[kicksavedave]

Man, if I had bought that dump for $575K, I’d walk away from it also. I wonder who/what put their signature on that contract in 04? Did they actually expect that toilet to eventually fetch $700K after it’s repairs?

[kicksavedave]

Does anyone have any opinions about this site:

http://www.housingpredictor.com/california.html

Seems they offer a mixed bag of expectations across the country – some areas expected to continue strong growth, others they predict double digit declines in pricing – San Diego, LA, SF, Miami, Boston, etc. Each state gets its own predictions by major city.

Thoughts, opinions?

[kicksavedave]

Juice, thanks for the feedback. I would be making the same salary, my wife is a Nurse and she is subject to a pay decrease if she moved to another city… that offsets some of the COL savings we might find. If we saved $1K a month on housing but she makes $10K less per year, is it worth it? Not likely. It’s a complicated decision, nothing we will arrive at quickly.

We will be sitting on the sidelines no matter where we end up. Timing the bottom here in San Diego is my first choice, but that’s no sure thing either. As I mentioned, the “bottom” could be that todays prices stagnate for 5 to 10 years. I wish my crystal ball were less muddy 🙂

[kicksavedave]

BTW, the decision on where to live is a lot more than “a few bucks”.

Over 30 years, the difference between $400K houses at 4.9% vs 9.3% is over $4.2 Million bucks. Its the difference between retiring well, and scraping to get by.

[kicksavedave]

“Past performance is no guarantee of future results.”

This concept is not lost on me one bit, I am fully aware of all the factors that go into the future economics of this whole thing, so many factors that cannot be “guessed” at. I’m also fully aware how critical timing is on this…. but to me, timing is MOST critical in a volitile market (Cali is volitile)- buy at a peak (2005) and you’re going to need most of those 30 years to make up for the loss. Buy at a valley (1997) and you’re going to blow away the markets as a whole (300%??). Whereas in a stable, slowly appreciating commodity(Georgia?), your timing becomes less critical – 3 to 4% ever year, doesn’t matter so much when you jump in. Could things change? Of course, but you have to start somehwere.

I agree that you choose a city first, then find a home. If all other things were even close to equal, San Diego would be the only choice. But as it stands right now, I’m fairly sure we cannot afford to buy anything remotely acceptible in this area, unless prices come down 33%. For $300K here, you can’t buy anything to raise a family in a neighborhood I can live in. For $500K your options are still very limited. When those $600K places start selling for $400K, they’ll be in my ballpark. I won’t do a suicide loan just to squeeze into something I want, I’ve seen first hand the carnage that creates. I can wait it out, but not forever. I’m almost 40 and don’t have much savings, I need to get this one right, and I don’t have a ton of time to make it up if I botch this decision.

Some people think that 33% is possible, some say more, some say less. Who knows. Who can even accurately say HOW it will happen – one big dump over two or three years, or 15 years of pricing stagnation? We all have to make our predictions and cast our lot. I’m just looking for accurate data to help me run the options. Thanks to everyone who has responded already… the discussion is invaluable to me. 🙂

[kicksavedave]

Or you could just… set a strict monthly budget, stick to it, and send all your excess to the mortgage company with each paycheck… how would this be any different?

It seems some people need to have handcuffs on to save money. Like my wife, who prefers to let the IRS sit on her money and give her zero interest, so she can get a nice fat return in April. I ask her “Why not you keep the money each month, do something productive with it, and turn April 14th into a non event?” She says “I’d just spend it on something”

??? huh?

Anyway, how is sending all your excess to the lender any different than depositing your whole paycheck, and taking back from them what you need each month? I’d rather have the control myself.

[kicksavedave]

Ranjan, you can try this for Open Houses, at least in San Diego

http://www.openhousessandiego.com/

Can’t vouch for it’s accuracy, only its existence 🙂

[kicksavedave]

I heard a recent article on NPR that talked about the enormous investment in alternative fuels taking place. A good chunk of the money that had been pouring into the high tech sector in the decade from about 93 to 03, has moved into alternative fuels.

There is a patent on a car engine that burns hay, invented by some engineers in farmland. Their biggest concern for mass production is how to distribute the fuel to drivers.

