[sdsundevil]

I knew these days were coming. Now, the question is how long it will take people to wake up to this fact. When it becomes cheaper to own than rent, you have hit bottom. Things may go a little lower, but they are constrained by rents.

Is anyone aware of any charts of home prices vs. rent. It would be interesting to see. I bought my first house in 1998 when it was clearly cheaper to own than rent (my PITI total for my 2BR/2BA was less than the rent on my 1 BR apartment). I’m not sure the situation is quite that good yet, but it’s getting there.

What I’m really trying to say is that when the economy comes back, housing is going to take off again, at least around here. We are headed towards another under-built situation like the late 90’s when you couldn’t find new houses because of the early 90s swoon.

[sdsundevil]

I knew these days were coming. Now, the question is how long it will take people to wake up to this fact. When it becomes cheaper to own than rent, you have hit bottom. Things may go a little lower, but they are constrained by rents.

Is anyone aware of any charts of home prices vs. rent. It would be interesting to see. I bought my first house in 1998 when it was clearly cheaper to own than rent (my PITI total for my 2BR/2BA was less than the rent on my 1 BR apartment). I’m not sure the situation is quite that good yet, but it’s getting there.

What I’m really trying to say is that when the economy comes back, housing is going to take off again, at least around here. We are headed towards another under-built situation like the late 90’s when you couldn’t find new houses because of the early 90s swoon.

[sdsundevil]

I knew these days were coming. Now, the question is how long it will take people to wake up to this fact. When it becomes cheaper to own than rent, you have hit bottom. Things may go a little lower, but they are constrained by rents.

Is anyone aware of any charts of home prices vs. rent. It would be interesting to see. I bought my first house in 1998 when it was clearly cheaper to own than rent (my PITI total for my 2BR/2BA was less than the rent on my 1 BR apartment). I’m not sure the situation is quite that good yet, but it’s getting there.

What I’m really trying to say is that when the economy comes back, housing is going to take off again, at least around here. We are headed towards another under-built situation like the late 90’s when you couldn’t find new houses because of the early 90s swoon.

[sdsundevil]

I knew these days were coming. Now, the question is how long it will take people to wake up to this fact. When it becomes cheaper to own than rent, you have hit bottom. Things may go a little lower, but they are constrained by rents.

Is anyone aware of any charts of home prices vs. rent. It would be interesting to see. I bought my first house in 1998 when it was clearly cheaper to own than rent (my PITI total for my 2BR/2BA was less than the rent on my 1 BR apartment). I’m not sure the situation is quite that good yet, but it’s getting there.

What I’m really trying to say is that when the economy comes back, housing is going to take off again, at least around here. We are headed towards another under-built situation like the late 90’s when you couldn’t find new houses because of the early 90s swoon.

[sdsundevil]

I knew these days were coming. Now, the question is how long it will take people to wake up to this fact. When it becomes cheaper to own than rent, you have hit bottom. Things may go a little lower, but they are constrained by rents.

Is anyone aware of any charts of home prices vs. rent. It would be interesting to see. I bought my first house in 1998 when it was clearly cheaper to own than rent (my PITI total for my 2BR/2BA was less than the rent on my 1 BR apartment). I’m not sure the situation is quite that good yet, but it’s getting there.

What I’m really trying to say is that when the economy comes back, housing is going to take off again, at least around here. We are headed towards another under-built situation like the late 90’s when you couldn’t find new houses because of the early 90s swoon.

[sdsundevil]

according to black people, nobody cares about black people.

[sdsundevil]

Hard to say whether they are “late to the party.” High-end real estate has a life of it’s own. They definitely aren’t catering to the masses here.

[sdsundevil]

Property taxes are roughly 3% in Texas. Traffic sucks worse than California and the terrain is mostly flat and boring. No state income tax is a plus though.

[sdsundevil]

OK, this seems like a made up post since it’s such a bad financial move. Sorry if that seems offensive.

First off, don’t forget about HOA dues on the condo. Condos almost always have higher dues than homes. Secondly, don’t forget about having to pay commission when you sell the condo on top of the likely loss in value it will sustain during the next few years.

Renting is far away the best move at this time. Next fall, the market should be teeming with foreclosures and close out specials from home-builders. Remember that home-builders have already made their money in a lot of these developments and can afford to give away houses just to be done and move on. I believe 4S ranch is a prime candidate for this type of activity as it has been under development for a few years.

As for mello-roos, they suck, but they also pay for infrastructure etc. that wouldn’t be there otherwise. 4S has a number of parks, nice wide streets, etc. Not saying I want to shell out for all of that, but it’s not like the money isn’t used by everyone.

Finally, if you do decide to buy a condo, I would go around low-balling the heck out of people trying to find the person who just wants out. Believe me, as the market worsens this fall (which is a virtual certainty) some people are going to push the panic button. As a buyer, now is the time to take advantage of that. Sellers had the upper hand for the past 10 years, and now the shoe’s on the other foot.

