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Steve Beebo
ParticipantRenting for 10 years and saving lots of money sounds like a great idea, but I would guess that most people that rent aren’t putting money away, they’re renting because they aren’t able to buy. If someone is renting and saving the difference, though, more power to them.
When I’m 60 or 65 years old, I would rather live in my house that’s paid off than to be paying rent, or being in year #5 of my 30 year suicide loan.
ParticipantPS – Most people do end up paying 8% to sell their house, (6% commission plus another 2% in other costs) – If you did it in 4% – that’s great. If it is all working out for you, I’m honestly happy for you – I’m not doubting you. But not everyone timed it like you did by selling late in 2005.
If someone owns a condo that has already dropped by 20%, (some have, but not all), I think it’s too late to sell now. You might as well bite the bullet and hope for the best. And also, you have to admit that no one, even you, knows for sure what the market will be like in two years. All we can do is make our best educated guess and do what we think will work best for us.
About the stock market …. well, never mind.
ParticipantOr maybe, just maybe, Powayseller is wondering if by paying 8% in closing costs to sell their home, plus moving expenses twice, (at least twice – maybe more), plus the hassles of moving, and the loss of a tax advantage, that maybe they would have been better off by staying in their house, and continuing to pay down priciple on their loan, unless prices drop by a total of more than 12-15%, which may or may not happen. Also, resale prices on SFRs in Poway have not dropped by much at all up to this point.
Powayseller, I hope that things do work out for you – I think you will be able to tell when the market has bottomed out, whenever that is. But no one knows for sure how far prices will drop. There are too many variables, (strength or weakness of the national and local ecomomy, wars, long-term interest rates, inflation, etc.) But it could be a lot less than you predict.
We have indeed lost equity in our house in the last year, but I don’t care, because we’re not moving. I did cash out of two investment properties in the last two years, and paid the capital gains tax. If prices do drop by more than I think, it’s OK, because I have two daughters in their early to mid-20’s who may want to buy in the next three years or so – so it would be better for them.
sdrealtor – I wonder if you are talking crap about the market to your clients who are interested in buying. Let me guess – probably not. How can you let anyone buy if the future looks so bleak?
ParticipantNo one knows for sure how long the downturn will last. It could be 5 more years, but it could only be 1-2 years. Just because the last downturn lasted 5-6 years, and just because the run-up in prices was sharper this time, doesn’t necessarily mean that this time will be 5-6 years or longer.
Median resale prices have dropped 5-6% so far. There are a lot of people that think they won’t go lower, (which is wrong), and there are a lot of people that think they won’t drop more than another 3, 5, 7, or 10%. They may or may not be correct, but they still want to take advantage of today’s low mortgage rates and are buying as we speak. Not everyone wants to live in a rental for another 3-5 years.
My theory is, if you can afford to buy a home now with a 30 year fixed rate, and if you sincerely believe that you will be able to stay in the house or condo for 10 years or more, you really can’t go wrong by buying in the near future, start paying down your mortgage, posssibly improve your property, and in 20 or 30 years you can live with no house payment.
Who knows where mortgage rates will be in 2-5 years.
ParticipantEven though the market is soft or very soft in most areas, the median resale prices are only off 5% to 6% from the record highs last year. We’ve got a long way to drop to hit some of your predictions of 30-50% declines. Could it be that my prediction from last spring or summer that median prices would drop no more than 10-15% by the time the market bottoms out come true? You know, the prediction that I was battered, bruised, and abused for?
Don’t get me wrong, there is plenty of more bad news ahead for the market in San Diego. I did an appraisal in San Elijo Hills today and it is kind of shocking how much some homes have dropped in value. There are some houses that sold in 2004 for $850,000 that are only worth $700,000 or $725,000 now. So there are going to be lots of foreclosures in the next couple of years. There is one foreclosure on the market there, where the original purchase included a 100% loan, and the lender is going to lose $200,000+. The one good thing happening in San Elijo Hills is that the builders are really slowing down their production due to a lack of sales, instead of flooding the homes with excess inventory.
ParticipantLike anywhere, I’m sure that there are some nice areas in Amarillo, but I can’t think of a worse place to be off hand. For the same price you couldn’t you buy a house in somewhere like Victorville? That way you could at least get to the beach or to Las Vegas in three hours.
We were driving through Amarillo in the mid-90’s on a trip to the East Coast, and we hit the absolute worst thunderstorm I have ever seen in my life. There were lightning strikes literally every 5 seconds for an hour or more, and it rained harder than I ever dreamed possible. It pretty much seemed like the world was coming to an end. It rained so hard that we were on the freeway going 10 miles an hour and we couldn’t see anything, so we had to pull off the road and stay overnight near Amarillo.
I’m guessing they get some nasty dust storms, too, since the wind seems to blow about 70 mph 24/7.
ParticipantThis is a new house just off a golf course in a gated development, if it matters.
ParticipantThere is plenty of foreign migration to more than make up for the outflow to other states…of course, not all of the immigrants can afford to buy property.
