[(former)FormerSanDiegan]

He may be a troll, but I think it’s educational to react to some of the more plausible points and either dispel or correct them as some may be common misconceptions.

Another strange assessment in the original post was that buying in 1994-1998 was “too early”. WIth an absolute bottom in price in late 1995/early 1996, consistently buying properties in the period from 1994-1998 would be pretty much ideal.

[(former)FormerSanDiegan]

He may be a troll, but I think it’s educational to react to some of the more plausible points and either dispel or correct them as some may be common misconceptions.

Another strange assessment in the original post was that buying in 1994-1998 was “too early”. WIth an absolute bottom in price in late 1995/early 1996, consistently buying properties in the period from 1994-1998 would be pretty much ideal.

[(former)FormerSanDiegan]

I guess I missed this rally thingy ?
I thought prices have declined rather precipitously over the past 4-5 months.

[(former)FormerSanDiegan]

I guess I missed this rally thingy ?
I thought prices have declined rather precipitously over the past 4-5 months.

[(former)FormerSanDiegan]

I guess I missed this rally thingy ?
I thought prices have declined rather precipitously over the past 4-5 months.

[(former)FormerSanDiegan]

I guess I missed this rally thingy ?
I thought prices have declined rather precipitously over the past 4-5 months.

[(former)FormerSanDiegan]

I guess I missed this rally thingy ?
I thought prices have declined rather precipitously over the past 4-5 months.

[(former)FormerSanDiegan]

[quote=Critter]What about the OP’s math? He states he can buy properties where the rent “easily” covers 5% of the purchase price. So, a $500K home would rent for $25K.

What am I missing? Is he talking yearly or monthly… I always thought rent calcs should be figured monthly. [/quote]

I am sure he means annually. Nothing wrong with using annual numbers (I prefer that actually, since you can compare to alternative investments and interest rates more easily).

And in actuality it is more like 6% + for single family homes in central San Diego (e.g. Clairemont or Mira Mesa). That’s today with fixed mortgage rates in the 6-6.5% range. Coastal areas are more like 4-5%

For perspective, in 1996 SFRs in central San Diego (e.g. Clairemont) rented at an equivalent of about 7-7.5% of their value (about $900-$1000 per month on a 150-160K house) At that time fixed mortgage rates were around 8%.

I would expect long-term rates to reach the 7-7.5% range in the current down cycle, so I would expect some more downside in prices resulting in gross rents in the 7% range in central SD. That’s another 10-15% price correction.

[(former)FormerSanDiegan]

[quote=Critter]What about the OP’s math? He states he can buy properties where the rent “easily” covers 5% of the purchase price. So, a $500K home would rent for $25K.

What am I missing? Is he talking yearly or monthly… I always thought rent calcs should be figured monthly. [/quote]

I am sure he means annually. Nothing wrong with using annual numbers (I prefer that actually, since you can compare to alternative investments and interest rates more easily).

And in actuality it is more like 6% + for single family homes in central San Diego (e.g. Clairemont or Mira Mesa). That’s today with fixed mortgage rates in the 6-6.5% range. Coastal areas are more like 4-5%

For perspective, in 1996 SFRs in central San Diego (e.g. Clairemont) rented at an equivalent of about 7-7.5% of their value (about $900-$1000 per month on a 150-160K house) At that time fixed mortgage rates were around 8%.

I would expect long-term rates to reach the 7-7.5% range in the current down cycle, so I would expect some more downside in prices resulting in gross rents in the 7% range in central SD. That’s another 10-15% price correction.

[(former)FormerSanDiegan]

[quote=Critter]What about the OP’s math? He states he can buy properties where the rent “easily” covers 5% of the purchase price. So, a $500K home would rent for $25K.

What am I missing? Is he talking yearly or monthly… I always thought rent calcs should be figured monthly. [/quote]

I am sure he means annually. Nothing wrong with using annual numbers (I prefer that actually, since you can compare to alternative investments and interest rates more easily).

And in actuality it is more like 6% + for single family homes in central San Diego (e.g. Clairemont or Mira Mesa). That’s today with fixed mortgage rates in the 6-6.5% range. Coastal areas are more like 4-5%

For perspective, in 1996 SFRs in central San Diego (e.g. Clairemont) rented at an equivalent of about 7-7.5% of their value (about $900-$1000 per month on a 150-160K house) At that time fixed mortgage rates were around 8%.

I would expect long-term rates to reach the 7-7.5% range in the current down cycle, so I would expect some more downside in prices resulting in gross rents in the 7% range in central SD. That’s another 10-15% price correction.

[(former)FormerSanDiegan]

[quote=Critter]What about the OP’s math? He states he can buy properties where the rent “easily” covers 5% of the purchase price. So, a $500K home would rent for $25K.

What am I missing? Is he talking yearly or monthly… I always thought rent calcs should be figured monthly. [/quote]

I am sure he means annually. Nothing wrong with using annual numbers (I prefer that actually, since you can compare to alternative investments and interest rates more easily).

And in actuality it is more like 6% + for single family homes in central San Diego (e.g. Clairemont or Mira Mesa). That’s today with fixed mortgage rates in the 6-6.5% range. Coastal areas are more like 4-5%

For perspective, in 1996 SFRs in central San Diego (e.g. Clairemont) rented at an equivalent of about 7-7.5% of their value (about $900-$1000 per month on a 150-160K house) At that time fixed mortgage rates were around 8%.

I would expect long-term rates to reach the 7-7.5% range in the current down cycle, so I would expect some more downside in prices resulting in gross rents in the 7% range in central SD. That’s another 10-15% price correction.

[(former)FormerSanDiegan]

[quote=Critter]What about the OP’s math? He states he can buy properties where the rent “easily” covers 5% of the purchase price. So, a $500K home would rent for $25K.

What am I missing? Is he talking yearly or monthly… I always thought rent calcs should be figured monthly. [/quote]

I am sure he means annually. Nothing wrong with using annual numbers (I prefer that actually, since you can compare to alternative investments and interest rates more easily).

And in actuality it is more like 6% + for single family homes in central San Diego (e.g. Clairemont or Mira Mesa). That’s today with fixed mortgage rates in the 6-6.5% range. Coastal areas are more like 4-5%

For perspective, in 1996 SFRs in central San Diego (e.g. Clairemont) rented at an equivalent of about 7-7.5% of their value (about $900-$1000 per month on a 150-160K house) At that time fixed mortgage rates were around 8%.

I would expect long-term rates to reach the 7-7.5% range in the current down cycle, so I would expect some more downside in prices resulting in gross rents in the 7% range in central SD. That’s another 10-15% price correction.

[(former)FormerSanDiegan]

SO, what your saying is that stocks are down by 15% in real terms over the past 8 years. But, over much longer periods stocks have outpaced inflation.

I am confused. Am I to expect another decade of negative returns, OR should I expect a reversion to the mean ?

[(former)FormerSanDiegan]

SO, what your saying is that stocks are down by 15% in real terms over the past 8 years. But, over much longer periods stocks have outpaced inflation.

I am confused. Am I to expect another decade of negative returns, OR should I expect a reversion to the mean ?

[(former)FormerSanDiegan]

SO, what your saying is that stocks are down by 15% in real terms over the past 8 years. But, over much longer periods stocks have outpaced inflation.

I am confused. Am I to expect another decade of negative returns, OR should I expect a reversion to the mean ?

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