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Having the best agricultural technology simply means that we can produce food more cheaply and in larger quantities than just about anyone. That said, if you want to eat healthy food here in the US, you’ve got plenty of choices. Of course this is a free country, so if you want to eat unhealthy food, that’s your call too. I’m not a big fan of mass-produced US beef, but it is cheap and there’s something to be said for a country of 300 million (!) people where almost everyone can eat a hamburger whenever they want. Not that eating hamburgers is good for you, I’m just saying we’ve made them really, really cheap, so I wouldn’t worry about losing our food supply to foreign imports.

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We also have the some of the best agricultural technology in the world. That’s one of the reasons we have so many illegals, when NAFTA passed, Mexico got flooded with our cheap produce and it put all of their farmers out of work. Now they’re bussing tables at Applebee’s.

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Hey jg, do you know of a company offering gold stored in Switzerland? I have been contemplating a bit of gold but I don’t want to have to keep Kruggerands in a shoebox.

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Actually, I included the property taxes when I ran the numbers for that mortgage in my previous post. Can’t forget the T in PITI, after all. I think most of the people on this board will take it into account although they may not explicitly mention it.

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Good points daney143, I totally agree about Del Cerro. I just ran the numbers and with a 30 yr. fixed at 6%, your payment is just under $2800/mo ($450K price, $90K down); with the tax deduction that’s very doable for a household making $100K/yr and maybe even less if they’re thrifty. It is still a little more pricey than renting, especially considering your giving up the income you can generate from that $90K down payment. What’s the median household income here in SD? Also, how many first time buyers will have a $90K down payment?

I still think it is a good idea to wait until all of the weak hands are flushed from this market over the next few years. A lot of people really stretched to get themselves into these houses.

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Forecasting models like Campbell’s probably couldn’t account for the effects of massive subprime, variable-rate mortgage lending and 50+% DTI ratios. That completely distorted things this time around. Also, the internet helped the get-rich-quick stories disseminate more widely and quickly this time. Hence the big, big bubble. These two factors are also going to help make this crash worse than the last one.

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My seller is crediting them money for the closing costs.

Does this mean the recorded sale price of the home won’t truly reflect the actual price the buyer paid? If not, it will distort the comps. If there is a lot of this monkey business going on (I suspect there is), then prices have fallen farther than the numbers indicate.

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Our houses are crappy because they’re built by illegal aliens and meth addicts and sold to us by conmen. We buy them anyway. Our food is full of e-coli and toxic chemicals. We eat it anyway. I remember when I was a kid, we read stories in school about how shoddy Soviet-manufactured goods were because there was no incentive to make things any better. Weren’t things supposed to be different here?

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Start by finding how much a similar house in the neighborhood rents for. Then take your 20% down, 80% fixed rate 30 year mortgage, add property taxes and maintenance and subtract the tax deduction. When this number is pretty close to the rent number, that’s a good price. I could see paying maybe a hundred more per month to own than rent if I really liked the place. Oh also, don’t forget that your 20% down payment can earn over 5% annually in CDs these days (you’ll lose 100% of that when you buy), and that if you work for yourself you can write off a portion of your rent for your office. My guess is that when you really do the math, you’ll find that most prices in San Diego are still too high.

My predictions?

* Leaping from condo balconies will gain popularity as a suicide method in 2007

* A rash of mysterious home and condo fires will sweep southern California in 2008

* In 2009, workers in housing-related industries will transition to careers with higher demand for workers, such as strawberry cultivation, garden maintenance, and home cleaning

* Downtown condo HOAs will modify their bylaws to allow balcony vegetable gardens and the keeping of chickens as “pets” in 2010

* 2011 might be a good time to think about buying a house in SD

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Del Cerro is a great neighborhood and it’s close to Mission Trails which is a nice bonus. However, those homes are just as bubblicious as in other parts of SD. They were $300K homes back in 2002.

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I keep hearing people say that rents are going up, but I haven’t seen it in my case or with any of my friends. It may be due to many FBs trying to cover more of their carrying costs on their “investments” by increasing their asking rent. If you’re looking for a place to rent now, it would be a good idea to look around carefully before signing anything, there are probably still some deals to be had from good landlords that have owned their properties for a while. Also, we’ve noted before on this board that the rental market is pretty tight below $2K/month, but once you go over that you can get a lot for your money.

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Houses in OB were $300K back in 2000. Incomes have been basically flat since then, the legal population hasn’t really changed, OB is the same white trash tweaker heaven it was back then but now the houses are $700K? Take away the crazy loans and speculation and it’s going to fall HARD. My guess is 3-5% drops for the next 3 years and then 5-10% drops for several more years after that. Get a good rent house and settle in to watch the show…

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sdrealtor wrote: I have a hard time seeing that happen. I bought my house in late 1998 and put 20% down. With excellent credit my rate was around 8%. My monthly PITI + HOA was significantly more than rent Pre-tax I spent about $10,000 more per year. After tax assuming a 37% marginal tax bracket I was slightly ahead.

Why do you have a hard time seeing that happen when that was exactly what happened in your case? Of course you’ll take the tax benefit into account when comparing the costs of rent vs. buy. You bought when it was cheaper (or at least almost the same) as renting, all things considered, using reasonable financing with 20% down. Those days will return, but we’re going to have to wait until all of the big spenders have exhausted their HELOC money. Also, was 1998 the bottom? I thought it was more like 1995.

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I think Perry is right, there are probably a lot of these people out there. That negative appreciation is the real killer — if homes are only going down 2% a year, you’re losing $10K/year on your $500K home. Even if we had rent/payment parity for the same property (which we don’t), that small negative appreciation throws the renter’s side of the equation waaaaaay ahead. I have been dinged before on this forum for saying that you shouldn’t buy unless it’s cheaper than renting (using 20% down, fixed 30 year loan), but I believe that those days will return. It may be 2010 or even later, but we’ll get there eventually.

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That’s one reason I sold my condo in that neighborhood. We had a “secure” parking garage and almost all of us had our windows broken in at least once while parked there. We had some tweaker types renting one of the units, and it was a pretty nice building. This was back in 2003-2004.

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