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sdcellar
ParticipantRegarding 3BR/2BA homes in the $250-$300K range, you could absolutely buy something like that in 2001 and it wasn’t in the ‘hood. In 1997, a property like that probably could have been had for $200K tops.
The issue is clearly what’s being defined as the the ‘hood and I think some might be extending it to anything outside of North County coastal.
ParticipantAhh, makes sense. Thanks sdr.
ParticipantInteresting that it closed above listing price. Anybody got a little bit more insight into that?
ParticipantPart of the confusion regarding how “nice” Del Cerro is within this thread might be related to the fact that this property is in Allied Gardens. Del Cerro is everything south of Navajo. There’s also “Princess” Del Cerro in between the two, but that’s still not as nice.
Allied Gardens still feeds pretty good schools (Patrick Henry HS), but definitely cheaper and smaller than Del Cerro. $700K is definitely a bit out of whack for the area.
ParticipantI missed the part about buying down the loan. Sorry about that. I’ll stick by my $2200 number for a $650K property as I see listings for that kind of thing pretty regularly in the Scripps/Poway/RB/4S areas. I’ll definitely admit that the pet thing is a challenge however.
Again though, you must have been a bit nervous at the thought of putting so much money down on a place in this market.
Participantand, oh yeah, 5.5% for an interest rate seems pretty low too. Bump that to a more realistic (for today) 6.5% and the rent to buy ratio improves to 75%.
Factor in locking up $250K and the (highly likely) possibility of further price declines eating away at that principle, you gotta ask yourself…
ParticipantOkay, in SDR’s case I come up with the following numbers showing that renting is 85% of the cost of buying and I was being *generous* on the buy side of the equation. That is, the tax deduction for the buy side ignores the standard deduction already allowed; and the rent side takes a full marginal rate hit and only expects a conservative 4% return (and further reduced through use of simple interest calculation)
House: $650,000
Down: $250,000
Loan: $400,000
Int Rate: 5.5%
P&I: $2,271
Taxes: $596
Ins: $100
PITI: $2,967
Fed: 28%
State: 7%
Benefit: $850
Effective: $2,117Rent: $2,200
Ins: $25
R&I $2,225
Int Rate: 4%
Earnings: $833
Taxes: $292
Return: $542
Effective: $1,683ParticipantSDR– Don’t really want to pry too much, but you offered.
I’m trying to make sense of your numbers, but just can’t. Perhaps the $2,200/mo for the loan reflects tax benefits, just the interest, or a low interest rate, but from your tax figure (assuming no mello-roos), I’m guessing the purchase price of the home to be around $650,000. I must have something wrong…
I love these rent vs. buy questions. Every time I run the numbers, it’s a no brainer. Rent baby, rent!
Participant500 of those square feet appear to be in a craptastic add-on family room… It was still a good size before this was added, but the net effect actually lowers value in my (and I would think most people’s) opinion.
ParticipantAhh, makes sense. I’d check with the Crosby folks to make sure, but I believe it’s supposed to be cooperative agreement between The Crosby and Avaron to allow those homeowners to get through, but keep the riff-raff (like me!) out.
ParticipantIs this intentional?
You can bet that it is.
I believe they actually are going to connect, but they’ll be behind a gated community (Avaron at Del Sur), so it won’t help Joe Blow 4S/Del Sur.
ParticipantYes, the 100 year mortgages are especially humorous because the only real next step is an interest-only loan and that will put an additional five bucks a month into your pocket. Yippee!
And oh wait, a bunch of people have those already, so a 40-year would be a step backwards (at least to the available cash challenged). Yessiree, 40-year mortgages will stop this thing!
Participanthousingbear– No nerves struck here either. Your post just struck me as pennywise and pound foolish. You seem pretty sharp on all of this otherwise.
ParticipantYou say you can afford it, but you’re worried about what are mostly incidentals? I’ll admit that things like landscaping can be expensive, but if that’s an issue for you, why are you looking at $1.1 million dollar homes? You say you can afford it, but sure doesn’t “sound” like it…
No offense as I’m sure you’re a nice person, but step back and think what you’re asking (and read what you wrote). If these are your concerns, at least drop your price range a few hundred kilobucks.
And your first home purchase no less? Most people don’t start at a million-plus.
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