[ocrenter]

[quote=sdrealtor]ocr,
I cant resist as this is quite a departure from your prior position to “demand 1999 nominal pricing”. My times have changed.[/quote]

I said 2000 nominal or 1997 inflation adjusted.

what is quite interesting is if you adjust 2000 nominal pricing with the interest rate difference, even without using that income adjustment, you get a good adjustment as well.

for example, using the same example earlier purchased at $450k. we get $1800/month mortgage payment. but if we use nominal 2000 price of $290k but at 7.5% interest rate, we end up with $1620/month mortgage payment. slightly overshooting but very close to payment that most would consider a reasonable purchase price that is at rental cost.

one key issue ultimately is we had dramatic government intervention, including the exceptional interest rate, which helped prop up home prices. therefore, pre-government-intervention predictions need to be adjusted, either with Rich’s 50% income adjustment or the interest rate adjustment or combination of both. logically the combination does sound like the best approach imho.

BMIT was always a product of pragmatic fluid approach to the constantly changing market environment, the pricing prediction was never meant to stay as a permanent matrix. in fact, I did mention as well that the nominal 2000 pricing approach would only work for a short time period, with inflation adjusted pricing approach being more of a long term approach. as I mentioned with my earlier post, I very much am open to better approaches and do find Rich’s income adjustment a lot more.

[ocrenter]

[quote=sdrealtor]ocr,
I cant resist as this is quite a departure from your prior position to “demand 1999 nominal pricing”. My times have changed.[/quote]

I said 2000 nominal or 1997 inflation adjusted.

what is quite interesting is if you adjust 2000 nominal pricing with the interest rate difference, even without using that income adjustment, you get a good adjustment as well.

for example, using the same example earlier purchased at $450k. we get $1800/month mortgage payment. but if we use nominal 2000 price of $290k but at 7.5% interest rate, we end up with $1620/month mortgage payment. slightly overshooting but very close to payment that most would consider a reasonable purchase price that is at rental cost.

one key issue ultimately is we had dramatic government intervention, including the exceptional interest rate, which helped prop up home prices. therefore, pre-government-intervention predictions need to be adjusted, either with Rich’s 50% income adjustment or the interest rate adjustment or combination of both. logically the combination does sound like the best approach imho.

BMIT was always a product of pragmatic fluid approach to the constantly changing market environment, the pricing prediction was never meant to stay as a permanent matrix. in fact, I did mention as well that the nominal 2000 pricing approach would only work for a short time period, with inflation adjusted pricing approach being more of a long term approach. as I mentioned with my earlier post, I very much am open to better approaches and do find Rich’s income adjustment a lot more.

[ocrenter]

[quote]- housing prices were reasonable (broadly, with less post bubble dispersion) in 1999
– according to SANDAG, median household income has risen about 50% since 1999
– therefore, one way to gauge reasonableness is to see if a home is priced approx. 50% over its 1999-era price

This btw is the ocrenter method… he always targeted a move back to prices in a certain year. So since I think highly of him it’s probably a solid approach… I wanted to throw it out there if anyone had additional thoughts. (And maybe easy tricks for adjusting to prices in different years, eg 01). [/quote]

Thank you for the kind words Rich. you of course articulated it much better than I. I also love the 50% adjustment per income as well. I tried using inflation adjustment in the past but I think income adjustment makes a lot more sense.

It is always nice to have a real life example, so I went to sdlookup and picked a middle of the road example.

11976 Caminito Ryone
San Diego, CA 92128
1815 sqft SFR built in 1987
–2/2011 sold for $450k. a very reasonable sales price that yields a $1800/month mortgage payment at 20% down and 4.5% interest rate. I think a similar house on the rental market should yield at least $2000/month.

here’s are two comparable homes with the same floorplans sold in 1999 and 2000 in the same complex:

11899 Caminito Ryone
–8/2000 sold for $290k

15836 Caminito Cercado
–2/1999 sold for $253k

so per the 50% + 1999 pricing formula Caminito Ryone would be a more appropriate purchase at $380k. (interestingly 50% + 2000 pricing would yield $435k, much closer to the actual sale price)

what is the SANDAG median income % increase from 2000 to 2011? I wonder if that % + 2000 pricing might be more appropriate.

I was thinking of another spin to this. adding the interest rate adjustment to the 50% + 1999/2000 pricing.

so typical interest rate was 7.5% in 1999/2000. monthly mortgage for 50% + 1999 at 7.5% would yield a payment of $2122/mo. whereas 50% + 2000 at 7.5% would yield a payment of $2433/mo.

applying the interest rate adjustment to both the 1999/2000 scenarios would make 11976 Caminito Ryone’s purchase price (assuming the buyer got the 4.5% interest rate) a fantastic deal.

