Port Hueneme, CA an other beach front properties (Irvine, Thousand Oaks: foreclosed, condo)

[HSP1161]

Originally Posted by user_id

The 1-3 years is uncommon even today and primarily isolated to areas with massive numbers of foreclosures, not really applicable to Ventura County. Lenders would lose money by doing that here.

You think it will return to 6-9 months?

Originally Posted by user_id

Anyhow, low down payments are likely to be a thing of the past. The private markets won't support them and the government subsidies will be greatly reduced as the market recovers.

Yes, it's too much risk shouldered by the banks/taxpayers. That was my original point.

If Fannie / Freddie back out completely, we'll see far fewer 30 year fixed products, as well.

[user_id]

Originally Posted by OpenSky

You think it will return to 6-9 months?

Of course it will return to normal, the longer times are due to the large number of foreclosures. But homes in areas with moderate levels of foreclosures aren't sitting around for 1-3 years even right now.

Originally Posted by OpenSky

If Fannie / Freddie back out completely, we'll see far fewer 30 year fixed products, as well.

Perhaps, but there is investor demand for 30-year fixed securities. They will just have a higher premium once the government subsidies are removed.

[SOON2BNSURPRISE]

User ID,

Here is a recap of your advice within this thread. And we all know you will offer an educated answer.

Page 5 Post #44 User ID

No they don't, any good financial planner is going to know when its better to rent vs own. You're talking about popular opinion. Determining whether its better to rent vs own is a pretty simple calculation and you can find rent vs own calculators all over the internet. Certainly some of it is speculative, you have to make guesses about future appreciation and rents. If the numbers are borderline, the owner is actually making the bigger bet. The renter can always (cheaply) switch strategies, the owner on the other hand has already put down their bet and can't retract it.

In the above quote you seemed to be saying that I should use a rent vs own calculator. I did that and your answer to rent vs own calculators is below.


Page 11 Post #101 User ID

Anyhow, in terms of rent vs buy calculators, those are based on inputs. If you make unrealistic progressions about home appreciation, etc then you can easily make ownership look cheaper. The current numbers tell you how things stack up today, to make a longer term projection you have to speculate on the direction of the real estate market, rents, inflation, etc. For me, the fact that its currently cheaper is the primary issue as my circumstances are likely to change in the next 2-3 years. But, the fundamentals don't look good for the long-term either. Oxnard has adjust the most in Ventura County, yet still the average family in Oxnard can't purchase the average home.

Which is it, use the rent vs buy calculators or don't use them? I put in some conservative numbers and came up with the idea that it is better to buy then rent. You should have seen the projections that I was given by my lendor. We were told that in 30 years our home would be worth over $2,000,000. The current calculators have it at more like $680,000 quite a bit more conservative if you ask me.

Also the article that I used as a reference stated that traditionaly the price to rent ratio has been 16.5 meaning that the price of a house is the same as what you would pay to rent it over 16.5 years. With my situation the price to rent ratio decreases to 12.3 with the lower the number the better time it is to buy. Lets say that my numbers were more liberal in offering a good outcome. I have quite a bit of wiggle room before I am at the 16.5 range. So tell me once again or offer some advice on setting a differant outcome. Maybe I will try those numbers and see what happens.

[SOON2BNSURPRISE]

Originally Posted by user_id

In terms of a 16.5 multiplier, that is historically rather high. They are only looking back to 1986 and around 1/3 of the data is during the largest real estate bubble in US history. There was also a smaller real estate bubble in the early 90's, so most of the data was collected during periods of inflated real estate evaluations.

Lets go back to 1965 then.

Here are the numbers for my parents home.

Purchase price: $13,000

Yearly rent: $1,200. Yes they were paying $100 a month to rent a home back then.

$13,000 / $1,200 = 10.83

Seems like a deal if you ask me. Who knows what was going on back in 1965. Maybe that was not normal, a fluke, who knows. The only facts that I have are for their situation, that they paid $100 a month in rent and that their home cost them $13,000 and that the payments were $105 a month. I don't think that it included taxes though.

