San Diego home prices to slide for 2 more years (Los Angeles: foreclose, condos)

[sdurbanite]

Less than a month ago, friends who lived in Talmadge sold their house after on being on the market for only 2 days. Had 5 different offers and got more than their asking price...........not bad during these tough economic times.

[f_m]

It's largely area dependent, but many people figure that if the monthly cost to rent is close to the cost to buy, then prices will stabilize. That has happened in a number of places.

[NorthSDLifer]

<on rent and mortage being equal>

This is after putting 20 percent down - instead of investing it or letting it earning interest* - plus $10-$15K in closing costs. Never mind the almost compulsory post-closing trips to Home Depot or Z Gallerie, or whatever your favorite decor/hardware store.

*I know CD/MMA rates stink right now.

[f_m]

Originally Posted by NorthSDLifer

<on rent and mortage being equal>

This is after putting 20 percent down - instead of investing it or letting it earning interest* - plus $10-$15K in closing costs. Never mind the almost compulsory post-closing trips to Home Depot or Z Gallerie, or whatever your favorite decor/hardware store.

*I know CD/MMA rates stink right now.

Yes, with 20% down, which is typical, and almost required now (well, for conventional and to avoid fees, etc...). Anyone who really wants to buy should be saving. Not sure why closing costs would be that high. When I looked, estimated closing costs were $2-3k.

[NorthSDLifer]

Originally Posted by f_m

Yes, with 20% down, which is typical, and almost required now (well, for conventional and to avoid fees, etc...). Anyone who really wants to buy should be saving. Not sure why closing costs would be that high. When I looked, estimated closing costs were $2-3k.

Two to 3 percent of purchase price?

Way back in 2001 when my wife and I bought our first place, for $120K, we paid about 3 grand for closing costs, and that can include impounds for property taxes, HOA dues and insurance -- not just one-time fees to the escrow company and lender.

Recently, our good faith estimate for a $350,000 purchase was a little over $10,000.

[Boompa]

I think the immediate area, close to the city will maintain it's value. going out 15 and 215 will be a disaster. Ten years of declining wages have made those homes impracticle, the middle class can only afford to shop at WALMART

[f_m]

Originally Posted by NorthSDLifer

Two to 3 percent of purchase price?

For CA, I always hear 1-2% of the price. If you want to buy points or something then it's more, but that's optional.

Originally Posted by NorthSDLifer

Way back in 2001 when my wife and I bought our first place, for $120K, we paid about 3 grand for closing costs, and that can include impounds for property taxes, HOA dues and insurance -- not just one-time fees to the escrow company and lender.

Recently, our good faith estimate for a $350,000 purchase was a little over $10,000.

I don't know, I got estimates from SDCCU and BofA (which can be gotten online) in the $2-3k range for 300-400k price. I have no interest in using prepaid impounds, not sure what the real advantage would be (I've read of some of these escrow companies going out of business, although most of the shaky ones are probably gone by now). Closing at the end of the month will minimize prepaid interest to a few hundred dollars. SDCCU gives closing costs waivers up to $3k in fees at certain times of the year. A mortgage broker would not tell me the range, though I know someone used a mortgage broker and he said he paid around $10k, but I think with 1 point. If you want the lowest possible rate and are willing to put more upfront to buy the rate down, then closing will cost more upfront, but you could always roll it into the loan.

[NorthSDLifer]

Originally Posted by f_m

For CA, I always hear 1-2% of the price. If you want to buy points or something then it's more, but that's optional.



I don't know, I got estimates from SDCCU and BofA (which can be gotten online) in the $2-3k range for 300-400k price. I have no interest in using prepaid impounds, not sure what the real advantage would be (I've read of some of these escrow companies going out of business, although most of the shaky ones are probably gone by now). Closing at the end of the month will minimize prepaid interest to a few hundred dollars. SDCCU gives closing costs waivers up to $3k in fees at certain times of the year. A mortgage broker would not tell me the range, though I know someone used a mortgage broker and he said he paid around $10k, but I think with 1 point. If you want the lowest possible rate and are willing to put more upfront to buy the rate down, then closing will cost more upfront, but you could always roll it into the loan.

Neither of our two loans nor our refi was done using points.

If you remove those reoccurring fees, then the amount as a percentage probably correlates to 1 to 2 percent. I'm not doubting that fees vary or that they can be negotiated.

The advantage, or "advantage," to impounding taxes/insurance is many lenders will give you a lower interest rate for the privilege of collecting your money. On my last home loan, I was so annoyed that Downey overestimated that amount, that I insisted on ending the arrangement. Thus the other "advantage": Some would rather be forced to pay the money monthly so that they don't face a big tab later; maybe the same people who willingly overpay their taxes each paycheck so that they get a big reward come February.

[f_m]

Originally Posted by NorthSDLifer

The advantage, or "advantage," to impounding taxes/insurance is many lenders will give you a lower interest rate for the privilege of collecting your money. On my last home loan, I was so annoyed that Downey overestimated that amount, that I insisted on ending the arrangement. Thus the other "advantage": Some would rather be forced to pay the money monthly so that they don't face a big tab later; maybe the same people who willingly overpay their taxes each paycheck so that they get a big reward come February.

This is completely optional, you made a statement about $10-15K, which is far off from $2-3K. As far as paying more later, I guess it depends on the situation, property taxes are the same, I don't see any reason to pay them early.

I suspect there are some lenders that might give a lower rate for impound, but generally it's unnecessary unless you do under 20% down payment, and I have not actually heard or read of any interest benefits from it.

Didn't Downey go out of business (had to be taken over)?

[tsuyoi_racing]

I just talked to my real estate agent. She says the inventory is in very short supply and demand is driving up prices through foreclosure bidding. She says the bottom has been reach and house prices are starting to climb steadily. That is in part due to Obama's first time $8000 credit, the general lack of properties in SD, and signs of recovering economy/housing sales. By December 2109 prices will be increasing at healthy levels. Knowing that, she advised its better to buy soon before the price of homes rebounds by the end of the year.