Last night Greg posted an Ask The Broker question — In your market, is it better to buy in eight months or 14 months? Aside from the arbitrary and limiting waiting periods, it’s an excellent and very timely question. It’s also a question my bride and I are tossing around these days.
We’re still living in my bachelor pad which is a very well located condo in a suburb of San Diego in what’s informally known as East County. It has plenty of room, is incredibly convenient, and has served us well. But we want to buy a detached home in the area. Our current floor plan was apparently designed by a sixth grade class project, and since my wife (in a former life) was a very successful interior designer, it’s time to end her suffering.
Deciding to buy a home in San Diego isn’t a choice made on a lark. A piece of mundane crud goes for half a million bucks. Also, we’re probably going to insist on a granny flat or room to build one, as my mom is closer to 80 than 70. We may actually end up with two extra flats as my mother-in-law is also approaching the time when she’ll need family close by. So our price range will fall somewhere around $700-1Mil — ouch! We’ve been spoiled by the relatively low monthly housing costs we’ve enjoyed for the last few years.
Adding to the cost of buying of course, will be the truckload of cash Queen of All That Is BawldGuy will require to make the new house our home. When you marry a designer you know this going in. Moving or adding walls, and even rearranging entire floor plans isn’t out of the question with her. I’m already practicing my “of course, honey” responses. 🙂 Since I couldn’t design my way out of a wet paper bag, this is guaranteed to be the correct approach.
Our market hasn’t been hit nearly as hard as Phoenix. I haven’t checked, but I can’t imagine we’re mirroring their market — only one of nine homes listed actually selling. And, also like Phoenix, there are signs we’re beginning to show signs of being able to breathe on our own again soon. But when?
After speaking with some of my house agent buddies it’s obvious to me San Diego is poised to make a comeback — albeit painfully snail-like. One of the most recent indicators, at least to me, is the foreclosure auction which left professional investors empty handed. A few hundred homes in two counties sold, and these guys left disappointed in the prices they were commanding.
Here’s what we’ve kinda sorta decided upon as a strategy.
First, I believe 2008 will be the year San Diego shows empirical signs of a return to normalcy, whatever that means. With that in mind, we’re waiting until the last quarter of this year. Before you start screaming at your computer screen, I realize the supply will no doubt be seasonably low. I don’t care. We’ll be part of far fewer buyers than will be on the hunt once the New Year’s Eve hangover wears off. We hope to find something we like, being sold by sellers who are highly motivated. And since our price range has less buyers anyway, this might put us in pretty good position to score a great deal. Or not. Who knows? And if we don’t find what we want, we’ll just become part of the first quarter’s herd.
Of course, if you’re buying a condo in San Diego all bets are off — buy now! Developers and converters are offering buyers everything but their first-born sons to entice buyers. And that’s only a slight exaggeration.
And just for the record, when we find a home, we won’t be using my license to get it done. No way. I want to be represented just like anybody else. I’m not a house guy, so there are surely some questions I don’t even know to ask any more. The last time I sold a house (as a primary residence) as an agent, Nixon was president. So I’m using an agent I’ve known for 20 years, Nancy Dennison. If you’re looking to buy or sell in San Diego’s East County, I strongly recommend calling Nancy. You’ll thank me for it. (Her ‘about’ page has her phone number.)
Now if I was going to buy in the North County area I’d be calling Steve and Kris Berg to represent me. And if you’re wanting to buy or sell in that area, you’ll be grateful for having called those two. Though I’ve only had one chance so far, any time I have someone needing a house pro in that area, Steve and Kris get the call — and there’s no second choice.
My better half and I will begin our buying adventure by checking out the market right after Labor Day. I’ll find a lock box key somewhere, and we’ll get ourselves educated on what’s generally available, and what a good deal is. I’ll take Nancy’s card with me to leave at the houses we preview, so I’m not the one they call. You’d think this wouldn’t have any affect on me, but I’m starting to get jazzed about finding a new home.
The lender I use for my personal stuff doesn’t do any of my other business. I use this lender to keep everyone else at arm’s length, as I’m a challengingly private person. They’ve already said we’re good to go, and whatever type loan we want will be available. I always risk hurting my normal lender’s feelings, but have learned to live with it.
I’d be curious to hear just what kind of loan folks think we should use — fully amortized, interest only, neg-am, hybrid, 3, 5, 10 years, Uncle Guido? I’d love to hear your take.
Ines Hegedus-Garcia says:
Jeff – I have to tell you that you made me laugh with your “I’m already practicing my “of course, honey” responses.” – I’m sure your wife appreciates that. It looks to me like you have a plan. The only thing I would do differently if I were you is change the time you will begin looking – you are doing it when the market is historically hot and negotiating is a bit more difficult – start when the market is slow either the Summer or even after Thanksgiving – you may be pleasantly surprised.
May 15, 2007 — 7:49 pm
Jeff Brown says:
Ines – > The only thing I would do differently if I were you is change the time you will begin looking – you are doing it when the market is historically hot and negotiating is a bit more difficult – start when the market is slow either the Summer or even after Thanksgiving – you may be pleasantly surprised.
I couldn’t agree more with that sentiment, which is why said this in the post:
>With that in mind, we’re waiting until the last quarter of this year.
I’ll just be scouting before then, but won’t get serious until the last quarter, which doesn’t even begin until October. I agree after Thanksgiving gives me even more of an edge, which is why I’m waiting ’till then.
May 15, 2007 — 7:58 pm
Ines Hegedus-Garcia says:
good luck to you Jeff – I’m sure you’ll find that dream home that your wife can have fun tearing appart. : )
May 15, 2007 — 8:13 pm