[nestingcouple]

Hi sdcellar, thanks for pointing out the implications of the lease back opportunity. After thinking about it, this indeed seems to be a smart move for a builder in a down market. I guess the down side of doing so is the builder’s risk-avoidance image created by this offer on potential buyers.

[nestingcouple]

Hi sdcellar, thanks for pointing out the implications of the lease back opportunity. After thinking about it, this indeed seems to be a smart move for a builder in a down market. I guess the down side of doing so is the builder’s risk-avoidance image created by this offer on potential buyers.

[nestingcouple]

I think the sale price does not reflect the $20K or $15K lender mortgage incentives (depending on which house you buy).

[nestingcouple]

Hi 4Sbuyer2002, Thanks for sharing the real numbers for cost of ownership. For insurance, I was using 0.4%, which is $244 a month for the house I’m looking at. Is your insurance really as low as $65?
It’s clear to me your cost of ownership is much lower than comparable rent.

[nestingcouple]

Hi nla,
which communities have the two builders built in SD? Neither of the two has built or is building houses in 4S.

[nestingcouple]

Hi macabre, I do not think a $20K drop is realistic either. If we use the 2000 price, factoring 3% inflation which is about 23% appreciation, a housing selling at $520K for a 3277 sqrt (which one of my friend bought new) can be priced at $640K. If we think 2000 price is reasonable, I would be happy to buy using this pricing formula.

Hi macabre, how is your house quality? Is fieldstone is reputable one? One of my friend’s house was built in 2004, and their wall (other neighbors as well) had a big long crack, finally the builder fixed it.

[nestingcouple]

That’s a sharp observation. 829 is cheaper because it’s a corner house, facing two streets. But 825 and 797 are just across the street, looks exaclty the same lot size from the lot map, and yeah, it seems 797 lost about $16000 in a couple of weeks. I’m curious could the buyer negotiate with the builder to get some price deduction or ask the builder to throw in som upgrade/landscaping to make up the lose?

[nestingcouple]

797 was marked as sold, the price listed was $737,890. 798 was sold, the price was not listed in the latest pricelist.

[nestingcouple]

Hi ocrenter. Thanks a lot for the pricing information. I got the pricelist yesterday but it was dated 4/4. It’s going to release 4 new houses this sat and will only give price infor on this Sat.

[nestingcouple]

My observations on 4S ranch (and think why the traffic is much heavier than last 2 months):

— the builders are releasing much fewer units than they would have done in the past. Only about 8 units per builder per release, which artificially lower the suppler. It’s interesting to see whether the builder would make more profit by releasing more units with lower prices, or fewer houses with relatively higher prices;

— at this point of time, it’s hard to image that there are any flippers in the market buying. Therefore, I believe most of the buyers are in good financial shape to buy and ride out the possible down market. And most of these now buyers may have waited for quite a while, and decide not to wait any longer for various reasons: family, wife, quality of life, a good deal. There are a few quite neighbors in the luxury apartment community where I currently live just bought and moved out, one told me that the rental offices will require 2 months of rent penalty for breaking lease cause there are quite a few are breaking them and moving out because they bought.

— I computed the $ per square feet numbers, now $/sqrt of new houses in 4S reached the level in Jan 2004, which is about $218/sq ft, still much higher than that in 2002/2003, but way below 2005 (> $300/sqft).

personally I think if one can wait, there is no loss/risk in doing that, may get better deals near the end of this year since builders will give incentives near the end of a year for reporting reason (that’s what I told at the end of last year, correct this if it’s misleading because the builders were giving great incentives at the end of last year only because of the down market,not because of the time of the year).

[nestingcouple]

Hi bigmoneysalsa, what you said makes lots of sense to me. But many of us in the forum have been watching the NOD/Forecloure trend and discussing the ARM reset effects, isn’t the number of sold houses in 04/05 quite meaningful to the number of ARM resetting in this year and the coming years and possiblily future NODs? Won’t the reset and NODs speed up or even cause the price decline?

[nestingcouple]

hi sdrealtor, I was thinking that the percentage of the buyers in 04/05 who would be likely/eventually in trouble in the declining market would be much bigger than the percentage of the buyers bought before 03. What’s your opinion on this? Thanks.

[nestingcouple]

Yes. it’s. As SD Realtor and others have pointed out, we cannot deduct mello rose from income and HOA needs to be included as well.

[nestingcouple]

Hi ocrenter, I completely got your points! and you just explained what was puzzling me before. I’m so relieved that my wife is not going to push to buy this weekend, we’ll wait at least 4 months and we’ll invest the down payment to CD and mutual funds.

Wish every one on the forum a happy holiday!

[nestingcouple]

Hi SD Realtor,

We’d really appreciate if you can send the listings about 4S Ranch to my email [email protected].
Thanks for pointing out that we cannot deduct Mello Ross, and the HOA is $80/month, it was missed because the calculator does not have entries for them.
In the original calculation, the CD earning on 20% downpayment was indeeded included. With correction, it seems the difference between rent-buy would about $12K, not a determining factor by itself not to buy. The determining factor t boils down to how much depreciation we can see in next year.

[Author]

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