I think we are getting close to an actual formula that one could potentially just plug in! your thoughts?

[ocrenter]

[quote]- housing prices were reasonable (broadly, with less post bubble dispersion) in 1999
– according to SANDAG, median household income has risen about 50% since 1999
– therefore, one way to gauge reasonableness is to see if a home is priced approx. 50% over its 1999-era price

This btw is the ocrenter method… he always targeted a move back to prices in a certain year. So since I think highly of him it’s probably a solid approach… I wanted to throw it out there if anyone had additional thoughts. (And maybe easy tricks for adjusting to prices in different years, eg 01). [/quote]

Thank you for the kind words Rich. you of course articulated it much better than I. I also love the 50% adjustment per income as well. I tried using inflation adjustment in the past but I think income adjustment makes a lot more sense.

It is always nice to have a real life example, so I went to sdlookup and picked a middle of the road example.

11976 Caminito Ryone
San Diego, CA 92128
1815 sqft SFR built in 1987
–2/2011 sold for $450k. a very reasonable sales price that yields a $1800/month mortgage payment at 20% down and 4.5% interest rate. I think a similar house on the rental market should yield at least $2000/month.

here’s are two comparable homes with the same floorplans sold in 1999 and 2000 in the same complex:

11899 Caminito Ryone
–8/2000 sold for $290k

15836 Caminito Cercado
–2/1999 sold for $253k

so per the 50% + 1999 pricing formula Caminito Ryone would be a more appropriate purchase at $380k. (interestingly 50% + 2000 pricing would yield $435k, much closer to the actual sale price)

what is the SANDAG median income % increase from 2000 to 2011? I wonder if that % + 2000 pricing might be more appropriate.

I was thinking of another spin to this. adding the interest rate adjustment to the 50% + 1999/2000 pricing.

so typical interest rate was 7.5% in 1999/2000. monthly mortgage for 50% + 1999 at 7.5% would yield a payment of $2122/mo. whereas 50% + 2000 at 7.5% would yield a payment of $2433/mo.

applying the interest rate adjustment to both the 1999/2000 scenarios would make 11976 Caminito Ryone’s purchase price (assuming the buyer got the 4.5% interest rate) a fantastic deal.

I think we are getting close to an actual formula that one could potentially just plug in! your thoughts?

[ocrenter]

[quote]- housing prices were reasonable (broadly, with less post bubble dispersion) in 1999
– according to SANDAG, median household income has risen about 50% since 1999
– therefore, one way to gauge reasonableness is to see if a home is priced approx. 50% over its 1999-era price

This btw is the ocrenter method… he always targeted a move back to prices in a certain year. So since I think highly of him it’s probably a solid approach… I wanted to throw it out there if anyone had additional thoughts. (And maybe easy tricks for adjusting to prices in different years, eg 01). [/quote]

Thank you for the kind words Rich. you of course articulated it much better than I. I also love the 50% adjustment per income as well. I tried using inflation adjustment in the past but I think income adjustment makes a lot more sense.

It is always nice to have a real life example, so I went to sdlookup and picked a middle of the road example.

11976 Caminito Ryone
San Diego, CA 92128
1815 sqft SFR built in 1987
–2/2011 sold for $450k. a very reasonable sales price that yields a $1800/month mortgage payment at 20% down and 4.5% interest rate. I think a similar house on the rental market should yield at least $2000/month.

here’s are two comparable homes with the same floorplans sold in 1999 and 2000 in the same complex:

11899 Caminito Ryone
–8/2000 sold for $290k

15836 Caminito Cercado
–2/1999 sold for $253k

so per the 50% + 1999 pricing formula Caminito Ryone would be a more appropriate purchase at $380k. (interestingly 50% + 2000 pricing would yield $435k, much closer to the actual sale price)

what is the SANDAG median income % increase from 2000 to 2011? I wonder if that % + 2000 pricing might be more appropriate.

I was thinking of another spin to this. adding the interest rate adjustment to the 50% + 1999/2000 pricing.

so typical interest rate was 7.5% in 1999/2000. monthly mortgage for 50% + 1999 at 7.5% would yield a payment of $2122/mo. whereas 50% + 2000 at 7.5% would yield a payment of $2433/mo.

applying the interest rate adjustment to both the 1999/2000 scenarios would make 11976 Caminito Ryone’s purchase price (assuming the buyer got the 4.5% interest rate) a fantastic deal.

I think we are getting close to an actual formula that one could potentially just plug in! your thoughts?

