[hipmatt]

I don’t know if your buddy should be bragging about his deal here.. he saved a whole 10% off peak prices just a year and a half into the (probably largest RE) crash in a place you call 4closure ranch. Surely this trend is just starting.

[hipmatt]

In Escondido all under $2400 per month.

http://sandiego.craigslist.org/apa/315514313.html
http://sandiego.craigslist.org/apa/314895565.html
http://sandiego.craigslist.org/apa/314541345.html
http://sandiego.craigslist.org/apa/313514187.html

BTW.. isn’t a $750k mortgage closer to $5,000 per month with taxes and insurance.

[hipmatt]

2500-3500 for rent seems way too high!

[hipmatt]

We all have different opinions as to the speed and extent of a decline but NO ONE here is expecting good things to happen in the housing market but rather bad things to happen. That makes us all genreally negative on housing.

So a correction = a bad thing.  This is long overdue.  Mostly, irresponsible people will be affected in a negative way, and in the end responsible people will be rewarded.  Housing, may become affordable or in line with rents and incomes again.  How is hoping for that negative?  I say it IS a good thing, hopefully it puts a lot of unethical lenders out of business, and prevents future weeds from sprouting.  People who intend to put a down payment and eventually pay off their home may have a shot at getting a good deal.

Sure, some people will loose their homes, but..

A. They never really owned them or had equity in the first place.

B.  They never really could afford that home in the first place.

C.  Are going to have to rent again, which is actually better for them.

D.  Hopefully they will learn a lesson that buying a house is about paying off a responsible loan in order to OWN a home, not take out any loan possible that gets me in the door. 

E.  Maybe in the future, we will have much tighter lending standards as mandatory.  Once again,  owning a home isn't for everyone, a degree of responsibility is required, it is not a right here in the US, it is a privilege. 

F.  It is a great thing for people who pay cash or have a large down payment.

G.  Hopefully it puts a lot of unethical loan officers, and lenders out of business and forces them to get real jobs.

 

I still consider myself positive on housing. 

[hipmatt]

we don't have job losses in so cal like we did in the late 80s….

 

Not yet at least.   BTW, I think we have just seen the tip of the iceberg when it comes to walking away from a mortgage.  They will do it in masses as this unfolds.

[hipmatt]

Are they trying to make it a “race” or minority issue with that couple on the front with their baby?

[hipmatt]

I fully agree that emotion has a huge role in this bubble. I have been saying this for a while, once emotion goes on the other side, you will see big price reductions. That time is not here yet.. people are still in denial.

[hipmatt]

There are so many questions surrounding this bail out..

Who will qualify for a bail out?
Do you even need a job to qualify?
How does one apply for a bail out?
What new agency will determine and organize the bailing out?
Who will fund the new bureaucracy dedicated to the bail outs?
Do only sub-prime loans qualify?
What about alt-a, traditional, etc mortgages?
Does an idiot that re-fied with a sub-prime loan, then bought cars, pools, etc qualify for the bail out?
Do investors that purchased a second home qualify for a bail out?
How much money will they get? A percentage, a fixed amount… will it be taxable?
How much further into debt will this put our country into?
How much higher are the taxes going to be raised to fund the bail out?
How many times will a household get bailed out? Chances are good that they will need to be bailed out more than once.
Is there a time period from which your loan had to have been originated in to qualify?
How long will it take to get the bail out program up and running and the first bail out is given?
Do people who have already foreclosed qualify for a bail out?

I see numerous law suits regarding who gets the hand outs and who doesn’t if this goes through.

These are some of the obvious questions regarding this ridiculous proposal.

“hundreds of millions of dollars of new federal aid may be needed to assist homeowners at risk of foreclosure.”

Does any homeowner that needs assistance with their mortgage deserve a bail out? All of a sudden everyone in America is struggling to pay their mortgages and thus they sign up for the bail out. I’ll take some of the tax payers money over here please…

[hipmatt]

23109VC

You are a cool guy and take constructive criticism well. You are a smart person from what I’ve seen. I hope you and your family do well. Even if you don’t mow your own lawn 😉 I have a dog, and thus I do mow my own yard, even the yard that I rent in Harveston… anyways…

I feel your pressure about owning a home before you get to old, and let me tell you not to worry about that. You went to school, and now you have a good job. Most Temeculans would be lucky to make half of what you make. I make about 1/3 of what you do and I’m not happy with my job, I will be making a career change as soon as my wife is done w/ school and gets her job going.. less than 18 months. My advice to you would be to live below your means ans work on SAVING, that way you won’t need a 100% loan, and you will have instant equity when you buy your home… and also, about the time frame, you can get a nice 15 year mortgage when housing is cheaper…. and what do you know… you will actually have a paid off house…and relatively soon in your lifetime vs. the average American… that is something that many recent buyers may NEVER have, especially with their current poor spending/lack of savings habits/ridiculous loans/insane prices they paid/the fact that everyone refies to take out money every time their home goes up in value.. etc

[hipmatt]

House looks like a pile for anywhere near that price… yuck!

[hipmatt]

Savings, whats that? Young people don’t save, they finance EVERYTHING.

Houses, Cars, School, Furniture, Jewelry, Toys, plus credit cards, they even need financing for a can opener or headphones that they bought from a tv commercial. Financing just gets more creative, and for longer terms. Very few plan on ever paying off their house or even their cars. They are merely renting or leasing the things they purchase, but prefer the EGO that comes along with “ownership” even though you could argue how much ownership they will ever have of many of their possessions.
Which is why the term “Empire of Debt” describes us perfectly.

