patrick.net

By human instinct, no one will ever disclose to the world they made a big mistake.

This is Feb 3rd, 2011.
Traditionally not many people buying home in Jan and lot of them are still busy painting/reparing the house. It's just little too soon to ask a question like that, IMO.

I think "buying" implies a planned purchase in the near future.

My own next purchase won;t be until it's time to have a kid. And I don't even know what country I'll be in when that happens.

(Checking out condos and co-ops in NYC... not cheap!)

Bought a REO sfh home in South Puget Sound area. 3b/2bath/1990 sq ft for 194k. Closed on 1/24/11.

robertoaribas says

I can kill potatoes with my bear hands already!

lol

@seaside

I think so, but I hope to keep this post going throughout the year

APOCALYPSEFUCK says

Most everyone is either walking away from them or burning them, the smart ones, anyway.
Early days in the death spiral yet and it takes a while for some folks to catch on.
If you care about your own survival and that of your family, learn to kill with your bare hands and plant potatoes.

U from Idaho?

I just bought a house. Closed on Feb1. Moving stuff in already. "Happy" ? I wouldnt call it happy but objectively speaking I did get a good deal for what I was looking for and I think in the near future will see a return. The return will be the rent on my current house is slightly more than the mortgage and the rent is definately on the low side so I see a rent increase as perfectly feasible and reasonable for the market. My immediate return will be knowing my mortgage is locked in slightly below a "low" rent. My long term return will be watching my cat climb the wall to attack my dog. Not something you can do in most rentals ! BTW, I am not knocking renting, in fact I seriously pondered continuing to rent and having the house as a rental but it is not me so I am moving in

I'm thinking about it. (new here, long time lurker) I'm in Concord and something in between 200-250 is in my price range. Some stuff has come up. I'm hoping that more will be coming up in the future, but everyone keeps saying this is as good as it will get. I don't know what to think, sometimes. : P

robertoaribas says

closing on another 1 next week… 3/2 condo with 2 car garage… will rent it out.

I've read and heard many times that condos aren't a good investment, and that it is better for individual investors to stick with SFH. In your experience, do you think there's some truth to that, or too broad of a generalization?

I'm buying a couple of rental properties in the next couple months in south Texas.

Never buying, period! Being debt free=freedom.

Truth is, you're either a slave to rent or a slave to property taxes. No matter how debt free you are.

I have been waiting for a few years, and recently (I finally bought shortsale) a property. I needed due to increase in famaly size. I leave in DC, the previous owner paid about $1 million, I paid about $600k. I hope I made a reasonable deal on this one.

joshuatrio says

Truth is, you’re either a slave to rent or a slave to property taxes. No matter how debt free you are.

True dat. In my case, property taxes. I have inherited a rental property. I plan to live here as long as I can drag myself up and down the stairs, but no more car loans, no cc debt, woohoo!

robertoaribas says

closing on another 1 next week… 3/2 condo with 2 car garage… will rent it out.

Robertoa,
Do you have a 1,5, and 10 year plan?

Mr.Fantastic says

joshuatrio says

Truth is, you’re either a slave to rent or a slave to property taxes. No matter how debt free you are.

Yup, but I’d rather deal with California property taxes. When I bought my home, it was a much different time. The young couples buying in the past decade are the true slaves.

My father bought our property back in 1963...much different time indeed. Luckily, it's paid off and we have great tenants that stay for years...sometimes even decades!

robertoaribas says

closing on another 1 next week… 3/2 condo with 2 car garage… will rent it out.

What are your HOAs? I can't find a single condo in the LA area that's worthwhile.. with HOAS under $400 a month. In that situation you might as well just continue renting... My first apartment back in 2002 that I shared with some roommates cost me less per month! And those fees will keep rising.. I'm betting by the end of a 30 year mortgage.. your might be paying $1500 a month in HOA Fees!!! So whoopdie do.. the condo is "payed off" but I'm still paying $1500 for the "pool maintenance".. haha.. what a scam!

