[(former)FormerSanDiegan]

What part of town ?

When does the ARM reset ?
What is the index and margin of the reset ?

Since you are a few years into loan it is likely to increase significantly. Is the 500-700 per month negative based on the I/O loan ?

Is 8400 per year (negative cash flow) a lot of money to you ?

How much will your cash flow improve by moving ?
Raise in new job/ lower cost to rent.

If your new job pays more and your new rent (in the place you move to) is less than you can rent your old place for, you could consider keeping the place and renting it out.

1 BR condos are at the bottom of the food chain. Your unit seems to be on the leading edge of the bust (down at least 25% already). It’s value will probably drop to the point where someone could buy it as a rental and have positive cash flow. That means another 50K or more in depreciation.
That said, it might be difficult to sell at the price you want to sell it. FOr the 70K or so you might have to bring to closing, you might be able to carry the negative for about a decade. Sometimes it’s too late to sell.

Is your credit good ?

[(former)FormerSanDiegan]

What part of town ?

When does the ARM reset ?
What is the index and margin of the reset ?

Since you are a few years into loan it is likely to increase significantly. Is the 500-700 per month negative based on the I/O loan ?

Is 8400 per year (negative cash flow) a lot of money to you ?

How much will your cash flow improve by moving ?
Raise in new job/ lower cost to rent.

If your new job pays more and your new rent (in the place you move to) is less than you can rent your old place for, you could consider keeping the place and renting it out.

1 BR condos are at the bottom of the food chain. Your unit seems to be on the leading edge of the bust (down at least 25% already). It’s value will probably drop to the point where someone could buy it as a rental and have positive cash flow. That means another 50K or more in depreciation.
That said, it might be difficult to sell at the price you want to sell it. FOr the 70K or so you might have to bring to closing, you might be able to carry the negative for about a decade. Sometimes it’s too late to sell.

Is your credit good ?

[(former)FormerSanDiegan]

The price premium for housing in good public school areas tends to multiply if you include all the factors. First, you have to pay way too much for housing. Second, you have to commute at least 45 minutes. Third, your utility bills will be higher for these more inland communities.

If I were looking for an affordable, family-friendly community situated perfectly for working in La Jolla and downtown I would choose Bay Park. The elementary schools are actually quite good, but the middle schools and high school suck.
Consider paying paying for private school from 6th grade on from the money you save on auto/commuting costs, utilities/ housing You can find bay/ocean view properties in areas where you do not need A/C here in the 600K range (and getting cheaper by the month).

P.S. – Regardless of where you end up, I also recommend renting first.

[(former)FormerSanDiegan]

The price premium for housing in good public school areas tends to multiply if you include all the factors. First, you have to pay way too much for housing. Second, you have to commute at least 45 minutes. Third, your utility bills will be higher for these more inland communities.

If I were looking for an affordable, family-friendly community situated perfectly for working in La Jolla and downtown I would choose Bay Park. The elementary schools are actually quite good, but the middle schools and high school suck.
Consider paying paying for private school from 6th grade on from the money you save on auto/commuting costs, utilities/ housing You can find bay/ocean view properties in areas where you do not need A/C here in the 600K range (and getting cheaper by the month).

P.S. – Regardless of where you end up, I also recommend renting first.

[(former)FormerSanDiegan]

The price premium for housing in good public school areas tends to multiply if you include all the factors. First, you have to pay way too much for housing. Second, you have to commute at least 45 minutes. Third, your utility bills will be higher for these more inland communities.

If I were looking for an affordable, family-friendly community situated perfectly for working in La Jolla and downtown I would choose Bay Park. The elementary schools are actually quite good, but the middle schools and high school suck.
Consider paying paying for private school from 6th grade on from the money you save on auto/commuting costs, utilities/ housing You can find bay/ocean view properties in areas where you do not need A/C here in the 600K range (and getting cheaper by the month).

P.S. – Regardless of where you end up, I also recommend renting first.

