) back then. Thus, the funding fee (paid fully or partially by sellers) was much less than what would be asked of them now :=0

Often, the buyer’s and seller’s agents ended up splitting the buyer’s funding fee with the seller just to close a (frequently 100+ day escrow) “VA no no” deal … especially if the VA appraisal came in lower than the agreed-upon purchase price :=0

[bearishgurl]

[quote=spdrun]Why would a seller want to lose 2% profit just to help a vet? Would you take a 2% haircut just to sell to the right buyer?[/quote]No they wouldn’t … not in Cali. Because they don’t have to. Especially sellers in coastal counties.

[bearishgurl]

HLS, I’d be interested to know what the closing costs will be on the *new* mortgage loan you described in the OP :=0

[bearishgurl]

[quote=HLS] . . . IMO anyone who has been within 1000 miles of Afghanistan or Iraq deserves to be able to buy a house in America with no money down.[/quote]I agree with this but the 2% funding fee at closing is an impediment to a lot of eligible vets. As you know, CA (resale) sellers have historically not agreed to help with the VA funding fee, making these 1000’s of dollars in (unnecessary, IMO) closing costs very prohibitive for homebuying vets in CA (esp an active-duty enlisted vet). Many (most?) of these vets have been trying to raise their families on their salaries only, which isn’t much if they are residing in military housing and thus don’t have a housing allowance. This is due to many (most?) of their spouses following them around from one duty station to the next every 1-5 years and thus never really getting their own “careers” off the ground. The vast majority of military spouses (both active duty and retired) are only marginally working PT, currently unemployed or have never worked at all!

I also believe the VA guarantee is too high and thus the VA mortgage loan ceiling is too high (currently $580,750 for SD Co, CA). This is wa-a-a-ay too high for a veteran (married or not), but ESPecially one with a spouse and minor child(ren) in tow who is subject to frequent change of station orders and deployments. Even an E-8 with a family and a housing allowance should not be borrowing that much money, even if they seem qualified on paper, imho. There are too many unknown variables in their lives and thus they (and their families) are far too vulnerable to be carrying anywhere near that much debt. An active duty veteran very often cannot pick and choose the best time to sell their home and cannot carry the debt from a home they bought with no money down into a new duty station. Even if rented, they or their families cannot financially handle the vacancies, cleanup and repairs between tenants, property mgmt fees and likely negative cash flow every month from being an over-indebted, long-distance landlord.

In short, the VA loan program is impractical for many who are eligible to take advantage of it, in spite of its “zero-down” feature. The existence of the funding fee has always landed the new VA buyers in the “underwater zone” immediately after closing, if financed (as most are).

The program is great for “retired” vets (usually over the age of 40) who are buying in slower-moving, lower-cost regions of the country where resale sellers will help with the buyer’s funding fee to get their (stagnant) listing finally sold.

[bearishgurl]

This part of the article svelte posted is bordering on incredible:

The audit also identified $24,494 in other payments that it said violated district policies, including purchasing card expenses and revolving cash fund payments. A number of those far exceeded the $150 limit for the fund, including one advance of $17,000, which Collins took against a vacation payout.

According to the list of charges, although there were limits on that fund, “Collins used his position as superintendent to circumvent those controls.”

The charges also reveal a text message to his wife, describing financial hardship, and noting that he had found a way to resolve it.

“He did in fact find a way — misappropriating public funds through the revolving cash fund,” the charges state…

(emphasis mine)

http://www.sandiegouniontribune.com/news/2016/jul/11/education-poway-john-collins-fired/

I’m sorry …. WTF? This couple whose kids are likely grown can’t live off ~$455K per year? WTH is going on here? Does someone have a gambling or drug problem??

From a link from the PUSD article:

Last month, the board scheduled the July meeting to end Collins’ leave and the district’s audit of his pay and benefits, and voted to hire Edward Velasquez as interim superintendent, starting Aug. 1.The vote to hire Velasquez was 4-1 last month, with trustee Andy Patapow opposed.

Velasquez has recently served as interim superintendent of the Alpine School District, and was formerly the superintendent and chief of school police for the Montebello Unified School District in Los Angeles County. Since retiring from that post in 2013, he has served as interim superintendent of the San Ysidro School District in 2015 and in his current position in Alpine.

Velasquez cites 38 years of experience as a school administrator and educator, with a specialty in working with “at-risk” youth.

Poway Unified will pay him $75 per hour for no more than 560 hours per fiscal year, with no vacation or sick leave….