I'll keep renting and buy a single family home....

fille says

I have been waiting for a few years, and recently (I finally bought shortsale) a property. I needed due to increase in famaly size. I leave in DC, the previous owner paid about $1 million, I paid about $600k. I hope I made a reasonable deal on this one.

I am also in DC area looking for reasonable deal.
Do you mind telling me where in DC you bought?
Don't worry I am not gonna go there and snooping arround or something, unless you invite me. :-)

Buying a home, preferbly SFH, in 2011 was my original plan. I thought local housing market would hit its bottom here in DC metro area, specifically in fairfax county, at the end of 2010 or early 2011. I am wrong about it and my plan is being postponed. I've been waiting long enough, I don't mind waiting little longer. It doesn't matter.

When I think about housing market in last few years, 2008 was chaotic, 2009 was interesting, 2010 was... well... extremely boring, I mean, in the west of potomac river. All I can see back in 2009 was crappy homes in crappy area, and now, ziprealty is sending me whole bunch of listings with better homes in better area... at still bloated price, mostly over 500K range. It is like, housing market is booming. It remind me of last April when the tax credit is about to expire. The funny thing when I dig information little further, I found large portion those homes are bought in last year, being flipped, and being put in the market with 100~150K mark-up. Some of them are bought in 2007 and being on the market at the price they bought. I was like, good luck with that price, pal. Are they finally unloading their stuff or what? Is the correction that happens in the west is finally taking place here in the east? I can't tell yet, but I have this feeling that year 2011 is gonna be interesting.

seaside says

I thought local housing market would hit its bottom here in DC metro area, specifically in fairfax county, at the end of 2010 or early 2011. I am wrong about it and my plan is being postponed. I’ve been waiting long enough, I don’t mind waiting little longer. It doesn’t matter.

In process, and still correcting...

Roberto - what are your hoa fees on them? Condo's seem to have easy cash-flow positive potential.

Did you pay cash for these units, or finance them? Sounds like you're doing well.

We are looking to purchase in 2011... trying to patient and wait for a good deal and a good fit... preschool age child + stable job situation mean that we are likely to be in our next home for 15-20 years.

Portland is still overvalued (from a price/rent ratio) though, so patience is crucial right now. I'm not part of the doomsday crowd but I want to protect our family from what happened to a lot of poeple who bought in 2005-2007 (and we know people across the Southwest who are in a world of hurt right now, so we are a little gun shy).

Some say prices of homes are rising again in the Bay Area...Lol!

I want to buy this year. There are a few signs that make it seem pretty worthwhile.

1. The prices in the neighborhood I am looking at are pretty much around the price to rent (including HOAs, PMI, Property Taxes)
2. One building I really like seems to have a few short sales and foreclosures in the pipeline. 4 new units on the market in the past 2 weeks. 4 more in pre-foreclosure state on the tracking sites right now.
3. Current renters in the area are looking to buy (evidenced at the open houses)

My big problem is I am still saving for a down payment. The list prices seem to have fallen by 10-15% over the past few months -- so it looks to be right in my target. I hope this trend continues until I have my down payment together. ;)

Plan to buy by the end of the year. I think ratio is fine and it will be a good investment/place to live.

jaded says

My big problem is I am still saving for a down payment. The list prices seem to have fallen by 10-15% over the past few months — so it looks to be right in my target. I hope this trend continues until I have my down payment together.

This is better than it was for me in 2000-2002, when I came back from Japan.

I was saving for a down payment too, but prices in 2000-20001 were rising faster than I could save! Seriously -- what was a $300,000 place in 2000 became $400,000 in 2001 -- requiring $20,000 more down payment! WTF!

Then IIRC around 2002 they started innovating in 90/10 mortgages which helped me since the bay area was too high for FHA. But by then the dotcom bubble was dead and I decided renting was the better deal.