Currently there is also in existence right now, a car that runs on water. It used the H in H2O, and it’s only emission is water, which drips from the tailpipe. It’s MPG on water is multiples ahead of fossil fuel engines. Refueling is as simple as pouring an 8oz bottle of water into a spout inside the cabin – you could travel across the country without ever exiting the car. Water is available anywhere. It’s patent owner is in talks with the major manufacturers to mass produce it, but that’s a way off in the future.

According to the article, there are no less than 20 different continuously reproducable fuels being tested for automobile engines, with various patents on some. Mass production and availability to the public is a ways off, but they should be here in time for when the last drop of oil is pumped from the ground. Obviously the closer we get to outrageous (unmanagable) oil prices, the more the emphasis on alternative fuels will grow. Gas-Electic Hybrids already crowd the streets and that trent will continuue. Future automobiles will most likely be “Water-Electic Hybrids” or some thing similar.

The main point is, we’re already addressing a solution to the impending oil crunch, and it won’t be bicycles. We’ll still have our monsterous SUVs, you just might have to shovel a bail of hay into them to get to the mall:)

[kicksavedave]

I second the idea of looking at Carlsbad, Encinitas, Carmel Valley, etc. Also, LaCosta is a nice area in between Carlsbad and Encinitas…. you may pay some HOA’s, but generally low compared to an $800K mortgage (~$100/Mo HOAs, not too bad). Good schools, good safe areas.

LaCosta and Encinitas will give you very easy access to the 5, which gets you to Pendelton and Miramar easily… MCRD is 30-35 minutes from LaCosta. Trust me, you would much rather commute to CP, Miramar or MCRD from the 5, than from the 15… not even close how much of a difference that commute is.

Here’s one place in Encinitas in your ball park with a low HOA and no Mello Roos.

http://www.ziprealty.com/buy_a_home/logged_in/search/home_detail.jsp?listing_num=061059152&mls=mls_sandiego&source=SANDICOR&propertyType=SFR

Good luck, Semper Fi

[kicksavedave]

BTW, getting back to the original thesis here, it’s not the engineers of the tech boom that did the driving, it’s the tech sales of the boom that pushed prices up.

I’m an engineer, I make around $85K, and unless I wanted to do one of those insane IO loans or crazy arms, I’ve been locked out of everything around here. There are plenty of engineers who I work with in the same boat, none of them are stupid enough to over extend themselves so badly, so we’ve all been sitting and watching what appeared to be the boat sailing away. (hoping it is making a U-turn and comes back for us)

But there are plenty of sales reps who make twice what we do, who’ve been flipping, upgrading, moving and shaking, over the past 5 years. The ratio of reps to engineers is about 5-1 in my office of about 30 total people.

My experience may be unique or different than most tech companies…. but I’ve watched first hand that any engineer who isn’t already in a home, is locked out unless they want to do a stupid loan. Meanwhile the reps have been making a killing on their real estate investments, with some of them doing multiple transactions over the last 4 years.

[kicksavedave]

I have a question for the experts here.

It seems obvious that a mid to lower income family, on a very tight budget, who got an ARM at the height of the frenzy and is barely able to make their $1100 mtg payment, would be in serious risk of default if the payment went up to $1500 or $1600. The family making $45K, with 3 kids, and limited potential for increasing their income – sure, they seem to be at risk when their ARM resets. They don’t have $500 in disposable income, entertainment budget, or other areas where they can simply cut back on and make up that new difference. There may not be any less affordable housing in their area. They have very few options.

But here in SoCal, especially in San Diego, the typical ARM, the typical new homeowner, seems more likely to be the ones making $70K to $100K, who’s payment is more like $2700… when their payment jumps to $3300 or $3500, it doesn’t strike me all that realistic that they will default based on that difference. They will either suck up the difference out of their discretionairy budget, trade in the Lexus SUV lease for a Toyota, or move down from that 4BR in Carmel Valley to a 3 BR in Escondido. They have plenty of options.

Basically, that whole ARM default tidal wave that we may or may not be facing, appears to me to be centralized in lower income, lower housing price areas… in other words, not here in SD county…. (maybe in Florida, Kansas, Pennsylvania, etc) I find it hard to believe that a whole lot of folks in their $750K new constructions in areas like SD central, coastal and inland and North County, will just have to walk away from them. Will people who make ~$12K a month default en masse because their ARM went from $2.5K to $3.5K or even $4K, ? I can’t see it.

Tell me why I am wrong?

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