Maybe we are still high then, who knows. All I know is that we have a home that we love and can afford. I don't care about others situations.

[user_id]

Originally Posted by SOON2BNSURPRISE

In the above quote you seemed to be saying that I should use a rent vs own calculator. I did that and your answer to rent vs own calculators is below.

You can, but you have to use one takes all (or most) the variables into consideration. The information you were posting wasn't a rent vs own calculation, it was using rent multipliers to determine whether buying was historically speaking cheap or not.

There are two issues here. The buy vs rent calculators online typically tell you - based on some set of variables - how long it will take for ownership to pay dividends (i.e., until it saves you money). As I said previously, even if you grossly over pay today over 30-years owning is likely to be cheaper. But does that mean today's prices represent good value? No, if renting is cheaper today than it makes sense to rent until ownership gets closer to rental parity.

Originally Posted by SOON2BNSURPRISE

Also the article that I used as a reference stated that traditionaly the price to rent ratio has been 16.5 meaning that the price of a house is the same as what you would pay to rent it over 16.5 years.

Yes, if the world started in 1986. The problem with their number is that its based on very poisoned date range, 1/3 of the data is from the housing bubble. Change the data range and you'll get a much different number.

Also, average multipliers like this are useless in terms of evaluating individual properties, as the saying goes "real estate is local". You'd have to look at the local relationship.

[Winston Smith]

Was thinking this might be a good read right about now: Unarmed but still Dangerous - Dealing with Internet Trolls - the Cognitive Therapy Approach. Are we still in Port Hueneme beach-front properties?

[user_id]

Originally Posted by SOON2BNSURPRISE

Maybe we are still high then, who knows. All I know is that we have a home that we love and can afford. I don't care about others situations.

To say it again, I'm not trying to make any comment about your particular situation, for one I don't know all the details. Additionally, buying a personal residence involves more than the financial considerations, though I do think one needs to have a good understanding of the financial impact before you can make a good choice. You have to know the costs to do a costs vs benefit analysis.

The reason I'm focusing on the financial aspects is because the topic was originally regarding investments and it is here that the financial considerations are king. Evaluating value from a personal point of view is really not much different than from an investment point of view, you can view the former as just "renting" from yourself.

[Cyanna]

Originally Posted by winston smith

was thinking this might be a good read right about now: unarmed but still dangerous - dealing with internet trolls - the cognitive therapy approach. Are we still in port hueneme beach-front properties?

roflmao!!! :d

[LadyKLO]

Originally Posted by Cyanna

roflmao!!! :d

that was funny!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!111

[rgb123]

Originally Posted by user_id

Of course they are, the top companies in Oxnard are manufacturing firms. For example Haas Automation and Wateryway Plastics. The farming in the area is pretty apparent. And the low skill service jobs are apparent as well, just walk into any retailer or go to the PH ports.

Also, my comment was about private employment, Oxnard like any city has a good deal of public workers as well. Of course Oxnard/PH has more due to the military, but most of these can be filled under "lower skill service jobs".

I agree with almost everything you have said, except for the above.

I've worked for the military as a contractor for the last 5 years or so, 10 including breaks to do other things.

I'm suprised by the bit of snobishness I'm reading about the military in this area vs. other places I've worked in the country (such as San Antonio, where military is valued and most people realize the jobs it brings in, highly skilled workers like myself...engineers, IT, scientists, highly specialized technical/engineer types).

The military is supported by some very highly skilled (and well paid) contractors and civillians.

I've not lived in many places where working for the military brings a stigma...lol.

I have mostly worked for the Air Force and it's true that areas right outside bases do tend to be low-income, there is a general understanding that military work is stable and often we receive deals on housing/security deposits. We also tend to have to move around a lot -- hence renting over buying despite stable work and strong income. It's hard to get increases without being willing to move.

Anyway, I think areas near Naval Bases have better chances of increasing in value due to the interest they can bring (such as the big ships in the harbor around San Diego).