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https://www.miramesacondos.com/Canyon-Park-Villas/listing/7340-Calle%20Cristobal-Unit%2094-San%20Diego-CA-92126/370398678

They pay $375 now. The $2500 extra spread over 12 months is an extra $208. So next year they will pay around $600 per month in HOA. That feels high but i don’t know how much other places charge.

They are situated right beside Penasquitos Canyon, which to my mind will one day get hit pretty badly by a fire.

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[quote=JPJones]ARMAGEDDON! (I hope at least someone here gets that reference.)

https://www.cnbc.com/2022/10/13/consumer-price-index-september-2022-.html

20% by year end? Booked! Might even push that to 25% with today’s news on inflation. If we get 2 75pt rate hikes between November and December, we could see 30-35% down by y/e ’23.

This is getting weird.[/quote]

20% in real value or 20% in nominal value? If the actual price drops by 20% then the real drop is something like 28% taking inflation into account (over the year).

Even the 15% drop mentioned above is actually more like 19% considering our inflation rate over the last 6 months.

There is no reason why we have had any increase in the real value of the stock market, or housing since the beginning of COVID. COVID should have cratered the economy. Instead, the government just made up trillions of dollars. Inflation will make that ‘money’ disappear.

I’m paying >$4 for a gallon of milk.

[bewildering]

[quote=JPJones]ARMAGEDDON! (I hope at least someone here gets that reference.)

https://www.cnbc.com/2022/10/13/consumer-price-index-september-2022-.html

20% by year end? Booked! Might even push that to 25% with today’s news on inflation. If we get 2 75pt rate hikes between November and December, we could see 30-35% down by y/e ’23.

This is getting weird.[/quote]

20% in real value or 20% in nominal value? If the actual price drops by 20% then the real drop is something like 28% taking inflation into account.

Even the 15% drop mentioned above is actually more like 20% considering our inflation rate over the last 6 months.

There is no reason why we have had any increase in the real value of the stock market, or housing since the beginning of COVID. COVID should have cratered the economy. Instead, the government just made up trillions of dollars. Inflation will make that ‘money’ disappear.

I’m paying >$4 for a gallon of milk.

[bewildering]

Inflation is being caused by crazy low interest rates and is the worst form of tax on the poor.

I feel 31 trillion in debt will really encourage the government to like a bit of inflation. But again the inequity of the effects of inflation will be jarring.

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[quote=deadzone] But the wildcard is how much stress will occur due to other debt, job losses, huge losses in stock portfolios, etc.[/quote]

Yes. I do wonder about households. Hopefully, most people didn’t overextend to buy properties. My worry is that a serious recession will hurt families that needed two wage earners to afford even the low-interest mortgage.

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[quote=deadzone]I think we are clearly on the road to things being worse than 2008/2009. Regarding mortgage market, it has been completely manipulated via Fed involvement (through printing money to directly purchase MBS) non-stop since 2009. So in reality we never truly recovered from the 2008 crash or else why has the Fed been continuously purchasing MBS?

Now with inflation out of control, the Fed has no choice but to remove some of their support for the mortgage market and US treasury market. So we will soon find out if there is anything underneath after they pull their rug of support, or does the entire house of cards collapse?

I definitely expect within the next 5 years, there will be an entirely new set of movies, documentaries, etc. Like Margin Call, all over again to explain this crash.[/quote]

I assume that existing homeowners will be fine with priced-in loans. What happens to mortgage brokers and other financial employees is more worrying. My own company is a start up that will be attempting to raise money in 2023. I am guessing it will be harder to raise money now. Although so many investors are sitting on piles of depreciating cash I guess that things might be still ok.

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[quote=sdrealtor]Not close to as bad, not the same planet, not the same universe. In 08/09 we were dealing with loans from folks that couldnt payback what they borrowed at 0% interest. The existing loans out there are nearly all very high quality. Any future loans made will be also. There is still massive demand for homes from high quality credit folks. What is out of whack at the moment is affordability. This is simply a pricing issue for loans, MBS and homes that will work itself out over the next few years without a crash[/quote]

Thanks.

Yeah, I am guessing that existing loans are fine as people have priced in with very low-interest rates. although I guess the banks that held on to those loans are now losing money?

What I am curious about is how a bank would fund a mortgage at 6% when inflation is at 9%. I guess that the banks are thinking that inflation will drop eventually and the 6% loan will make money?

