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no_such_reality
ParticipantLook at the comparables on Zillow.
It’s a race to the bottom from the high in May 2006.
The same size and beds/baths 2158 sq ft 4/2.5 sold then for $630. One street over. Since then:
8/22/06 – 3/2.5 50 2095 sq ft at $581 (couple doors down on same steet)
8/7/06 – 4/2.5 2038 sq ft $535K ( 1/2 mile away)
8/29/06 – 4/2.5 1878 sq ft $495 (1/2 mile away)
10/24/06 – 4/3 2296 sq ft $545K (1/2 mile away)
Looks like last sale on the house was $585K in June ’04.
ParticipantPrudential link
ParticipantWhile I dispise red light runners, I dispise the cameras even more.
Fight it and verify the specs are all certified and up to date. I’ve read so many articles where the cameras have been found to be incorrectly set and the city has no idea how long they’ve been that way and basically need to recind months worth of tickets.
If the fine was a real $300, it would be a little more palletable, but in San Diego and many places, the enforcement of the cameras are outsourced to for profit businesses that get a cut.
ParticipantI believe the problem with Coffee Drinkers was covered quite nicely in March 1939.
I turn to the Kaffeetanten article often these days because the rhethoric in our political arena is so close it seems that you could merely substitute a word or two and the underlying theme remains the same.
ParticipantYou may want to clarify if you’re talking dafault = NOD or default = foreclosure.
As for how many, it’ll be interesting, of the interest only ARM segment, I think she’s probably right. Of the rest, she’s way off. Now, I know SD has about 80% ARM ratio in the last year or two, but it’s not clear how many are suicide loans.
From the Bank side, have a feeling the they will get creative with holding back on the actual NODs. I foresee refinancing to 40 years… A reroll to another interest only ARM with sub-prime interest rate pushing out the devil’s due another 3 years. Allowing the banks to restrucutre their responsibility on default.
ParticipantActually, I did ask either, since I think the odds of each one jumping that much to be low.
To breakeven by buying, I need both to occur. Since either one not occuring means renting comes out pretty heavily on top, I asked either.
Bad writing on my part, but essentially I was saying what are the odds of both occuring let alone either one of the two actually jumping that much in the next five years.
I think my teachers warned me about those double negatives.
To win by buying, both housing and rents need to jump dramatically (4% a year on housing & 10% a year on rents)
I don’t think either one of those two will jump that much over the five year.
ParticipantThe eloan calculator is one of the better ones.
Their default settings though significantly favor housing. Still, it’s highly useful to show that housing appreciation is the only thing that makes owning worthwhile at this point.
With their base settings, my current rental says I’m better off buying ($575,000, 6%, 20% down) with $21K in savings over 7 years. Adjusting my tax rate up to 40% marginal, it get’s even better, $32K.
However, if I correct some assumptions for SoCal, first rent with rent appreciation of 5% (was 2.5%) for worst case, I get savings of $46K. (Actually I think rent will stay flat, but I’ll do that at the end.)
However when I correct the housing and investment rates it changes dramatically:
If housing slows to 2.5% appreciation, essentially on par with inflation. The savings from buying disappears for a $22K loss. Even if rents increase 5% a year, I hold for 7 years, if the house only appreciates another 19%, I lose $22K compared to renting.
If I hold a shorter 5 years, naturally, I do worse, $32K loss.
If change my savings rate to 10% from 8%, I would lose $52K by buying over seven years.
If rents appreciate slower, say the default 2.5% and housing is 2.5% annual appreciation, I would lose $36K by buying with a 8% ROI on savings and $66K with a 10% ROI on savings.
If housing actually goes flat near term, maintaining nominal current prices for 5 years, it gets really bad even with 5% annual rent increases, with a $103K loss from buying. (Over a mere five years, that’s $20,000 a year)
If housing slightly corrects over the next 5 years with a 2% loss annually (~10% total nominal loss over five years) and rents increase at 5%, I’d lose $155K to $180K at 8% and 10% savings ROI.