[sdsundevil]

I look at things in terms of rent vs. owning. When it becomes cheaper to own, the market booms, and vice versa. Right now, renting is by far the better move. Long-term, I still feel owning is the better move, but I understand that’s debatable. My point is that rents will keep increasing and houses will keep decreasing until it again becomes the better move to own. Someone with more free time than me can probably produce a graph to predict when this will be.

If houses dropped 50%, that would make the median house about $250K (just guessing at this number). I would also speculate median rent on a house to be roughly $2000/mo. For $2000, you can easily afford a $250K house (P & I @ 6.5% on 250K = $1580), so prices can’t drop that far. $2000/mo basically affords you a $315K house @ 6.5% INT, so I would look at that as the floor, and I think that’s too low, so basically prices can drop no more than about 35% using this theory.

It’s my feeling that the Fed will lower the prime rate, therefore resulting in lower overall interest rates, which will help all the ARM resets and also generate more home buying. It won’t solve everyone’s problems, but it should alleviate some of them.

[sdsundevil]

In 1996 …

.. you could easily buy a condo/house and beat rent. 2 BR/2 BA condos were around 100-120K. At 7%, PITI was less that the equivalent rent of $1000+. Of course, this was dependant on location, etc, but these were the numbers I looked at. On top of all of this, you were getting the interest deduction, so it was pretty much just plain silly to rent if you had down payment money, etc.

This phenomenon will happen again, but it may be 20 years from now. Rents will increase to catch up with the increased property values, and most people agree that property values are due for some sort of correction. It’s cyclical and simply the nature of things.

Renting seems to be the obvious correct choice in the short term right now. Just remember that your rent is 99.9% likely to increase every time you renew your lease. This is probably the peak time for renting due to the same low interest rates that made the current boom possible.

Unfortunately, now investors need to make higher payments if they are on an adjustable loan, so they will pass the costs on to their renters. Your rent may go up $50/month, and you’ll be forced to decide if that’s worth moving out over. The collapse in prices that many people like to predict on this board seems very unlikely. It may happen in certain areas, but it should be tempered as a whole. Areas that were desirable to live in will remain so, and outlying areas where people speculated will be hit the hardest.

[sdsundevil]

Energy prices are dropping …

and global warming will increase growing seasons in the midwest, etc. So in the long haul, inflation will come back to “normal.”

[sdsundevil]

Rents never go down …

… and they are not likely to level off any time soon. Additionally, any predictions that SD real estate will decrease by 50% are assinine since the rent vs. PITI curves will intersect before then making it a better choice to own than rent. This was essentially the case in the 1995-96 time frame. It was less expensive as a whole to own than rent, therefore a huge housing boom occurred.

Once prices start dropping (and it can be argued that they already have), the question is when to get in if you are waiting. What if you wait too long?

Rents never go down, while owning has relatively fixed costs (thanks to Prop 13’s cap on property taxes), so in the long haul owning is simply the right answer. I would have to agree that renting is the right move at this exact moment, but then you are stuck having to decide when the right moment is to buy. If you’re committed to a house/condo/etc, then just buy it and be done with it. In 20 years, it will be worth more than what you paid for it – probably significantly more.

[sdsundevil]

First off, insurance will be less than $100/month. We play less than that on our house. I believe all you need to insure for a condo is the interior as you don’t own the exterior. Probably depends on the condo layout, etc, but I would figure closer to $50/month and it may be even less than that. FYI, our insurance is through Farmers in case people want to see if they can do better.

Secondly, from what I know and truly believe, rents NEVER go down. I moved here is 1994 when the market was tanking and my rent went up every time I renewed my lease between 1995 and 1998. Eventually, it was just plain stupid to rent as I paid less each month to buy.

20% down tied up could be risky, but only in the short term. Meanwhile, positive cash flow seems to be within reach in the short-term. If the property is in a good location where it will have a high occupancy rate, there isn’t too much risk. If the numbers work, they work.

I agree that now is not a great time to be buying condos as they will most likely decrease fairly significantly in short term, but it really isn’t a bad deal if you are in for the long-term.

As for people predicting 40-50% depreciation in property values, I think you are crazy and have little justification besides correction to the mean. A correction to the mean doesn’t have to happen instantaneously and likely won’t. Probably spread out over the course of 5 years, which means maybe 20% or so is a reasonable amount to predict.

[sdsundevil]

You people on this website are really pretty funny. Compared to the last 3-5 years, any sales numbers are going to look terrible. How about comparing them to 1994? Bet they’ll look good then. The question really is what is normal. I think 30,000/year is probably normal based on what I know about San Diego Real Estate.

I’m not saying there’s not going to be a price correction of some sort, but I don’t think it’ll be as bad as most people on this website predict (and seem to want for some odd reason).

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