[(former)FormerSanDiegan]

23% of households in LA
10% of households in OC
9% of households in SD
6% of households in SC

That leaves 52% of the CA millionaires living in Riverside, San Fernando Valley or maybe Inland Empire?

A bit myopic.

You forgot the following not-so-poor counties which could easily contribute a few percent (e.g. 3-5%) of the states millionaires.
Santa Barbara, Monterey, San Luis Obispo, Marin, San Francisco, Sonoma, Napa, Sacramento

Throw in some rural ranchers and landowners from the other 46 counties and there you go.

[(former)FormerSanDiegan]

23% of households in LA
10% of households in OC
9% of households in SD
6% of households in SC

That leaves 52% of the CA millionaires living in Riverside, San Fernando Valley or maybe Inland Empire?

A bit myopic.

You forgot the following not-so-poor counties which could easily contribute a few percent (e.g. 3-5%) of the states millionaires.
Santa Barbara, Monterey, San Luis Obispo, Marin, San Francisco, Sonoma, Napa, Sacramento

Throw in some rural ranchers and landowners from the other 46 counties and there you go.

[(former)FormerSanDiegan]

23% of households in LA
10% of households in OC
9% of households in SD
6% of households in SC

That leaves 52% of the CA millionaires living in Riverside, San Fernando Valley or maybe Inland Empire?

A bit myopic.

You forgot the following not-so-poor counties which could easily contribute a few percent (e.g. 3-5%) of the states millionaires.
Santa Barbara, Monterey, San Luis Obispo, Marin, San Francisco, Sonoma, Napa, Sacramento

Throw in some rural ranchers and landowners from the other 46 counties and there you go.

[(former)FormerSanDiegan]

Undervalued in 2000? If we believe the GS report with a median of $375k that would make the median home 7x the median income. I’m not sure how they as so called economists can make the assumption that this is fiscally a good thing. It seems to me that median homes should be 3x the median income or in line with rents.

7x the median income was near the last low.

Regarding median price to be 3X median income.
I will explain why that notion is completely bogus, since it crops up here occasionally. The reason is that it applies a microeconomic principle to a macroeconomic statistic.

It is correct that a home buyer can typically afford a home priced at 3-4 x their income using typical standards. However, consider that in Southern California about 50% of the population rents. The other 50% live in a mix of houses and condos. Therefore, it is more likely that the 70th or 75th percentile in income is likely to line up with the median price of a single family home. Recently it was as high as the 90th percentile. At the last low in San Diego in the mid 1990s it approached the 60th percentile, considerably above the median.

Also, remember that median incomes include those who are transitioning between careers, working part time, underemployed, going to school, etc. Those who buy homes are typically (but perhaps not in recent years) in a position with more stable income and a group that naturally selects out people in transitory jobs.

[(former)FormerSanDiegan]

Undervalued in 2000? If we believe the GS report with a median of $375k that would make the median home 7x the median income. I’m not sure how they as so called economists can make the assumption that this is fiscally a good thing. It seems to me that median homes should be 3x the median income or in line with rents.

7x the median income was near the last low.

Regarding median price to be 3X median income.
I will explain why that notion is completely bogus, since it crops up here occasionally. The reason is that it applies a microeconomic principle to a macroeconomic statistic.

It is correct that a home buyer can typically afford a home priced at 3-4 x their income using typical standards. However, consider that in Southern California about 50% of the population rents. The other 50% live in a mix of houses and condos. Therefore, it is more likely that the 70th or 75th percentile in income is likely to line up with the median price of a single family home. Recently it was as high as the 90th percentile. At the last low in San Diego in the mid 1990s it approached the 60th percentile, considerably above the median.

Also, remember that median incomes include those who are transitioning between careers, working part time, underemployed, going to school, etc. Those who buy homes are typically (but perhaps not in recent years) in a position with more stable income and a group that naturally selects out people in transitory jobs.

[(former)FormerSanDiegan]

Undervalued in 2000? If we believe the GS report with a median of $375k that would make the median home 7x the median income. I’m not sure how they as so called economists can make the assumption that this is fiscally a good thing. It seems to me that median homes should be 3x the median income or in line with rents.

