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December 8, 2006 at 8:39 AM in reply to: thinking buying eventually; any risk in entering 1 year lease now? #41342
(former)FormerSanDiegan
Participantsurveyor –
I have had a similar experience in the past… twice. Both times the tenant wanted to leave about 3/4 the way through the second year of their lease. Better to let them out on good terms than have someone pissed at you living in your property.
They are legally liable for the rent while the place remains empty (as long as you advertise and don;t increase the rent).
Or if the market is like it is now, there’s the bonus of increasing the rent for the next tenant.If I were procrastinator I wouldn’t put off signing that lease.
December 7, 2006 at 11:27 AM in reply to: thinking buying eventually; any risk in entering 1 year lease now? #41298ParticipantI see absolutely no risk in signing a 1-year lease right now.
If rents drop significantly over the next 12 months (unlikely), you won’t want to buy a year from now anyway. If rents go up, and it looks like the time for you to buy is in 6 months (also highly unlikely) then I’m sure the landlord will let you out and fill their rental with a tenant at a higher-rent.It’s really a win-win right now in either case for you.
Participantsdr – Thanks for the clarification. My comment was at least partially in jest.
I also agree with the range of your prediction for 2007. It falls in line with what I anticipate.
Participant“For those that care, I think that prices will go down nominally another 5 to 10% this year. Beyond that, I’m not banking on anything.”
Since today is Dec 6 that comes out to … 0.25% to 0.5% PER DAY ! Are you serious.
ParticipantParticipantHope you are thirsty qcomer. In addition to the service sector report, jobs numbers came in high for November. Make sure it’s a 22 oz or larger beer. Or better yet, maybe the following
< a href="http://most-expensive.net/most-expensive-beer" > Expensive Beer
ParticipantSounds like right now is a good time to re-finance a loan. Rates are low, brokers are hungry.
ParticipantToll Brothers stock was chopped in half this year and is currently recovering from that drop. The home builders may be able to still operate with some profits in the coming year. Maybe even at a level of about 50 – 60% of what they did in the boom years. While this is positive for their stocks, it does not necessarily mean that housing prices have bottomed.
Participantsdr – getting down to early 2003 prices would be another 27 % according to the example I showed. I tend to agree with the point that we are not likely to see prices to pre-2003 levels. I am in the 18-25% nominal price correction camp. (30-37% real dollars).
This DOES NOT mean that we are at the price bottom in either duration or level. As others have stated above… expect more years and tears to pass before that happens.
ParticipantSo, in other words we had 37% appreciation in one year (3/2003 to early 2004) ?
It was more like 23% appreciation in that period. So it is pretty close… within 15% or so of early 2004 prices.
sdr – I agree with your general premise that it is unlikely we will get back to early or pre-2003 numbers, because we did see a 40-50% run-up during the period of Jan 2003 to mid-2005.
ParticipantOK. I don’t have the resources either of you do so I pulled the latest example I could find in 5 minutes from free web sources in the area that someone asked for … No assumptions, no bias, no conclusion. Draw your own….
17059 Oculto Way, 92127
Sale History
11/15/2006: $515,000
03/25/2003: $375,000
07/22/1999: $235,000ParticipantToday’s news : “The Institute for Supply Management’s services index rose to 58.9 in November from 57.1 in October. The median forecast of Wall Street economists was for a decline to 56.0. Gauges of employment, prices paid and new orders also rose.”
So, we found out earlier this week that the Manufacturing activity (20% of the economy) is contracting at slightly less than a reading of 50, but for 80% of the economy, the services index is at 58.9.
Seems consistent with the ~2% growth we have seen previously. The brakes have been applied, however, the economy is not yet to the cliffs.
I’m sure there must be some doom and gloom within some components within the index that are down and that the reading was overly optimistic because of some technicalities.
December 5, 2006 at 9:44 AM in reply to: The “Property Tax” Factor and People Just Don’t Care what Things “Really” Cost #41155Participantrhino –
Yes it is true that you can appeal your property tax basis to a lower rate when the value drops. However, if/when the price recovers the Tax Man can also bring it back up to the prop 13 level, which is the purchase price plus 2% per year, as long as the current valuation supports it. Around 2000-2002 this became a hot-button issue.
December 5, 2006 at 8:33 AM in reply to: The “Property Tax” Factor and People Just Don’t Care what Things “Really” Cost #41146ParticipantWe have always avoided HOA fees and mello roos like the plague. Property taxes have always been a consideration when buying, especially our first house.
In the longer term property taxes (because of the prop 13 limitations) tend to keep people in homes who otherwise might consider moving. Remember that once you purchase, future property taxes are capped at an annual 2% increase. People who have lived in their place for 5+ years actually have an incentive to keep living in their homes to avoid a huge property tax increase.
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