[garysears]

I finally figured out how to make a .jpg out of an excel graph. I still can’t figure out how to make it show up here if that is even possible. I also found a good site for all historical sales data in San Diego County. Try http://www.sdlookup.com and go to the “Closed Sales” part.

This is all the historical sales data I could find for all 12 (identical) units in the complex. You might find this interesting:

http://i17.tinypic.com/52w3xnk.jpg

The surprising thing I noticed is that the prices people were paying in 1997 were the same nominal prices as in 1985. That is a pretty flat trend line until late ’01 to early ’02. The slope of the graph really increases at that point. I think the scale gives a pretty true indication of the effects of easy financing. Note how the “peak” price is really a pinnacle due to the sale earlier this year. The last 6 points represent 5 different units.

I also need to correct my statement earlier. I don’t think #5 and #6 will end up being foreclosures due to the fact that the current owners bought these well before the current runup and ridiculous financing. I made an assumption that was unwarranted.

[garysears]

I finally figured out how to make a .jpg out of an excel graph. I still can’t figure out how to make it show up here if that is even possible. I also found a good site for all historical sales data in San Diego County. Try http://www.sdlookup.com and go to the “Closed Sales” part.

This is all the historical sales data I could find for all 12 (identical) units in the complex. You might find this interesting:

http://i17.tinypic.com/52w3xnk.jpg

The surprising thing I noticed is that the prices people were paying in 1997 were the same nominal prices as in 1985. That is a pretty flat trend line until late ’01 to early ’02. The slope of the graph really increases at that point. I think the scale gives a pretty true indication of the effects of easy financing. Note how the “peak” price is really a pinnacle due to the sale earlier this year. The last 6 points represent 5 different units.

I also need to correct my statement earlier. I don’t think #5 and #6 will end up being foreclosures due to the fact that the current owners bought these well before the current runup and ridiculous financing. I made an assumption that was unwarranted.

[garysears]

I have a question about the perceived tax “savings” of the mortgage interest deduction. I am married (no kids) and filed the 1040EZ last year. I am not currently itemizing deductions as I am a renter and have no taxable investment earnings. I don’t think I can come up with more deductions than the standard deduction as I consider my living expenses relatively low and nonqualifying.

The standard deduction was $16,900 per year last year for married couples. Now if I were to begin itemizing my deductions after buying a house I would have to come up with $16,900 before I started saving any money. I intend to buy a property in a few years under 200K. Here is a conservative calculation I did:

My interest payments the first year at current rates (7.0 for 200K loan) would be $13,935.65. I still would need to have $3K more in deductions before I started seeing any benefit. I just don’t think that my case would yield significant mortgage interest tax “savings”.

I don’t assume any tax benefit when calculating the rent vs buy numbers. The principal payments only add up to $2031 the first year. It would take a number of years for the principal payments to start making a significant monthly difference. At the end of year 3 it would finally get to $200/mo (36th payment) which is only $110 more than the first payment. (It would take 13 years to reach $400 per month in principal).

Can any one point out what I am not understanding? I am a tax novice so I could be missing something completely. How would the mortgage interest payments be a tax advantage for someone like me?

[garysears]

I have a question about the perceived tax “savings” of the mortgage interest deduction. I am married (no kids) and filed the 1040EZ last year. I am not currently itemizing deductions as I am a renter and have no taxable investment earnings. I don’t think I can come up with more deductions than the standard deduction as I consider my living expenses relatively low and nonqualifying.

The standard deduction was $16,900 per year last year for married couples. Now if I were to begin itemizing my deductions after buying a house I would have to come up with $16,900 before I started saving any money. I intend to buy a property in a few years under 200K. Here is a conservative calculation I did:

My interest payments the first year at current rates (7.0 for 200K loan) would be $13,935.65. I still would need to have $3K more in deductions before I started seeing any benefit. I just don’t think that my case would yield significant mortgage interest tax “savings”.

I don’t assume any tax benefit when calculating the rent vs buy numbers. The principal payments only add up to $2031 the first year. It would take a number of years for the principal payments to start making a significant monthly difference. At the end of year 3 it would finally get to $200/mo (36th payment) which is only $110 more than the first payment. (It would take 13 years to reach $400 per month in principal).

Can any one point out what I am not understanding? I am a tax novice so I could be missing something completely. How would the mortgage interest payments be a tax advantage for someone like me?

[garysears]

I posted this on the wrong thread before.

Part of the UT article today quoted the guy as saying that foreclosures aren’t affecting real estate prices. Well something sure is. If not yet, then look out when they do!

I just got off the phone with a Countrywide sales lady. She was pretty straightforward about some of the issues Countrywide is having in California and especially here in San Diego. She said countrywide has over 300 REO properties in San Diego county alone. I haven’t checked the addresses on the REO site but I have no reason to doubt her. She said she was shocked that she found they have some $1 million plus homes on that list. I don’t think anyone here would agree with the UT article that this is a subprime problem.