7x the median income was near the last low.

Regarding median price to be 3X median income.
I will explain why that notion is completely bogus, since it crops up here occasionally. The reason is that it applies a microeconomic principle to a macroeconomic statistic.

It is correct that a home buyer can typically afford a home priced at 3-4 x their income using typical standards. However, consider that in Southern California about 50% of the population rents. The other 50% live in a mix of houses and condos. Therefore, it is more likely that the 70th or 75th percentile in income is likely to line up with the median price of a single family home. Recently it was as high as the 90th percentile. At the last low in San Diego in the mid 1990s it approached the 60th percentile, considerably above the median.

Also, remember that median incomes include those who are transitioning between careers, working part time, underemployed, going to school, etc. Those who buy homes are typically (but perhaps not in recent years) in a position with more stable income and a group that naturally selects out people in transitory jobs.

[(former)FormerSanDiegan]

cantab –

Here is the CME site:
http://www.cme.com/trading/dta/del/product_list.html?ProductType=hng

Click on San Diego to see SD pricing.

NOV 2007 is 224.60
As of yesterday, the pricing for NOV 2011 was 187.00
This is the price today for NOV 2011 Option.
To make money the price of that option has to go up or down. For example, the price today for Nov 2011 is 187. Suppose the news gets worse and the market anticipates more down side and in a few months that NOV 2011 price goes down to 160. If you shorted this, you could get out and make money.

The problem with these is that the market is anticipating the 16% decline. You can only make money or hedge if the results are considerably better or worse than this market anticipates.

The best time to make those kinds of plays are at market inflection points (turn-around in conditions). We had a clearyl defined inflection starting about 2005. If one had been able to short the housing futures at that point one could have made some dough.
In my opinion the next opportunities will be when the market anticipates a rebound that does not happen.

[(former)FormerSanDiegan]

cantab –

Here is the CME site:
http://www.cme.com/trading/dta/del/product_list.html?ProductType=hng

Click on San Diego to see SD pricing.

NOV 2007 is 224.60
As of yesterday, the pricing for NOV 2011 was 187.00
This is the price today for NOV 2011 Option.
To make money the price of that option has to go up or down. For example, the price today for Nov 2011 is 187. Suppose the news gets worse and the market anticipates more down side and in a few months that NOV 2011 price goes down to 160. If you shorted this, you could get out and make money.

The problem with these is that the market is anticipating the 16% decline. You can only make money or hedge if the results are considerably better or worse than this market anticipates.

The best time to make those kinds of plays are at market inflection points (turn-around in conditions). We had a clearyl defined inflection starting about 2005. If one had been able to short the housing futures at that point one could have made some dough.
In my opinion the next opportunities will be when the market anticipates a rebound that does not happen.

[(former)FormerSanDiegan]

cantab –

Here is the CME site:
http://www.cme.com/trading/dta/del/product_list.html?ProductType=hng

Click on San Diego to see SD pricing.

NOV 2007 is 224.60
As of yesterday, the pricing for NOV 2011 was 187.00
This is the price today for NOV 2011 Option.
To make money the price of that option has to go up or down. For example, the price today for Nov 2011 is 187. Suppose the news gets worse and the market anticipates more down side and in a few months that NOV 2011 price goes down to 160. If you shorted this, you could get out and make money.

The problem with these is that the market is anticipating the 16% decline. You can only make money or hedge if the results are considerably better or worse than this market anticipates.

The best time to make those kinds of plays are at market inflection points (turn-around in conditions). We had a clearyl defined inflection starting about 2005. If one had been able to short the housing futures at that point one could have made some dough.
In my opinion the next opportunities will be when the market anticipates a rebound that does not happen.

[(former)FormerSanDiegan]

Borat – I thought the same thing, but the priginal post addressed this. 2.95 million population, but less than 1 million HOUSEHOLDS. The 100K was number of HOUSEHOLDS with net worth greater than 1 mil.

[Author]

Posts