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PerryChase: Fantastic!

bgates: Iraq is a catastrophe. Why do I believe this? Just because the media told me so? No, because I’ve heard it first hand from people I know who’ve been there, who are there, and who will be there again. Even the ones who most staunchly stand by our decision to be there will admit that it’s not a pretty picture.

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Right on, sdrealtor and VCJim. Isn’t forgetting that one’s home is just that- one’s home- and not a ticket to instant wealth and fame what’s gotten so many people in trouble?

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PS, it was a large financial services firm – same company, same job, but more clients (and more offices) in OC therefore more need for me.
I ended up in SD with a small financial consulting firm (which I have since left) – we did a lot of business development in OC because, as I remember, there were more public and large private companies. I tried to dig up some of my old research but I don’t think I’ve kept any of it.

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There’s been an odd increase in police activity in Cardiff over the past week, at least judging by cop cars and sirens. Looks like even NC is going to hell.

On a serious note, my impression is that there are more opportunities in Orange County (no experience with Ventura). When I moved here, I was offered more money by the same company to move to OC over SD (didn’t take it- I was obsessed with the idea of living in SD- everyone wants to live here I guess). When I was looking for jobs, it seemed that OC had more available. I’ve known people to give up looking for a job in SD and then find one easily in OC. Just antecdotal, of course, and these would be mostly entry- to mid- level financial positions in the consumer products/financial services sectors.

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Per US Census Bureau Quick Facts, 2003 Median Household Income: San Diego $48,634, Orange $55,861, Ventura $57,864, meaning OC and VC are 14.9% and 19.0% above SD, respectively.

Interestingly, the Census’ American Community Survey shows an increase in inflation-adjusted median household income between 2003 and 2004 for SD and OC of .1% (from $50,611 to $51,012) and 5% (from $61,329 to $64,416), respectively (Ventura not given).

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Diego, I agree with you 100%. There’s no way someone like me is priced out of the market forever – I mean really, in the long run, who the heck else is going to buy a one-bedroom condo other than someone like me, or an investor who will be expecting cash flow? It’s just really sad to see the way that some otherwise intelligent people my age have bought into the “it’s now or never” hysteria. And the tax deduction thing is a pet peeve of mine – my friend, a fellow CPA none the less, just bought an extremely overpriced home because they “needed the tax deduction.” Obviously, your incremental tax deduction increase due to your mortgage interest should play into your rent vs. buy analysis, but you never spend money just for the sake of a tax deduction.

Sorry this is such a delayed response – I was out enjoying my weekend being a suicide-loan-free kid.

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PS,

Haven’t run the numbers to agree fully with your final argument, but you bring up a crucial point:

“If…you have a mortgage that you can afford”

And I would add, that should mean – afford without going into credit card debt to buy groceries and gas, afford without counting on an annual pay raise, afford if you were to face a financial setback (temporary job loss, illness, etc.).

I find it hard to buy into the idea that as a professional in my mid- (ok, late-)twenties, high income for my age bracket, stable profession, virtually no debt, I am priced out of the housing market forever (and I am priced out, and have been for a while, no matter what a mortgage broker would say). It just doesn’t make sense.

I’ve watched too many of my peers get in over their heads in the past few years. Dealing with the headache of having (and finding!) multiple roommates so that they could make their mortgage payment. Sacraficing all the fun stuff, or going into crazy debt to avoid the sacrafice, all for home “ownership” (or in some cases, because they’re convinced they need the tax break, but that’s another rant).

Of course, everyone has different situations, different priorities, and I haven’t always made the best decisions either, but I must say it’s pretty nice that I’m living comfortably, watching my savings build, and I haven’t had to eat Ramen Noodles since college.

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Has anyone seen the commercial telling retirees that their path to a carefree life is taking out an interest only mortgage on their home? It makes me cringe everytime I see it. To be honest, I haven’t really considered any reasons that it might make sense to do this (only if you’re paying credit card interest at a higher rate, or can invest the $ at a higher rate of return than the interest rate, right?), but it seems pretty shady to me. Even if the house was paid off long ago, and the mortgage that they take out is a fraction of the home’s current “value”, there is still the real possibility of an unhappy ending. Not to mention the fact that this is a demographic that’s constantly taken advantage of.

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I worked with a Prudential realtor when I toyed around (very briefly) with the idea of buying a couple of years ago, and her explanation was that the market moves so fast that to list something at a specific price did not take into account the day to day market fluctuation.

