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sdcellar
Participantlindismith– Do they have graphs for what they predicted a year ago and how things turned out?
ParticipantAwesome generalization PC. Tell me you’ve never seen or heard of a couple (gay or straight) that treated the adoption of a child like the purchase of a new car or pet.
Thankfully, the ones I’ve witnessed didn’t go through with it.
ParticipantActually, what seems funny is the fact that both times it appraised for exactly what the sales price was. Probably just the practice, but such accuracy is dubious to the layman (like me).
If I were auditing appraisals, I’d look at the ones that came in right at sales price first. Of course, if that really meant anything, the practice would just change to come within some percentage of sales price and *not* hit the exact number.
ParticipantIt would be interesting to see how accurate their past predictions have been since they conduct this survey on a regular basis.
ParticipantBrilliant! Please tell me where to sign up for your newsletter. This is the kind of stuff I can really take action on.
ParticipantAnd I also agree that if you want to buy for purely personal reasons, that’s fine. Just be careful not to kid yourself that economics make sense when there stands a very good chance they don’t.
Another example– most people don’t buy condos as their long term residence, rather it’s typically a stepping stone to a bigger house down the road. Be careful to not let that stepping stone become an anchor. If one is fine in the knowledge that they may have to hold on to it for 10 years to escape without losses, then fine, but make sure you consider this possibility.
I agree about fundamentals and I just honestly don’t believe there’s much out there that can be purchased for about the same as rent. If somebody thinks differently… got MLS? And I promise I won’t snatch it away from you (although clearly if you’re concerned, don’t share as others may gladly swoop down on it)
ParticipantI’m confused, BubbleTracking has inventory at 20,380. His charts support the same rough peak number. What do you suppose causes the discrepency?
Also, is it normal for inventory to drop 18% in December? If not, then why do you think it’s going to drop that much this year?
ParticipantPrudent folks still make mistakes (and movielover sounds very prudent, I mean he’s here, right?). To be honest, I’m hard pressed to believe that there are places out there right now that can beat what you can find in the rental market.
And that’s without factoring in any possibility of further depreciation. If a $200K condo depreciates 3% a year, that’s $500 a month (but you won’t be throwing money down the drain on a rental, yippee!)
ParticipantYes, sounds like you’re making all the right considerations. The only other thing I’d keep in mind is that in the same way you’re worried about rents going up, the values of properties stand a good chance of continuing to go down, and even if you get a deal, the price could fall below what you paid in either nominal or real dollars over the next five years.
The best thing you can probably do is run a couple of reasonable scenarios based on the actual price of the property you’re interested in and just make sure you’re comfortable with the potential outcomes.
Participantnsr– Good advice and reasonable assumptions.
movielover– Just don’t forget to factor in how craptastic this $170-200K condo actually is. If it represents a lower standard of living than the $1200 rental, then you’re comparing apples to oranges.
ParticipantI know nothing of prices in any of those areas during the nineties, but one thing that probably does throw off price per square foot for areas like Poway and Lakeside is the diversity in properties. You have very small to very large lots, horse properties, view lots, not view lots, and I don’t know what else.
Certainly, there are diverse properties in OB/Point Loma, just not as diverse.
Enough of a difference to explain the metrics? I have no idea.
ParticipantAlso, it’s interesting that it’s common for people to think that renting is throwing money down the drain, but how is that any different than throwing money away on an interest-only loan? It’s no different in a flat or declining market when there’s a premium to be paid for the privilege of “ownership”, it’s even worse.
As far as tax breaks are concerned, don’t forget that additional expense of property tax and HOA fees (and the latter tends to run higher for condos).
ParticipantYeah, but if it’ll get the little rugrats to shut up for a while, it’s worth it!
Just kidding! I have few rugrats myself and I’d much rather play outside with them. Then again, maybe it’s just because I ain’t so good at videogames.
ParticipantWell, you’ve said that several times and it’s been countered with the opinion that they’re not, but I’d have to say most of it’s anecdotal (with my opinion being they’re not going up, at least not significantly).
The only anecdote I’d say that doesn’t count are the rental examples where some home debtor is trying to pass along his exhorbitant mortgage. I’ve seen several of these listings, but they linger and linger, so no, most people don’t seem willing to pay for someone elses mortgage mistake.
Oh, and I totally agree with Perry Chase as well.
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