Finally, my last scenario, rental crunch, 10% annual rent increases, 2.5% appreciation on housing, add HOA fees, and a 10% savings ROI with 40% tax bracket for 5 years…
I still save $50,000 by renting.
Even using a mere 8% savings rate, I still come out saving by renting.
When it’s all said an done, I break even by buying the townhouse I rent if in the next five years, the townhouse goes from $575K to $700K and my rent goes from $1950 to $2850.
Anybody care to put odds on either one of those two requirements happening?
ParticipantWithout the prospect of capital gains through appreciation, as an investment, it won’t make sense until it gets to the $300,000 range. That’s at 6%, 20% down, 1% tax, 1% maintenance & mgmt expense, that generates about a 5% return with positive cash flow and a 10% return if you can carry the depreciation loss forward against your personal income (wages).
For living in, the $350K number looks about right. However, that add in costs are typically over look by would be owners.
ParticipantAsia, the numbers get close, the only problem is the price and payments still require about $110,000 worth of income to keep you PITI payments to the 30% of gross range.
Essentially, the numbers are just getting to were the top end of income can “afford” the bottom end of the housing market.
The other gotcha on rents is rents will need to hold their current run up, with empty units returning to the market, that’ll get harder.
ParticipantI’m an old fashioned conservative. I think churches should be stripped of their tax free exemption and treated as a corporation under corporate law for tax purposes.
I also think that donations to a church should not be tax deductible unless like other charities, they demostrate how much of their funds go to charitible programs and thus qualify as a tax deductible charity.
As for civil unions or marriages between consenting adults, I don’t care.
ParticipantInteresting history, I wonder what happened to the people or person that bought in 1994. It seems a little odd that from ’89 to ’94 basically held it’s price with a mere 2% nominal reduction. All told, it’s less than a 10% nominal drop.
November 20, 2006 at 7:29 PM in reply to: With this weather and a winning team, SD prices will never go down….. #40390ParticipantWell, I think the realtors are feeling the squeeze. Many have very few if any sales this year. And that means their income is down pretty dramatically compared to 2005, 2004 and 2003.
ParticipantIf you have a locked loan rate for 30 years at or below 6%, then you numbers are very close. The HOA rate may be a deal breaker, but if it is under $300, the numbers get close.
Currently, you have $1200 out of pocket to live.
If you buy at $200K, you have ~$1200/mortgage, $200/mnth property taxes and $300/mnth HOA for ~$1700 out of pocket. You get a little kick back on taxes, but lose your standard deduction, which you’re probably close on with State tax anyway.
At the current rental rate, after taxes, it’ll still cost you about $200 more per month to own if you buy at $200,000.
UTC has a large number of condo conversion on the market, similar to downtown, the big question is ‘are the rents going to hold’. Currently they’re running up, but there are significant numbers of units on the side lines.
If the units that are offline come back, I suspect we will see more of what we saw in ’93-’96 range where “rent” is $1200/month, however you get last month free with 12 month lease and/or half of the move in month etc. That way, the complex can maintain the higher price on renewal, still report $1200 as average rent even when your effective rent is only $1000. The drawback as a renter, you have to negotiate or move to get those rates. Often, larger complexes will churn you instead of refreshing an incentive.
If you could pick the condo up for $170/180K you may be good. If the HOA is closer to $200 and not $300, then $180/190K works if you’ll live their long enough and rents hold.
ParticipantThek, Long Beach gets more shipping flotsam because of the ports. The OC beaches, from Seal Beach south, have litter that is primary lasy people waste. Storm drain run off and cigarette butts. You’re also not seeing the small waste and only seeing the big waste. There’s been plenty of times I’ve come out of the water and the waste is lined up higher, but coming from the water, the butts are imbedded inthe sand like a giant area run.
I’d have to imaging her and hubby are pretty heavy smokers in their condo. For the smell to be permeating through charcoal filters, the walls and everything else, they must have a chronic cloud in their condo.
I noticed the smoker complained about a person barbecuing as her slippery slope argument. I always find it funny they think a nuisance is any smell they don’t like and not the chronic continuous smell they create day after day. Like living next to a landfill.
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