The more that real estate prices in CA drop, though, the more people will come back to California from other states in the next 5-10 years.
ParticipantI don’t what kind of loan they are getting, or what their payment is – I’m just doing the appraisal. But for the property in Valley Center, the sale price is $660,000, with 20% down, so the loan amount is $528,000, and the estimated market rent is $2900 per month. At a 6% loan for 30 years, their payment alone would be $3300+. Real estate taxes add maybe $9,000 per year.
December 11, 2006 at 5:37 PM in reply to: recorded sale while property currently in MLS (Carmel Valley)?? #41473ParticipantI doubt if it was a real sale – most likely it was between relatives. The only way to get the true story would be to call the listing agent and ask.
The property sold from Pardee 12-05 for $1,031,500, then transferred 12-30-05 to another last name with no dollar amount, then resold 11-28-06, (with a pool, landscaping, etc.) for $1,425,000, with a 70% 1st and a 20% second from well known lenders. All of the buyers have middle eastern names, so I would guess it was not an arms-length transaction, since its’ still listed at 1.1M-1.4M.
ParticipantNationally, the real estate market must be close to bottoming out – Warren Buffet has bought 6.5 million shares of Lowe’s stock in the past three months, and he’s smarter than all of us put together.
Also, keep in mind two things:
1. They’re not making any more land, and
2. The weather is really good here in San Diego. 10 or 20 years ago, the weather here was not that much better than other areas, but now it’s quite pleasant almost every day.
Participantlendingbubbleco:
You’re right that the inventory level will jump between now until March, but the market isn’t completely dead.
According to Sandicor (MLS), there are 18,922 SFRs and condos on the market right now. Inventory typically does dip going toward the end of the year, but there were predictions on this board of 30,000 listings this fall – it didn’t happen.
There have been about 15,000 sales of SFRs and condos in the past 6 months, and there are 4600 in escrow right now – somebody’s buying.
If you want to see a dead market, check out the Phoenix area – with a similar population as San Diego County, they have an inventory iof 53,000 homes on the market.
Participantsdrealtor –
As I said, condo conversions and some newer tracts are doing the worst, due to current competition from other condo conversions / other new tracts. You posted mostly newer tract homes.
What you’re missing is the other 90% of the market – normal resale homes. Maybe you only work in newer areas, and do not have much experience in the broader market.
These are all resales in established areas:
4976 Marin Drive 92056
9-04 $550,000
9-06 $600,0004955 Marin Drive 92056
6-04 $569,000
5-06 $632,00013754 Bassmore Dr. 92129
1-06 $540,000
6-06 $592,0003930 Via Palo Verde Lago 91901
4-05 $830,000
5-06 $879,000617 Alameda Blvd. 92118
3-03 $1,010,000
5-06 $1,702,0005780 El Camino Del Norte 92067
8-04 $2,650,000
10-06 $2,850,000729 F Ave. 92118
10-03 $577,000
5-06 $815,0001150 J St. #314 92101
9-05 $367,000
5-06 $392,000429 9th Ave. #708
7-05 $284,000
8-06 $370,0001250 Florida St. 91932
6-04 $520,000
9-06 $575,00010448 Russell Rd. 91941
5-04 $925,000
11-06 $1,000,0002701 State St. 92103
10-03 $600,000
10-04 $738,000
8-06 $1,000,0001414 Torrance 92103
3-03 $630,000
8-06 $990,0003433 Albert St. 92103
9-04 $602,000
9-06 $869,000240 A Ave. 92118
4-03 $950,000
9-06 $1,350,000525 6th St. 92118
7-04 $1,050,000
9-06 $1,170,00010 Admiralty Cross 92118
7-05 $1,799,000
9-06 $1,950,00013929 Frame Rd. 92064
10-03 $366,000
10-06 $465,00013229 Tining 92064
8-03 $510,000
8-06 $680,00016503 Ave. Florencia 92064
8-03 $686,000
11-06 $766,0004515 Rhode Island 92116
2-04 $685,000
8-06 $847,0004173 Hilldale 92116
4-03 $730,000
11-06 $989,000I’m not trying to convince anyone that the market doesn’t suck right now, and that it won’t get at least a little worse, with an increasing number of foreclosures. But with inventory now at well below 20,000 in SD County, it’s not as bad as some portray. To say that prices are “most definitely and even a little below 2004 prices” is just plain idiotic.
Participant“In many cases we are back to late 2003 prices????”
sdrealtor – you are certifiably nuts.
There are some properties that are at their 2004 levels – mainly condo conversions and some newer tracts, but the great, great, great majority of properties in San Diego have values well above their sale prices in 2004.
I have recently seen some, (not a lot, but some), properties that are worth more today than they were in early to mid 2005. I have seen some properties that sold in early 2005, that have resold recently at higher prices. Granted, almost all areas are currently in at least a slight amount of decline, and nobody really knows how low they will go until the market stabilizes, but to make a blnaket statement that right now we are at 2004 prices is just plain incorrect.
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