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It depends. What utilities and amenities come with the HOA fee? Property insurance rates are different. Would you be using the onsite gym or pool? Owning the house means maintaining a yard – that has a cost even if it’s in terms of your time. Lots of factors to consider.

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You shouldn’t feel obligated to explain your decision. This is just an internet board where people swap information and opinions. Everyone has to make the decisions they feel are right for their situation.

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In other words, the sale price has been reduced to $237,000. The “incentive” exists only to maintain the fictional $315,000 value so as to mollify the prior buyers and assure them that they haven’t lost $75k in equity.

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I disagree. The reason the subprime problems have started in those areas is because those are the weakest borrowers relative to the amounts they’ve borrowed. When subprime gets turned off the middle can move down in their expectations; the bottom has nowhere in the market to go but out.

There are just about as many NINJA deals floating around in the North County area as anywhere else. Right now, I’d say the only areas that are not as significantly effected by subprimes are the upper price ranges. However, all these market segments are ultimately connected, and what happens on the bottom will eventually make itself felt – albeit to a lesser degree – at the top.

Witness the pricing trends. When the market started to turn it was spotty and inconsistent. As the cycle has progressed that trend has spread to pretty much everywhere. Even the number of ultra-lux homes being sold has dropped off a cliff.

The effects of the subprime loans extended far beyond just the borrowers who used them on the way up; I see no reason why that would change on the way down.

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23109VC wanted opinions and he got them. He probably did have a bias to the decision going in, but so what? He solicited the whole range of opinions, has considered them and has made what he believes to be an informed opinion. If more people had done that on this run-up it would never have gotten as far as it did. It more people do this as it goes down the price structure might not overcorrect.

The key to living with this type of decision is to realize that any decision would involve a compromise of some sort; the trick is to pick the compromise you can live with.

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Did anyone happen to catch the news blurb a couple weeks ago where a 73-year old retired Marine who was on vacation in Costa Rica (I think) killed an armed mugger with his bare hands? Mugger holds up a tour group and this guy goes for him, gets him into a chokehold, and punched his ticket.

I understand one of the college instructors at VT walked forward instead of cowering. The news said something about him being a Holocost survivor. He still got killed but maybe that wouldn’t have happened had he not been the only one.

I think the will to act is a lot more important than the tools at hand. A person who isn’t mentally prepared to pull the trigger when they have the chance is a lot better off not carrying. I think that includes more people than it excludes. If you ever watch those reality shows like “Wildest Police Videos” you’ll see that sometimes even an armed police officer facing a threat will turn and run instead of pulling their weapon and shooting it out. Flight or fight. Nobody really knows until they’re there.

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The MLS reports 20 sales in this project during the last 12 months, 4 of which involved losses – even if limited to the cost of sales. There are currently 4 pending sales, of which 2 are foreclosure and short sales, respectively. There are 15 actives, which includes 1 foreclosure, 1 short sale and 3 other units that are underwater on their loans; this is in addition to the listings where it is apparent the sellers are trying to break even.

The must-sells have increased in percentage among the pendings and listings vs. the closed sales. They now comprise AT LEAST 30% of the listings and 50% of the pendings. It doesn’t take a genius to see which direction this is going.

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This is like asking us if you should have carrots or peas with your dinner tonight. The answer comes dowm more to how you want to live your life than anything else.

If you don’t have to live in California in order to make a living or be happy – and 95% of Americans don’t – then there’s no economic reason to stay here.

The one thing you want to understand is that outside of the metro areas, homeownership is not that difficult to achieve. At the same time, it is also not the one-shot elevator ride to personal wealth. In those areas, housing is housing and once you get that settled you can free up your discretionary income for other types of investment beyond just your domicile.

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I am not an advocate for banning guns, but I do believe that they should all be licensed and anyone who buys should be subject to a real background check. It won’t keep all the guns away from the crooks because a lot of them steal their guns or get their girlfriends to buy them, but having those programs is better than nothing.

The VT shooter never planned to survive his assault and neither did the Columbine kids. I highly doubt Cho’s understanding that his victims could include armed resistance would have stopped him. He just would have bought a vest and upped his arsenal.