American in Japan says

Some say prices of homes are rising again in the Bay Area…Lol!

actually they are. spring season is starting early this year.

I want to but what's up with San Diego real estate? Anybody following have insight/ predictions? It seems to be one of the few cities showing slight increases when it clearly needs to be decresing to fall back to reality...starting to really piss me off actually.

Thoughts?

Professor Piggington (sorry) shows that San Diego has historically maintained high average home prices relative to average incomes.

http://piggington.com/shambling_towards_affordability_yearend_2010_edition

Ratios of over 7 have been the norm...

American in Japan says

Professor Pigginton (sorry) shows that San Diego has historically maintained high average home prices relative to average incomes.
http://piggington.com/shambling_towards_affordability_yearend_2010_edition
Ratios of over 7 have been the norm…

Yes, up to 1990. Than the income dried up, decline in the Aerospace industry, sending prices downwards for the next 7 years. Prices declined even though Mrt. rates also declined. Pigginton does a very good job looking back at historical trends and providing some excellent analysis. His is correct providing you do find a "reasonable" priced home.

I appreciate the responses about San Diego. One metric I often use is sales price pre-2000 and then compounding 3% yearly- what I believe to be normal house appreciation. It still always comes up way off what the sellers are asking. I guess Piggington's point is that monthly price is low but not necessarily sales price. Ugh, stupid sunny San Diego.

Yes, I will definitely buy a house in the San Diego area towards the end of this year. I've been waiting the past 6 years for prices to go down. MANY of the houses we are looking at in the area are down 25% to 30% from peak prices. I think prices can fall a bit more but I also think San Diego will always be a more desirable areas. I've noticed lately more price reductions and a few of the houses we are looking at that are in "pre short sale" the banks (1st and 2nd) have both approved short sales. One we looked at the buyer made a lower offer and either didn't get qualified or backed out.

We're hoping prices continue to fall this year before we buy. I know there are a lot of bears on this board but our situation is a bit different. We definitely know we will stay in the home for the long haul. We have 2 small kids and don't want to move around in rentals. We're in it for the long haul so we are looking at larger 5 bedroom homes in nice areas. Homes are still pricey there even with the price drops. Most of the houses we are looking at are over $1 million still.

With Patrick's buy/no buy formula it's about a 6.5 which is borderline but rentals are around $6,000 - $7,000+ per month for a rental in a high end home that size. Property taxes in that area for that size home is mostly around $13,000 - $18,000 per year and Mello Roos fees in some of those areas is as high as $500 per month. Still even accounting for those high fees, we're going to stay in the home until our kids are finished with high school. So for us it's not an investment but to live in and we won't move around.

I've looked at tons of cities around the USA but for us we really love everything that San Diego has to offer including fabulous weather, great beaches, great schools (we're looking at the La Jolla, Del Mar, Carmel Valley areas) and beautiful homes. About the only negative factor I can think of is the cost of housing. But not too many other negative things about the city besides the higher cost of living that I can see. The job market, like the rest of California pretty much sucks but I'm not sure if I'll go work for a company. So it might be a moot point.

bubblesburst says

I’ve looked at tons of cities around the USA but for us we really love everything that San Diego has to offer including fabulous weather, great beaches, great schools (we’re looking at the La Jolla, Del Mar, Carmel Valley areas) and beautiful homes.

LOL! have fun. Just remember many didnt pay for the Sun and Beach Tax, so be sure to avoid that.

Los Angeles Times - Los Angeles, Calif.
Subjects: Shutdowns, Pacific, Layoffs, Corporate reorganization, Aerospace industry
Author: Vartabedian, Ralph
Date: Jul 01, 1992
Start Page: 1
Text Word Count: 993

Unemployment in county soars to 9-year high | 42,000 jobs lost in last 2 years
[1,2,3,4,5 Edition]

The San Diego Union - Tribune - San Diego, Calif.
Author: TERRY SACKS
Date: Aug 1, 1992
Start Page: A.1
Section: NEWS
Text Word Count: 563

Abstract (Document Summary)
The last time the county rate topped 8 percent was in 1983, in the aftermath of the deep recession of 1981-1982. Though the area's jobless rate hasn't reached the 10 percent level of that earlier slump, the current recession is far worse in terms of job losses.