[hipmatt]

23109VC I have been following this thread. You have said that you don't feel like you are talking yourself into buying this home, but it is exactly what you are doing.

as to the property taxes…. good luck finding ANY House up in this area, built nit eh last few years that doens' thave 1.8-2.0% property taxes. that's the norm up here.

Completely not true, while most newer homes in Temecula have high taxes, there are MANY areas of Temecula that have Taxes under 1.3% and more in Murrieta too.  BTW there are some NEW homes with low taxes.  I bought a new home in 2002 with a 1.1% tax in this valley and there are still more.  The entire communities of Temeku Hills, Chardonnay Hills, Meadowview, Starlight Ridge, Alta Murrieta, and MANY more all have taxes under 1.3% as well as small or no HOA fees.  Those are "older" but still great communities, and they have larger homes that would suit you better.   Why do you need a "newer home"?  You can granite-ify and stainless-ify out any kitchen, then add custom paint, molding, and shutters, and you will feel just like you were in Harveston, except you will be paying less taxes and you will actually have a decent lot.

the big question is what will this house be worth when the market finally stops falling and begins to rebound. will it have fallen to what i paid or will it have fallen so low that i'm $50-100k upside down.

This is dependent on the economy as a whole.  Temecula is a bedtime community that has little employment to offer that will sustain high end home prices alone.  You have to think, how will our economy be doing in 3-5 years, what will gas prices be then?  Will it always be practical to commute to SD or OC or LA from Temecula?  Personally, I feel our economy is very fragile and faces a lot of hurdles in the future.  We have high inflation, negative savings, tons of excess debt in all levels you can think of, rising commodity prices, weak dollar getting weaker, and a nation full of citizens that prefer to consume vs. work harder.  The only reason we consume, is because the money is loaned to us so cheap.  Other countries work way harder and spend less than us and it shows.  Throw is higher rates, the dems taking over, and geo political volatility, and anyone who is "banking" on smooth sailing has huge balls or really has a crystal ball.

IMO…Anyone doing 100% financing shouldn't be buying a home. Don't take this the wrong way, But you have 2 kids and pay $1400/month for rent and you have limited savings in your pocket. What makes you think that you can keep paying a mortgage comfortably at around 2700/month with a 3rd kid on the way.

Sorry, but I have to agree with this post.  It really doesn't matter how much money you make, you should be able to say, and now is a great time to save.

do you think temecula houses will fall to 2001-2002 prices?? ….in which case this house will sell for 250-275k max. i'd be bummed to be that much upside down.

I absolutely think they can go to those prices.  Thats only 5 years ago right after things started to get crazy.

if rates are up a lot – payment may not be much different. rents will be up..and the whole rent/buy thing may be the same.

I have to disagree with the rents situation.  Rents do seem pricier now, but there is SO much competition in the rental market right now due to speculators that are trying to "ride it out" via rentals and excess inventory that rent prices actually came back down a bit, and in many cases the price is negotiable.  I would never go look at a house, and sigh up for a lease without at least ASKING about flexibility, and playing hardball for a while.
  Many homeowners are desperate for a quality tenant, and after having their homes sit on craigslist for months, they are tired of loosing money on payments towards the empty home.  I bet you can rent a 4 nice bed home in Temecula for under 1900 which will still be considered chump change to your  100% financing  350k loan with 2% tax… ouch.

Here is a perfect example…. read the text..RENT NEGOTIABLE! NEW 4/3 HOUSE IN NEW COMMUNITY http://inlandempire.craigslist.org/apa/309691310.html

Rents are great in that they truly will reflect supply and demand, and there are only so many people living in Temecula that can pay a high rent amount. Normally rents don't go down, but call me crazy, in Temecula, in the future, I think it is possible.  Due to its crazy over-built-ness and lack of high end jobs, and with rising gas prices.. its possible.  I may be wrong, and that is fine, but I will still be renting here for at least 2 more years, if I stay here that long.

if prices fall…but not TOO MUCH…then buyign now before it's harder to get 100% financing is a decent idea.

I think the answer lies in the statement…if in the future it is "harder" to get 100% financing, then I guarantee prices will fall "very much" as that will eliminate nearly all first time buyers. 

if 100% financing is totally gone…i could be in trouble.

I disagree, this would be a good thing for you and all of us, as prices will revert to the norm again.  100% financing in greatly responsible for the current situation  , RE being way overvalued.  You need to get away from this mentality.  Personally,I don't think its right to buy a home with 0 down. 

I'm a believer in savings, and responsibility.  2 very important values our country is leaving behind.

Also, cowboy made excellent post as well. 

[hipmatt]

As long as you can afford the expenses, you should be fine. If you can't hack a 30 year amortized, go for a 10 year interest only.

Horrible advice!

Remember that Harveston has high HOA and really high taxes along with the really small lots.  You will have to live with this for a long time if you go ahead and buy it.  At 350k you will be paying $7000k per year in taxes and another $1500 in hoa.  Thats over $700 per month even if the house was paid off.  I just think thats high because the last home I owned the taxes were $2200 per year and $35 hoa instead of $130.  I also rent in Harveston in Chatham, I do like the houses, but I wouldn't buy here  for the reasons listed plus the yuppie factor is really high here which I honestly don't care for.

Good luck, for $325k or less, it is a RELATIVELY really good price! 

[hipmatt]

Or you can try BJBIX.. it is a mutual fund.
http://rps.troweprice.com/Files/fundfacts/BJBIX.pdf?pn=104389&pnlc=2

[hipmatt]

Since our dollar is so damned weak against foreign currency, it makes a bit of sense for them to come over here and live like Kings.

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