I don’t disagree that an armed populace might slow down certain crooks, but that won’t deter an irrational madman. Especially not one who spends a lot of time in planning.

A good percentage of police officers who die by gunfire get killed with their own guns. And they have access to holsters with retention features as well as substantial training in gun retention habits.

With handguns, gunfights that take place at distances greater than 3 feet generally have very low rates of effective hits. The average citizen with a handgun is probably more of a threat to themself and their loved ones than they are to a determined crook.

I like guns, I like shooting, and I’ve owned guns for use in my past occupations (military and police officer) and for the heck of it. I decided to divest my household of guns for safety reasons when I had little kids. I am of the opinion that unless the gun-owner is practicing at a combat range at least a couple times a year the only thing having it in their hands will do is intimidate a coward. They’re kidding themselves if they think any different. They’re better off with a folding knife.

The average 16-year old gangsta doesn’t have enough brains to be that coward, and neither does the madman. As for the libertarian types who want guns to defend themselves from their government, they’re welcome to have at it as far as I’m concerned.

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If the 4.5% interest rate is not the fixed rate of the loan then the payment represents something in between owning the home and renting it. They own the right to profit (or lose) on the resale, but they aren’t any closer to owning the asset itself than if they were renting. The tax break is about the same regardless; it’s just built into the rental rate as opposed to being separate from a mortgage payment.

The downpayment is investment capital from an investment standpoint, and at whatever point the the property isn’t appreciating faster than the rate of inflation then that investment is losing money. The investment may still be ahead, but if its currently bleeding then there are alternate investments that make better economic sense.

As for the “security” of home ownership, I think it’s somewhat overrated.

I think people sometimes project their own problems onto their kids; they feel a little displaced so they search for solutions to prevent their kids from going through that. It’s an admirable motive, but a kid doesn’t feel a relocation until they’re in school and they start to branch out from their household. Really, I think the potential for damage to a kid is a lot higher when both parents have to work obscene hours in an effort to maintain a lifestyle.

I doubt most family renters are compelled to move every 2 years unless they want to for some reason; nor do I think it’s that difficult to find similar homes in the same school area if they’re so concerned about their kids maintaining the same relationships for 7 years at a time. Trust me, by the time kids get into high school their circle of friends are generally different that what they start out with in middle school, and it extends a lot farther than their block. I would never worry about the kids – they don’t start having problems until you start changing schools at other than the start of middle school or high school.

A 2002 sales price is probably a pretty safe bet. It may not be completely “protected” from loss, but neither is it double – let alone triple – the stabilized value at the long term trendline.

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If you give me the name and the hundred block of the street in question I can look those properties up and see whether they’re subdivision lots or part of a condo program. I looked up some sales referenced earlier in this thread and those were condos; that’s why I asked the question.

Condominiums are a form of ownership, not construction. For instance, in an own-your-own mobile home park, the pads they’re buying are usually owned as condominiums, whether there’s a mobile home on them or not. I’ve appraised industrial lots and retail pads owned as condominiums; I’ve appraised lots of freestanding office and industrial buildings that were owned as condominiums and I’ve appraised entire residential projects copnsisting of detached single family homes.

Some of the clues that your project may or may not be a condo project include the following:

– Really small lots; 5,000 SqFt or less

– Unfenced rear yards or fenced areas that don’t seem to correspond to what the lot dimensions would be.

– Private Streets that are less than 40 feet in width.

– Dedicated parking areas for guest parking spaces.

– Clubhouse, pool and other significant common elements for the project. This one isn’t always limited to condo projects but subdivision projects with them are relatively few.

– HOA dues in excess of ~$60/month

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Carpeting and resilient flooring have an economic lifespan of about 5 years, sometimes less under heavy use. Water heaters and dishwashers are good for about 5 years. Cabinets and plumbing fixtures are good for about 15 years, sometimes more. A heater is good for 15 years.

I don’t know how long the IRS thinks these items last. Depreciating a 5-year lifespan by 52% in the first couple years might be okay because it would normally depreciate about that fast anyway.