BTW, I looked at sales data for 3140 / 3142 Midway Drive on Point Loma / Old Town because I almost bought there in late 2003. Of 8 sales with identical 2/2 760sf plans sold in the last 2 years, the median sale price was $295K. There is one on the market right now for $230K. Another has been on the market for 150 days at $250K with no bites. They were asking around $220K in DEC ’03 / Jan ’04. I drove by there today and saw 4 “for sale” signs in windows but couldn’t find them all on the MLS.

[garysears]

I posted this on the wrong thread before.

Part of the UT article today quoted the guy as saying that foreclosures aren’t affecting real estate prices. Well something sure is. If not yet, then look out when they do!

I just got off the phone with a Countrywide sales lady. She was pretty straightforward about some of the issues Countrywide is having in California and especially here in San Diego. She said countrywide has over 300 REO properties in San Diego county alone. I haven’t checked the addresses on the REO site but I have no reason to doubt her. She said she was shocked that she found they have some $1 million plus homes on that list. I don’t think anyone here would agree with the UT article that this is a subprime problem.

BTW, I looked at sales data for 3140 / 3142 Midway Drive on Point Loma / Old Town because I almost bought there in late 2003. Of 8 sales with identical 2/2 760sf plans sold in the last 2 years, the median sale price was $295K. There is one on the market right now for $230K. Another has been on the market for 150 days at $250K with no bites. They were asking around $220K in DEC ’03 / Jan ’04. I drove by there today and saw 4 “for sale” signs in windows but couldn’t find them all on the MLS.

[garysears]

Part of the UT article today quoted the guy as saying that foreclosures aren’t affecting real estate prices. Well something sure is. If not yet, then look out when they do!

I just got off the phone with a Countrywide sales lady. She was pretty straightforward about some of the issues Countrywide is having in California and especially here in San Diego. She said countrywide has over 300 REO properties in San Diego county alone. I haven’t checked the addresses on the REO site but I have no reason to doubt her. She said she was shocked that she found they have some $1 million plus homes on that list. I don’t think anyone here would agree with the UT article that this is a subprime problem.

BTW, I looked at sales data for 3140 / 3142 Midway Drive on Point Loma / Old Town because I almost bought there in late 2003. Of 8 sales with identical 2/2 800sf plans sold in the last 2 years, the median sale price was $295K. There is one on the market right now for $230K. Another has been on the market for 150 days at $250K with no bites. They were asking around $220K in DEC ’03 / Jan ’04. I drove by there today and saw 4 “for sale” signs in windows but couldn’t find them all on the MLS.

[garysears]

Part of the UT article today quoted the guy as saying that foreclosures aren’t affecting real estate prices. Well something sure is. If not yet, then look out when they do!

I just got off the phone with a Countrywide sales lady. She was pretty straightforward about some of the issues Countrywide is having in California and especially here in San Diego. She said countrywide has over 300 REO properties in San Diego county alone. I haven’t checked the addresses on the REO site but I have no reason to doubt her. She said she was shocked that she found they have some $1 million plus homes on that list. I don’t think anyone here would agree with the UT article that this is a subprime problem.

BTW, I looked at sales data for 3140 / 3142 Midway Drive on Point Loma / Old Town because I almost bought there in late 2003. Of 8 sales with identical 2/2 800sf plans sold in the last 2 years, the median sale price was $295K. There is one on the market right now for $230K. Another has been on the market for 150 days at $250K with no bites. They were asking around $220K in DEC ’03 / Jan ’04. I drove by there today and saw 4 “for sale” signs in windows but couldn’t find them all on the MLS.

[garysears]

Rustico, your part about publicizing private pain is well taken. I hadn’t been considering that at all. I guess it is one thing to be an MLS listing in an anonymous sea of listings, but something else entirely to have someone like me bring up your financial situation to a broader audience.

[garysears]

Rustico, your part about publicizing private pain is well taken. I hadn’t been considering that at all. I guess it is one thing to be an MLS listing in an anonymous sea of listings, but something else entirely to have someone like me bring up your financial situation to a broader audience.

[garysears]

Update to 465 /469 E. Bradley Ave:

Since posting the first time I found out Unit #4 at 465 E Bradley sold on May 16 for $197K. That means there is an identical unit in the same complex with a comp 75K below #11. So a 27% decline for #2 and likely #11 (after the bank takes it) seems a done deal. 4 of the 12 identical units in the complex are currently up for sale so it could get worse fast.

Here are the listing prices:

Unit MLS# List Date
2 076051074 $200K 6/14/07
4 SOLD for $197K on 5/16/07
5 078023086 $220K 3/21/07
6 076037262 $250K 5/07/07
11 076057009 $269K 3/26/07

Unit #11 sold for $272K on 04/08/05.
Unit #02 sold for $268K on 10/31/06.

It looks like the owner of #11 is still trying to right the ship, hence the high asking price. I’m real curious to find the last sale data for #5 and #6 as well as the previous sale for #4.