Since the start of the U.S. recession in June 1990, San Diego County has shed 42,200 jobs, with declines in construction, manufacturing and retail trade accounting for 85 percent of the losses, according to EDD figures.

Max Schetter, general manager and director of the Economic Research Bureau at the Greater San Diego Chamber of Commerce, had expected the recession to bottom out by midyear. But the California and San Diego economies are lagging behind even the snail's pace of the U.S. recovery.

---------------------------

Hughes to Close 92 Facilities, Lay Off 9,000

Hughes Aircraft will lay off 9,000 workers over the next 18 months, close 92 company facilities and take a $1.2-billion charge against profits as key elements of a restructuring to improve its competitiveness and adapt to lower defense spending, company Chairman C. Michael Armstrong announced Tuesday. About two-thirds of the layoffs will be in Southern California, roughly proportional to the company's employment here. The Los Angeles-based aerospace firm will emerge from the cutbacks with 15% fewer workers than its current 60,300. (excerpt)

---------------------------

Jobless Rate Reaches 8.1% in S.D. County

Los Angeles Times (pre-1997 Fulltext) - Los Angeles, Calif.
Author: CHRIS KRAUL
Date: Aug 1, 1992

Among economists, there was little optimism that the employment decline will reverse itself soon. David G. Hensley, director of the UCLA Business Forecasting Project, said San Diego in particular and the statewide economy as a whole are still "declining" based on key economic indicators such as housing starts, auto sales, construction employment and retail sales.

Raford Boddy, professor of economics and coordinator of San Diego State University's Center for Public Economics Forecasting Project, said San Diego's current economic problems resemble those of the two-year recession beginning in 1973 when local unemployment topped 10%. Then, as now, a downturn in the business cycle coincided with deep military budget cuts, a double whammy for San Diego's defense-reliant economy.

San Diego County has lost 4.5% of its jobs over the past two years. California has lost 600,000 jobs since 1990. Hensley said 175,000 of those lost jobs were in construction, and 90,000 were in aerospace.

Just wanted to update you all- we were preapproved for an insane amount, something we would never saddle ourselves with. I think the industry is up to it's old shenanigans and again, I don't see how this could be indicative of a price correction. But nevertheless, we looked at our first house in 3.5 years and may put an offer on it- for no more than Patrick's calculator though (82% of the asking price) so wish us luck!

Hmmmm...best to buy by this April if you plan to buy at all before next winter?

Will the seasonal effect override other effects? Summer sees price increases all other things considered...

I just put in an offer this week. Apparently there are multiple offers so we'll see how it goes.

Yes, good luck. We put in an offer ABOVE asking price on a foreclosure and were beat out by one of 7 all cash investors so yea...

jessica says

Yes, good luck. We put in an offer ABOVE asking price on a foreclosure and were beat out by one of 7 all cash investors so yea…

Nothing worse than being outbid. by that time you're already mentally moved in and picking out the drapes.
My usual strategy is to not use a buyer's agent. Go directly to the listing agent and present your offer.
We'll see if that works again.

I just went under contract. I've been looking for over a year for a place that's close to my kids. There are not a lot of rentals and prices have remained stubbornly high (local economy is good). I finally found an REO in pretty good shape:

Newtown, CT
3Br/2Ba
2200SF
1 acre
$287500
Taxes = $7300

20% down, 5.125%APR, $3500 back from bank (reverse points) towards closing costs
annual rent/price = $24000/$287500 = 8.4%
Price/income = $287500/$160000 = 1.80
5+ years expected residency

I'm currently renting a 1Br cottage and my PITI will be only $850/month more. I'm satisfied.