(emphasis mine)

http://www.sandiegouniontribune.com/news/2016/jul/10/education-poway-superintendent-john-collins/

A max of $42K year for a supe is a good deal for the PUSD at this time, due to the Board having to sue to collect ~$345K in what appears to be “self-directed overpayments” from its longtime enterprising, self-serving Supe who was just fired, John Collins. Velasquez will obviously be a “reemployed annuitant” and under state law cannot work more than half time and still collect his entire school pension every month. In addition, a “reemployed annuitant” is not allowed to accrue any more service time for pension-calculation purposes.

The Superior Court of SD County regularly uses RA’s for judicial appointments it cannot yet fill and for vacation/disability leave fill-ins, as do other county agencies for (temp or not yet approved) appointments it must fill immediately with experienced retirees ready to work with no training. No particular length of service is guaranteed as RA’s are typically used on an as-needed basis. It’s good to see that the PUSD found a competent, very experienced individual who is willing to help them out of this jam.

I’ve long maintained that school superintendents (esp those of large districts) are corrupt with power and will do anything to maintain their “student numbers” which keep their sphere of influence (size of umbrella) continuing and viable. For many of them, their only concern is the size of their pay pkg and the size of their potential pensions. We had one here at SUHSD who last served as its Supe from approx Jan 2012 thru mid 2014. He has literally “made the rounds” (from CVESD to SUHSD to svelte’s neck of the woods to a short stint at O’side, IIRC) and was actually then rehired by SUHSD, only to be let go two years before his contract expired! The SMUSD actually felt they had to “buy out his contract” for $410K just to get rid of him early! Of course, a couple of months after he was let go at SUHSD, the Board found out that he was actually collecting a school pension during the first *year-plus* of his latest contract!

CHULA VISTA — Sweetwater Superintendent Ed Brand, who collected a pension while he was paid to lead the district for over a year, may lose more than $200,000 in future pension benefits because of rules that might have banned him from collecting the two checks at the same time.

Brand stopped taking the pension checks in October 2012 and the state has been reviewing the situation ever since.

“It’s been an open file those two years,” said Ricardo Duran, spokesman for the California State Teachers Retirement System…

http://www.sandiegouniontribune.com/news/2014/sep/09/sweetwater-pension-superintendent-ed-brand/

With his years of service cobbled together from several school districts (leaving most of his posts involuntarily), he’s making out like a bandit as a retiree, even assuming monthly pension garnishments for improper “overpayments” taken in 2012/13 (if he will not pay it back in a lump sum).

Talking about the blind leading the blind and supreme incompetence, SUHSD takes the cake for that title! Ha, ha, I guess we should be grateful that they didn’t issue a passel of subprime construction bonds which local homeowners will have to pay back ten-fold!

I may have posted this link as well in the past describing the situation at SUHSD, but here it is again:

http://www.mauralarkins.com/EdBrandSweetwaterSuperintendent.html

The corruption at the top sorely needs to be systematically rooted out of CA public school systems. Districts in SD County are the absolute worst in this regard, IMO. It seems the local school boards feel that they must “recycle” the same clowns over and over, no matter which District they last crashed and burned in :=0

Thanks for posting svelte. Very enlightening and I shall keep this subject bookmarked.

[bearishgurl]

As a former “bureaucrat,” you can’t tell me that these clowns who possess a “Doctorate in Education” don’t realize that they are misappropriating public funds to themselves or that “double-dipping” at the rate of 200%+ is prohibited under the rules and state law!

[bearishgurl]

[quote=PCinSD]For fucks sake. The OP never once suggested she needed marital or career advice. How about minding your own business? Many people here could make suggestions for you based on your comments. But we don’t. Friggin’ dingbat.[/quote]As usual, you’re accusing me of doing something I never did. I never gave the OP “marital advice” or “career advice.”

I simply voiced my concerns about her statement that she had no intent to bring in her own income for the time her kids were of school age (the next 18-19 yrs). Again, I don’t feel that’s a good plan for someone her age whose spouse makes $50-$60K to support a family of 3-4 in SD County, CA and has little room for wage growth.

Of course, if you have never been in this situation yourself, you wouldn’t realize the gravity of it. I have, I’m no Pollyanna and I do.

That’s likely the biggest difference between you and me.

I really don’t have any current pressing problems but I’m welcome to any and all suggestions. You have my blessings to go ahead and start a thread, PC!

[bearishgurl]

SK, that’s not legal advice. I would tell my kids the same thing.

I feel so many later messes could be avoided in life if someone just cared enough to speak up if they see a red flag. At least tell them to seek advice before they do anything rash.

[Author]

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