You’d still have to deal with the IRS’s interpretation of what is personal property, though. Most people would agree that a Persian rug that can be picked up in 10 seconds is personal property whereas the wall-wall carpeting and tile that has to be installed by a craftsman is not personal property. Speaking of which, installation costs are a large part of it, and personal property wouldn’t legitimately include those costs. As I said before, I’m not sure how calling those items personal property would be a benefit unless there’s some double dipping going on.

While we’re at it, personal property would have a resale value. Relative to when it’s installed new, what’s the value of used tile flooring or cabinetry? It’s a lot less than what they add to the value of the realty, I can guarantee that.

Putting your money through offshore banking accounts is all fine too, until the IRS figures out what you’re doing, and then it becomes a lot more trouble than its worth. More than one tax program has proven to be problematic, and it looks like these guys are selling something. You definitely want to know before you go.

Their fees are a bit suspect, too. An appraisal on the realty would only average $350, why is it more expensive to appraise the finishes the house would normally come with?

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I know that when I appraise a property in a market where built in cabinets, appliances, flooring and light fixtures are typical and the house doesn’t have them I make a substantial cost-to-cure adjustment. For appraisal purposes, the dividing line between real property and personal property is the manner of affixation. If you have to glue, nail and cement in finishes, it causes damage and a hole when you remove them.

It’s a tax dodge, and I’ll leave it to the tax experts as to whether or not the tax code legitimately allows it. But those items are definitely not considered personal property in the market. Having said that, I know the tax code does allow writing off the actual costs of repairs and replacements of those short-lived items, so it’s not as if a property owner is being forced to take an actual loss if they claim it as realty rather than personal property. It seems to me that doing both would be double dipping.

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Assuming the area reached parity to the long term trendline in 2001 (neither overvalued nor undervalued relative to the trendline), we could reasonably expect a slightly higher value in 2007 because of inflation and CPI increases.

These homes were apparently built after 2001, so I took the liberty of looking at some sales data of homes of similar size on small lots within a mile or so of these neighborhoods during the 2001 period. So we’re talking about homes built in 1999-2001, of 1,800 – 2,200 SqFt in size, and on small subdivision lots.

The sales data I saw ranged in price from about $220k-$250k during the year. For reference, these homes peaked out in the low $500k range and are now selling in the $460k range, so I don’t think they’re too far off in terms of value from the house we’ve been discussing all along. The neighborhood includes mostly larger homes so I think it might be a touch superior to the neighborhood we’ve been discussing.

One clarification I would ask is whether 23109Vcs rental home is a condo unit or a home on a subdivision lot. I didn’t reme,ber the address so I couldn’t look it up. If it is a condo unit by ownership then the value would probably be a little less relative to the homes I was looking at.

Anyways, assuming a 2001 value for the 1999 home in the middle of that range at $240,000, the value today at the trendline would be just under $280,000. This would be the “fair” price for that home today, and would probably hold up well over time. I’d anticipate the fair value for 23109VCs rental home to be a little less than that right now.

Of course, the market corrections so far have always overshot the mark dipping into undervalued territory, so it is not beyond the realm to think that it could return to the original value of $240k.

Bottom line here is that 23109VCs rental at $300k might be a reasonable gamble if he doesn’t mind being underwater for a few years. At that price the advantages of the financing might make up for the possibility of further price declines. At an 8% interest rate, the payment on $240k is $1,749/month P+I, whereas $300k @ 6% is $1,789. A $350,000 sale price would put that payment at $2,087/month, not counting taxes and insurance, Mello-Roos and HOA.

It just bears repeating here that the difference between $350,000 and $240,000 is $90,000.

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I can’t really see auctions being that effective in moving these properties at reasonable prices. In areas where homes are $200k and less I can see it working, but once the prices exceed that the buyers who can perform are going to want too large a discount (dollar wise) to make it worth the lender’s while. A 30% discount on a $100k home is only $30,000 – a lender can take that kind of loss. They can’t take a 30% loss on a $500k home.

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