[ocrenter]

[quote]- housing prices were reasonable (broadly, with less post bubble dispersion) in 1999
– according to SANDAG, median household income has risen about 50% since 1999
– therefore, one way to gauge reasonableness is to see if a home is priced approx. 50% over its 1999-era price

This btw is the ocrenter method… he always targeted a move back to prices in a certain year. So since I think highly of him it’s probably a solid approach… I wanted to throw it out there if anyone had additional thoughts. (And maybe easy tricks for adjusting to prices in different years, eg 01). [/quote]

Thank you for the kind words Rich. you of course articulated it much better than I. I also love the 50% adjustment per income as well. I tried using inflation adjustment in the past but I think income adjustment makes a lot more sense.

It is always nice to have a real life example, so I went to sdlookup and picked a middle of the road example.

11976 Caminito Ryone
San Diego, CA 92128
1815 sqft SFR built in 1987
–2/2011 sold for $450k. a very reasonable sales price that yields a $1800/month mortgage payment at 20% down and 4.5% interest rate. I think a similar house on the rental market should yield at least $2000/month.

here’s are two comparable homes with the same floorplans sold in 1999 and 2000 in the same complex:

11899 Caminito Ryone
–8/2000 sold for $290k

15836 Caminito Cercado
–2/1999 sold for $253k

so per the 50% + 1999 pricing formula Caminito Ryone would be a more appropriate purchase at $380k. (interestingly 50% + 2000 pricing would yield $435k, much closer to the actual sale price)

what is the SANDAG median income % increase from 2000 to 2011? I wonder if that % + 2000 pricing might be more appropriate.

I was thinking of another spin to this. adding the interest rate adjustment to the 50% + 1999/2000 pricing.

so typical interest rate was 7.5% in 1999/2000. monthly mortgage for 50% + 1999 at 7.5% would yield a payment of $2122/mo. whereas 50% + 2000 at 7.5% would yield a payment of $2433/mo.

applying the interest rate adjustment to both the 1999/2000 scenarios would make 11976 Caminito Ryone’s purchase price (assuming the buyer got the 4.5% interest rate) a fantastic deal.

I think we are getting close to an actual formula that one could potentially just plug in! your thoughts?

[ocrenter]

[quote]- housing prices were reasonable (broadly, with less post bubble dispersion) in 1999
– according to SANDAG, median household income has risen about 50% since 1999
– therefore, one way to gauge reasonableness is to see if a home is priced approx. 50% over its 1999-era price

This btw is the ocrenter method… he always targeted a move back to prices in a certain year. So since I think highly of him it’s probably a solid approach… I wanted to throw it out there if anyone had additional thoughts. (And maybe easy tricks for adjusting to prices in different years, eg 01). [/quote]

Thank you for the kind words Rich. you of course articulated it much better than I. I also love the 50% adjustment per income as well. I tried using inflation adjustment in the past but I think income adjustment makes a lot more sense.

It is always nice to have a real life example, so I went to sdlookup and picked a middle of the road example.

11976 Caminito Ryone
San Diego, CA 92128
1815 sqft SFR built in 1987
–2/2011 sold for $450k. a very reasonable sales price that yields a $1800/month mortgage payment at 20% down and 4.5% interest rate. I think a similar house on the rental market should yield at least $2000/month.

here’s are two comparable homes with the same floorplans sold in 1999 and 2000 in the same complex:

11899 Caminito Ryone
–8/2000 sold for $290k

15836 Caminito Cercado
–2/1999 sold for $253k

so per the 50% + 1999 pricing formula Caminito Ryone would be a more appropriate purchase at $380k. (interestingly 50% + 2000 pricing would yield $435k, much closer to the actual sale price)

what is the SANDAG median income % increase from 2000 to 2011? I wonder if that % + 2000 pricing might be more appropriate.

I was thinking of another spin to this. adding the interest rate adjustment to the 50% + 1999/2000 pricing.

so typical interest rate was 7.5% in 1999/2000. monthly mortgage for 50% + 1999 at 7.5% would yield a payment of $2122/mo. whereas 50% + 2000 at 7.5% would yield a payment of $2433/mo.

applying the interest rate adjustment to both the 1999/2000 scenarios would make 11976 Caminito Ryone’s purchase price (assuming the buyer got the 4.5% interest rate) a fantastic deal.

I think we are getting close to an actual formula that one could potentially just plug in! your thoughts?

[ocrenter]

[quote=sdrealtor]Thats funny OCR, I used to live there also. In 1996 I rented a condo at 18674 caminito cantlena before they were converted to condos. Our unit was far away from the freeway and had no noise at all but some do sit right on the freeway. maybe we passe deach other I used to walk my dog every night and walk loops around the complex as well.[/quote]

think we missed each other by about a decade. =)

vista del lago is a nice community. but for avid walkers, it really got old quick. we started to feel like we were hamsters after a few months.