My feeling (hope) is that the low $200K’s will be the expectation soon for all your 800-900 sf 2bd condos in El Cajon. We already have some units at least 30% off the ’05 to ’06 highs. Some distressed units are approaching $200/sf.

745 E Bradley Ave #45 (2/1 806sf)is a bank owed property. It sold for $268K in Jan ’05 and is listed for $190K right now (-30% as listed). But it also has to compete with a sale of the same floor plan in the same unit in OCT ’06 for $174K. There is another unit (#41) listed for $175K and I think it will probably sell for less.

The apartment complex right next door to me at 457 E Bradley Ave just came up for sale as well (12 units, $1.375M). Anyone in the market for a potential condo conversion?

[garysears]

Update to 465 /469 E. Bradley Ave:

Since posting the first time I found out Unit #4 at 465 E Bradley sold on May 16 for $197K. That means there is an identical unit in the same complex with a comp 75K below #11. So a 27% decline for #2 and likely #11 (after the bank takes it) seems a done deal. 4 of the 12 identical units in the complex are currently up for sale so it could get worse fast.

Here are the listing prices:

Unit MLS# List Date
2 076051074 $200K 6/14/07
4 SOLD for $197K on 5/16/07
5 078023086 $220K 3/21/07
6 076037262 $250K 5/07/07
11 076057009 $269K 3/26/07

Unit #11 sold for $272K on 04/08/05.
Unit #02 sold for $268K on 10/31/06.

It looks like the owner of #11 is still trying to right the ship, hence the high asking price. I’m real curious to find the last sale data for #5 and #6 as well as the previous sale for #4.

My feeling (hope) is that the low $200K’s will be the expectation soon for all your 800-900 sf 2bd condos in El Cajon. We already have some units at least 30% off the ’05 to ’06 highs. Some distressed units are approaching $200/sf.

745 E Bradley Ave #45 (2/1 806sf)is a bank owed property. It sold for $268K in Jan ’05 and is listed for $190K right now (-30% as listed). But it also has to compete with a sale of the same floor plan in the same unit in OCT ’06 for $174K. There is another unit (#41) listed for $175K and I think it will probably sell for less.

The apartment complex right next door to me at 457 E Bradley Ave just came up for sale as well (12 units, $1.375M). Anyone in the market for a potential condo conversion?

[garysears]

Patientrenter made a good point and I agree. My post does seem to imply prices will necessarily reach rental investment levels. But I should view that as the theoretical FLOOR of the market. Thanks for the comment.

Several others here have also pointed out that people in fact DO naturally pay a certain premium for the privelage of owning. It is really the amount of that premium that is argued when discussing what “reasonable” means and how far the bubble should deflate. It seems the ownership premium has been quite high in part because recent speculators never really intended to actually pay down their monster loans.

I would recommend trying to determine what premium you personally place on owning given the downside risk. When (or if) prices reach that level you won’t regret buying.

[garysears]

Patientrenter made a good point and I agree. My post does seem to imply prices will necessarily reach rental investment levels. But I should view that as the theoretical FLOOR of the market. Thanks for the comment.

Several others here have also pointed out that people in fact DO naturally pay a certain premium for the privelage of owning. It is really the amount of that premium that is argued when discussing what “reasonable” means and how far the bubble should deflate. It seems the ownership premium has been quite high in part because recent speculators never really intended to actually pay down their monster loans.

I would recommend trying to determine what premium you personally place on owning given the downside risk. When (or if) prices reach that level you won’t regret buying.

[garysears]

Rustico, I went back and reread your post and decided to look for sales data for Sunterra. I found 123 units listed on Zillow but only a few “recent sales”. I found 13 sales in the last 24 months of sales data allowed by the county assessors website. I haven’t been able to get Trulia.com to work with the address. I am pretty new to looking up sales data. Do you know a better way to get older free data online?

This scarce data isn’t too exciting but it certainly agrees with your estimate of at least -40K in value for the middle of ’05 buyers. I would like to see the early ’05 data to see if prices were higher then. Where did you get the 90K from? Do you have access to data I do not?

I haven’t physically been by these places in awhile so I don’t know if identical floor plans can be considered to have identical furnishings inside.

Unit B/Ba SF PRICE SALES DATE
107 2/1 883 $259,900 7/7/2005
258 2/1 883 $270,900 7/7/2005
207 2/1 883 $254,900 7/14/2005
208 2/1 883 $260,900 7/25/2005
242 2/1 883 $259,900 7/25/2005
134 2/1 883 $250,000 8/15/2005

102 2/2 896 $282,900 7/18/2005
101 2/2 896 $272,900 7/22/2005
125 2/2 896 $286,000 9/30/2005
138 2/2 896 $281,800 4/21/2006
121 2/2 896 $236,000 1/30/2007

239 3/2 1114 $319,900 7/20/2005
146 3/2 1114 $275,000 10/6/2006

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