I am originally from Europe where people do not get fixed loans for 30 years. Precisely because the banks would lose real money if the inflation gets above the interest rate. My sister is concerned at her monthly mortgage going up by ~$500 when she next renews the mortgage (every few years it gets adjusted with her partilar typ eof laon).

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Ok.

Can anyone tell me if not being able to sell MBS is as bad as 2008-9? I just watched Margin call two weeks ago.

https://www.cherrycreekmortgage.com/lous-credit-news
June 10th, 2022

During the last forty-four years, my days have begun and ended with the mortgage market. Four painful moments stand out. Today makes five. (There have been many more good days, but even the Fairy Godmother has her limits.)
Mortgages are covered poorly in financial press, as stocks and such are much more entertaining. Today’s events still unfolding will take days for good coverage. Freddie’s weekly survey will not discover today until next Thursday. But the MBS market is real-time, not like old, sleepy S&L days.
Mortgages are covered poorly in financial press, as stocks and such are much more entertaining. Today’s events still unfolding will take days for good coverage. Freddie’s weekly survey will not discover today until next Thursday. But the MBS market is real-time, not like old, sleepy S&L days.
The CPI news this morning was so awful that it changed the bond market’s view of Fed trajectory, and the weakest sector broke. In bond jargon, MBS went “no-bid.” No buyers for MBS. Then a few posted prices beyond borrower demand, not wanting to buy except at penalty prices. Overnight the retail consequence has been a leap from roughly 5.50% to 6.00% for low-fee 30-fixed loans.

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[quote=sdrealtor]Doing an addition, adding a pool etc would trigger reassessment. Painting , new flooring, new cabinets, counters, appliances, lighting, plumbing fixtures and the like not[/quote]

Does the reassessment just look at vlue of addition? Or would it include land price?

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[quote=sdrealtor] I am old enough to move my tax basis now but like it where I am so that’s my bigger golden handcuffs[/quote]

What does remodeling a house do to the tax basis? When I move back to San Diego I would probably remodel my SFH. I am guessing that would change the tax basis to current property values?

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I had this decision in 2018 and decided to rent out my house.

I talked to a financial advisor who said

“many people leave San Diego, but end up not liking their new location. When they try to return they cannot afford the same type of house and feel miserable.”

I kept the house. Thinking I have 2 or so years to decide to sell based on capital gains exclusion.

Now I am very glad we did not sell, and I will just keep renting out the house. One day I will return as San Diego is magical.

The one issue is that I have got used to my house in North Carolina. Much bigger and better than the San Deigo house. I will probably have to redo the San Diego house when I return.

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The graphs are based on the Case-Shiller – FWIW this is their description of how the values are calculated.

This is house price inflation.

The Case-Shiller Index, by comparing the sales price of a house in the current month to the price of the same house when it sold previously, tracks how many more dollars it takes to buy the same house over time, thus tracking the purchasing power of the dollar with regards to houses in various markets. This makes the index a measure of local “house-price inflation.” When the index shows that prices in Los Angeles shot up 188% in 19 years, despite the plunge in the middle, it doesn’t mean that houses have nearly tripled in size or opulence, but that in that metro, the dollar’s purchasing power with regards to houses has gotten crushed.

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It is a short sale. All the short sale houses I have observed take a long time to sell. They also have weird price changes.

I remember being obsessed with a house in university city back when first house shopping. It was our perfect area, listed for a great price. Unfortunately, it was a short sale and according to our agent everytime an offer came in the bank wanted more. I could actually observe the process using Zillow price history. She advised leaving it to the experts rather than wasting our time. In the end this house sold for the market rate after a long, long time on the market.

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[quote=cvmom]Brick is not good in earthquakes, doesn’t flex.[/quote]

Yep. Brick is the worst construction material in earthquake-prone areas.

“California learned the dangers of brick construction when a major earthquake struck Long Beach in 1933, crumbling schools, churches and shops. Some 120 people died. These so-called unreinforced masonry buildings, or URMs, are vulnerable because the mortar essentially crumbles apart during shaking, bringing down the roof and walls.”

http://www.latimes.com/local/lanow/la-me-earthquake-safety-brick-buildings-inland-empire-20180209-htmlstory.html

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$850/month HOA for that La Jolla house 7656 Caminito Coromandel. Although, as I work at UCSD I would love that location. I wonder what the $850/month is used for?

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