I think the real reason is to get buyers to see more properties. A buyer that decides he/she can afford $500-550k will be shown a house with a $549k-$600k “value range” (same goes for someone looking for $600k-650k). If low end buyer falls in love with the house, he/she can be convinced that the increase in their monthly payment will be negligable if they go ahead and bid above their “affordability”.

(Yes, I’ve experienced this tactic).

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Raleigh or Chapel Hill, NC. Would I buy? Absolutely. Based on employment growth, median income, income to home price ratios, etc., no reason to believe housing is severely inflated there. I wouldn’t be worried about riding out any slight dip in the market since I would be investing in a long-term family home. Lots of great things about the area.

(Note: I’m using the assumption that I have a family and I’m interested in living mortgage-free. In reality, I’m young, childless, and not ready to settle down.)

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I am an addict. Add my boyfriend to the list of SOs who would fully agree with that statement.

A note on differing opinions:

The value of any data analysis is dependent on two things: a) the quality of the underlying data (garbage in, garbage out, as they say), and b) the relevence and accuracy the way you analyze this data, including your underlying assumptions. Both a & b are subject to examination and debate.

I love the different viewpoints on this board as they allow me to evaluate and refine my own arguments and analysis by offering alternative explanations, interpretations, and methods. I like the vibe here too – everyone’s usually respectful, analytical, non-emotional.

And yes, it’s a lot healthier than watching “So You Think You Can Dance”.

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JES, you are correct in my opinion – examaning behavioral elements, such as herd mentality, of market movement is critical. (I do think that a certain amount of this is shown in historical price movement because I mostly subscribe to the efficient market theory, but that’s another topic).

I’d argue that speculation is nothing new. An excerpt from “The Next Little Dollar” by Mike Davis, the first section from the book Under the Perfect Sun: The San
Diego Tourists Never See (interesting read):

“Although there were no industries and few farms to support the increase, San Diego (population 2,637 in 1880) had swelled to more than 40,000 residents by the winter of 1887. The city’s boom economy seemingly consisted of speculators selling land to other speculators . Four hundred realtors were busy subdividing enough lots for the
population of one million that some zealots were predicting for San Diego by 1900… Like the cloud city of Laputa in Gulliver’s Travels, San Diego defied the laws of economic gravity… Then, in 1888, the boom abruptly collapsed, and San Diego’s inflated land values came crashing back to earth… (As one ruined speculator supposedly told a local paper: “I had a million dollars wiped out in the crash, and
what’s worse, $500 of it was in cash.”)”

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Thanks, PerryChase. I just wanted to make sure I wasn’t overlooking something.

Funny, when I saw #2, I said out loud, “What are they smoking???”

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This post sparked my interest in taking a look at these complexes…

Hard knocks in Villa Vincenza:
MLS #: 068035634
listed $240,000 – 274,876
originally $359,900
listed 4/30/06
paid $328,000 11/29/05

However, nearby, someone hasn’t gotten the message that flipping is pas mode:
MLS #: 066059469
listed: $489,000
paid $422,000 6/9/06

Does anyone know of any reasons why example 1 might not be as bad as it seems, or the seller in example 2 might not be living on another planet?

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Link to San Diego County Largest Employers (looks like it’s from 2004 so may be a little outdated – but a starting point):

http://www.sddt.com/Databases/BusinessListings/ListCompanies.cfm?BusinessCategory_ID=205

A sample:

United States Navy, San Diego 42,000-35,000 military, 7,000, civilian
Federal Government 38,700
State of California 37,100
University of California, San Diego 24,790
San Diego Unified School District 21,073
City of San Diego 20,700
County of San Diego 18,900
Sharp HealthCare 13,269
United States Postal Service 11,611
Scripps Health 10,313
Kaiser Foundation Hospital 7,386
Qualcomm Inc. 6,000
San Diego Community College District 5,600
Sempra Energy 5,500
Science Applications International Corp. (SAIC) 4,667

It doesn’t matter where a company is headquartered – the majority of their employees could be somewhere else (this is the case with the large public company that I work for – our corporate office is here, with a small number of employees, just because our CEO wants to be here). For example, based on this info, almost half of Callaway’s employees are elsewhere, 75% of Qualcomm, only 10% of SAIC employees are here.

By the way, I’ve been lurking here for over a year, but I’ve decided to chime in a bit more lately. I guess the activity has picked up so much that I felt I had to jump in. Cool to see the growth over the past year.

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