[ocrenter]

[quote=sdrealtor]Thats funny OCR, I used to live there also. In 1996 I rented a condo at 18674 caminito cantlena before they were converted to condos. Our unit was far away from the freeway and had no noise at all but some do sit right on the freeway. maybe we passe deach other I used to walk my dog every night and walk loops around the complex as well.[/quote]

think we missed each other by about a decade. =)

vista del lago is a nice community. but for avid walkers, it really got old quick. we started to feel like we were hamsters after a few months.

[ocrenter]

[quote=sdrealtor]Thats funny OCR, I used to live there also. In 1996 I rented a condo at 18674 caminito cantlena before they were converted to condos. Our unit was far away from the freeway and had no noise at all but some do sit right on the freeway. maybe we passe deach other I used to walk my dog every night and walk loops around the complex as well.[/quote]

think we missed each other by about a decade. =)

vista del lago is a nice community. but for avid walkers, it really got old quick. we started to feel like we were hamsters after a few months.

[ocrenter]

[quote=sdrealtor]Thats funny OCR, I used to live there also. In 1996 I rented a condo at 18674 caminito cantlena before they were converted to condos. Our unit was far away from the freeway and had no noise at all but some do sit right on the freeway. maybe we passe deach other I used to walk my dog every night and walk loops around the complex as well.[/quote]

think we missed each other by about a decade. =)

vista del lago is a nice community. but for avid walkers, it really got old quick. we started to feel like we were hamsters after a few months.

[ocrenter]

[quote=sdrealtor]Thats funny OCR, I used to live there also. In 1996 I rented a condo at 18674 caminito cantlena before they were converted to condos. Our unit was far away from the freeway and had no noise at all but some do sit right on the freeway. maybe we passe deach other I used to walk my dog every night and walk loops around the complex as well.[/quote]

think we missed each other by about a decade. =)

vista del lago is a nice community. but for avid walkers, it really got old quick. we started to feel like we were hamsters after a few months.

[ocrenter]

know the vista del lago complex on the foothill of battle mountain pretty well as we did live there in the past. Caminito Cantilena homes are on the freeway side. Caminito Pasadero are on the Pomerado side. Some of the Caminito Cantilena homes are really bad in that they get noise from Pomerado AND I-15!! On the other hand, there are some Caminito Pasadero that are quite insulated with at least a few rows of homes buffering Pomerado noise.

we use to walk loops around the complex at night and the difference is quite stunning.

here’s an example of a few sales:

18950 Caminito Cantilena 1861 sqft
–5/2010: $512k

18771 Caminito Pasadero 1869 sqft
–3/2010: $531k

18791 Caminito Pasadero 1800 sqft
–7/2010: $500k

doesn’t seem like the noise really make that much of a price difference. unless the Cantilena house was really upgraded. even if there is a price difference, I doubt it will ever make up for the noise. bottom line, try to avoid the freeway noise as much as possible.

[ocrenter]

know the vista del lago complex on the foothill of battle mountain pretty well as we did live there in the past. Caminito Cantilena homes are on the freeway side. Caminito Pasadero are on the Pomerado side. Some of the Caminito Cantilena homes are really bad in that they get noise from Pomerado AND I-15!! On the other hand, there are some Caminito Pasadero that are quite insulated with at least a few rows of homes buffering Pomerado noise.

we use to walk loops around the complex at night and the difference is quite stunning.

here’s an example of a few sales:

18950 Caminito Cantilena 1861 sqft
–5/2010: $512k

18771 Caminito Pasadero 1869 sqft
–3/2010: $531k

18791 Caminito Pasadero 1800 sqft
–7/2010: $500k

doesn’t seem like the noise really make that much of a price difference. unless the Cantilena house was really upgraded. even if there is a price difference, I doubt it will ever make up for the noise. bottom line, try to avoid the freeway noise as much as possible.

[ocrenter]

know the vista del lago complex on the foothill of battle mountain pretty well as we did live there in the past. Caminito Cantilena homes are on the freeway side. Caminito Pasadero are on the Pomerado side. Some of the Caminito Cantilena homes are really bad in that they get noise from Pomerado AND I-15!! On the other hand, there are some Caminito Pasadero that are quite insulated with at least a few rows of homes buffering Pomerado noise.

we use to walk loops around the complex at night and the difference is quite stunning.

here’s an example of a few sales:

18950 Caminito Cantilena 1861 sqft
–5/2010: $512k

18771 Caminito Pasadero 1869 sqft
–3/2010: $531k

18791 Caminito Pasadero 1800 sqft
–7/2010: $500k

doesn’t seem like the noise really make that much of a price difference. unless the Cantilena house was really upgraded. even if there is a price difference, I doubt it will ever make up for the noise. bottom line, try to avoid the freeway noise as much as possible.

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