Housing Prices (San Diego, Oceanside: fit in, apartments, foreclosures)
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Hi I was reading a previous thread and it got me thinking.... I know that this is everyones 'opinion' but how many people think that the housing market is going to continue to decline? I have no idea, and when I look at what's selling, then at what the property previously sold for I'm astounded at how far it has come down, and wonder how it could go down any further. I'd just like to get people's opinions on this just out of sheer interest.
Thanks
I believe we are getting near to the end of declining prices. In my opinion over the next 12-18 months prices may drop another 5% or less for single family homes in the more established coastal zone communities (0-15 miles from the coast). Areas further inland where so much of the new building has occurred in recent years may have further to go, as may downtown condos.
Interest rates are low, and rental rates for apartments are starting to rise faster than the rate of inflation. Both of these bode well for an end to the housing decline. However, none of this means that prices will begin rising again in the near term. They will rise eventually; My guess is starting about 2012.
If you have reasons to buy now, such as housing assistance from an employer or a desperate need for a tax deduction, (you're paying 35% federal and 9.3% CA) and you plan to stay for the long haul, now is actually not a horrible time to buy. The bulk of the housing price deflation has already occurred. However, it's not a great time to buy either as the value of your home 4 years from now will probably be the same as it is now.
My husband and I are debating this one right now. We bought in 2004 in Oceanside, thinking that we had bought our "forever" house, and then he lost his job and we ended up selling it when we moved out of state. Kicking myself 100 times over because we debated selling vs renting, but we never really thought we would end up back in the area. Now, we are moving back but this time we are going to rent, at least for a year. I don't think that you can truly get a sense for a market unless you are living in it, and I do believe that there is still a god chance that prices will drop. Maybe not a significant percentage, but it's still a lot of money when you're looking at a half a million dollar+ house.
We were also considering moving to Austin, TX and I would have felt more comfortable buying there, as the houses are cheaper overall, and the housing prices haven't spun out of control as they have in SD.
About 4 weeks ago, I just moved from NYC to SD. I wanted to buy because I didn't like the idea of moving again. I know I will buy in the future, so I took the chance, not knowing what my employer will be like in the future. I also figured if I rented for 2 years, that would be a waste $40-50K. I would like that $40-50K to go into a house. It will come out the same if I waited for 2 years, and at the same time, I am building equity.
I know the price will continue to fall (not much though since my house is in a really nice community) but I couldn't resist the special interest rate (5.125%) and the closing cost fees ($5K savings) my employer will cover, so I bought my current house in Scripps Ranch.
I believe the housing price will go down further until next early year, and things will either stagnate or go up.
About 4 weeks ago, I just moved from NYC to SD. I wanted to buy because I didn't like the idea of moving again. I know I will buy in the future, so I took the chance, not knowing what my employer will be like in the future. I also figured if I rented for 2 years, that would be a waste $40-50K. I would like that $40-50K to go into a house. It will come out the same if I waited for 2 years, and at the same time, I am building equity.
I know the price will continue to fall (not much though since my house is in a really nice community) but I couldn't resist the special interest rate (5.125%) and the closing cost fees ($5K savings) my employer will cover, so I bought my current house in Scripps Ranch.
I believe the housing price will go down further until next early year, and things will either stagnate or go up.
This is a perfect example of the market right now. Buy at near bottom with a lower interest rate, or buy the end of this year at a higher interest rate. Within 10 years or less you'll be more for the cheaper house with a higher interest rate. Certain areas in San Diego will decline longer than others, while rates have slowly climbed daily ever since the day after the Feds cut the rate .75%.
The magic number is five for California. If you've owned for 5 years, you can sell now for profit. If you buy and live there 5 years, you'll profit. Just be sure to think of it as more than an investment, as it is a place to call home. Its a place to invite over friends, to paint the walls yourself, to mow the lawn on Saturdays, and to fill the air with fragrantly delicious meals in your kitchen.
Lastly, the market will have a spike when the economic stimulus package is realized in the mortgage market, raising FHA loan limits and consequently making homeownership more achievable for a larger consumer concentration. Just a few thoughts
About 4 weeks ago, I just moved from NYC to SD. I wanted to buy because I didn't like the idea of moving again. I know I will buy in the future, so I took the chance, not knowing what my employer will be like in the future. I also figured if I rented for 2 years, that would be a waste $40-50K. I would like that $40-50K to go into a house. It will come out the same if I waited for 2 years, and at the same time, I am building equity.
I know the price will continue to fall (not much though since my house is in a really nice community) but I couldn't resist the special interest rate (5.125%) and the closing cost fees ($5K savings) my employer will cover, so I bought my current house in Scripps Ranch.
I believe the housing price will go down further until next early year, and things will either stagnate or go up.
Scripps Ranch hasn't been hit nearly as hard as some places yet, but it will. No area is immune from this mess.
A year from now, you'll still be out the money you thought would be a "waste" on rent, and be upside down in your home. Double whammy.
This is a perfect example of the market right now. Buy at near bottom with a lower interest rate, or buy the end of this year at a higher interest rate. Within 10 years or less you'll be more for the cheaper house with a higher interest rate. Certain areas in San Diego will decline longer than others, while rates have slowly climbed daily ever since the day after the Feds cut the rate .75%.
The magic number is five for California. If you've owned for 5 years, you can sell now for profit. If you buy and live there 5 years, you'll profit. Just be sure to think of it as more than an investment, as it is a place to call home. Its a place to invite over friends, to paint the walls yourself, to mow the lawn on Saturdays, and to fill the air with fragrantly delicious meals in your kitchen.
Lastly, the market will have a spike when the economic stimulus package is realized in the mortgage market, raising FHA loan limits and consequently making homeownership more achievable for a larger consumer concentration. Just a few thoughts
Even if interest rates do go up, it will only make prices go down even more. There's only so much buying power out there and without the funny financing that propped up this market, prices will drop down in line with incomes. Imagine people actually having to be able to afford the homes they buy!
That 5 year thing is a fiction. If you bought in 2005 you have NO CHANCE of making a profit in 5 years. Prices will be lower in 2010 than they are now. Better to sell ASAP than to hold on 2 more years.
I doubt they have fallen to the bottom yet, but I doubt they will drop that much more.
Right on! Rent is increasing so fast down there, its crazy! 5-10% annually. I'd rather be slowly paying off a home that has done most of its declining than gradually pay more and more towards the landlord's house. A quick example, buy a house/condo today at $300,000 with 5% down and annually you're paying approximately $1800/mo after taxes. Pay $1800/mo rent on a place that will increase to $2000 by the end of your lease, and you'll be paying more. (The reason for the specifics on that scenario is because this is an actual client in San Diego, so I figured it would be applicable to San Diegans).
If you were to find a house to rent for $1300 and want to wait another year or so, then that's a different story. Only let me know if you find a house to rent at that price so I can congratulate you.
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