About to buy a place at Savannah in Columbus Grove - Any advice on the area and development?

[irvine_grad_IHB]

IMO it doesn't make monetary sense to buy in your particular situation but, honestly, it really seems like you've already made up your mind and are just seeking affirmation for your decision.

 

[asianinvasian_IHB]

IMO it doesn't make monetary sense to buy in your particular situation but, honestly, it really seems like you've already made up your mind and are just seeking affirmation for your decision.

He wasn't asking whether or not he should buy.

 

[kcmkane_IHB]

Genie --- Hopefully I don't get flamed by the PC Police, but since it sounds like your goal is to ultimately convert this to a rental property, make sure you consider how much of Savannah was dedicated affordable units (including Families Forward) and how that factor might impact how much these may rent for in the future. I could see this community not aging too well, and a 1 bed here renting for considerably less than nearby IAC 1 bed's. There are some very nice IAC 1 bed's in the immediate vicinity --- Santa Clara and Santa Rosa come to mind --- which are likely to remain highly desireable down the road. Better be sure your unit can compete in the neighborhood, and that what you can capture in rent can cover your mortgage in the future.

And don't get me wrong...I think affordable and transitional housing are great programs, and help many people in an economy like this. But if your goal is an investment property, you may want to look elsewhere.

 

[graphrix_IHB]

So how much more do you think prices will drop? Another 10%? 20%?

Shouldn't you take into account the tax deduction you would have receive over those two years when instead you are paying rent still and more taxes? Just my thoughts.

In two years interest rates will still be the same and artificially low due to the Fed still buying MBS, property prices will be lower, and we might finally be back on the road to recovery. I have a pretty goo track record of being too optimistic about the housing market, so it could actually be worse.

P.S. Mello roos are not tax deductible. I recommend you consult your accountant, and find one that says they are not deductible, otherwise I would hate to be audited if I were you.

Prices for 1 bedrooms will drop 20% or more. They will drop to below rental parity, because that is what they did in the 90s, and this recession is worse than the 90s. 1 bedrooms dropping below rental parity is in the bag. Mark my words, in the bag.

How much of a tax break are you expecting? I don't know what your purchase price is, but if you have a $250k loan amount, and an interest rate of 4.75%, then that $20k in interest that you can partially offset your taxes with over two years really doesn't seem like it will make up for the fact that you can rent a 1 bedroom in Irvine for $1600-$1800.

I really suggest you speak with an accountant. Discussing tax breaks with a salesperson, er I mean loan officer, is like asking a car salesperson if a car is reliable, they don't care and they will tell you what you want to hear... the car is as reliable as big as a tax break is on a home. Trust me, I speak from experience, as a LO and as someone who has written off interest. I think you are expecting a lot more than you will ever get. You are expecting a BMW, but at the end of the year you will realize you just got a Ford.

Take it for what it is worth, but keep in mind rental rates will go down in the coming years and stay flat for some time to come. If you can't cover the costs to rent it out now, then in the next few years you won't be able to either. Again, I speak from experience, even though I was able to raise my rents in a down market, but that is how you do it, if you know how. Be fearful when everyone is greedy, and be greedy when everyone is fearful. A tried and true Buffett statement.

 

[graphrix_IHB]

In two years interest rates will still be the same and artificially low due to the Fed still buying MBS, property prices will be lower, and we might finally be back on the road to recovery. I have a pretty goo track record of being too optimistic about the housing market, so it could actually be worse.

P.S. Mello roos are not tax deductible. I recommend you consult your accountant, and find one that says they are not deductible, otherwise I would hate to be audited if I were you.

I will respectfully disagree with Graphcakes. The Fed will be buying MBS, and more importantly the Fed will be buying the long bond, but within two years interest rates will head up no matter what the Fed does. And home prices will continue to fall. If massive price inflation occurs, home prices may increase in nominal dollars, but in real dollars, they will continue to fall.

I agree and disagree with you. I think you are right, we will see massive price inflation. But... I think the housing market will still suck big time, and since the Fed owns FHA, Fannie and Freddie, then they will do what ever it takes to keep interest rates on mortgages artificially low. They have taken the what ever it takes stance now, and I know that they will take it then. While you see it as a problem today, and it will be a major problem then, it will truly be a benefit to those of us who wait. I admit, I could be totally wrong on this, because in 93 Greenturd lowered rates to get us out of a recession only to raise them from 94-96, and it should happen again. But... it really is different this time, and those controlling the Fed could give even a sh*t less than Greenturd ever gave about inflation. Scary, huh?

 

[No_Such_Reality_IHB]

So No_Such_Reality, do you own a house? And if so, why did you buy if there were additional taxes and fees that come with a house?

I bought it because it was cheaper than renting after taxes, mortgage, fees and maintenance expenses.

I sold it when it got massively over priced and renting a property was way cheaper than buying.

How do the numbers work out after taxes and expenses.

 

[awgee_IHB]

In two years interest rates will still be the same and artificially low due to the Fed still buying MBS, property prices will be lower, and we might finally be back on the road to recovery. I have a pretty goo track record of being too optimistic about the housing market, so it could actually be worse.

P.S. Mello roos are not tax deductible. I recommend you consult your accountant, and find one that says they are not deductible, otherwise I would hate to be audited if I were you.

I will respectfully disagree with Graphcakes. The Fed will be buying MBS, and more importantly the Fed will be buying the long bond, but within two years interest rates will head up no matter what the Fed does. And home prices will continue to fall. If massive price inflation occurs, home prices may increase in nominal dollars, but in real dollars, they will continue to fall.

I agree and disagree with you. I think you are right, we will see massive price inflation. But... I think the housing market will still suck big time, and since the Fed owns FHA, Fannie and Freddie, then they will do what ever it takes to keep interest rates on mortgages artificially low. They have taken the what ever it takes stance now, and I know that they will take it then. While you see it as a problem today, and it will be a major problem then, it will truly be a benefit to those of us who wait. I admit, I could be totally wrong on this, because in 93 Greenturd lowered rates to get us out of a recession only to raise them from 94-96, and it should happen again. But... it really is different this time, and those controlling the Fed could give even a sh*t less than Greenturd ever gave about inflation. Scary, huh?

I agree that the Fed will do whatever it takes to keep interest rates low, and for awhile they will be successful. And I think within two years they will fail. I think that their actions will actually have the opposite of the intended effect. JMO

 

[usctrojanman29_IHB]

So how much more do you think prices will drop? Another 10%? 20%?

Shouldn't you take into account the tax deduction you would have receive over those two years when instead you are paying rent still and more taxes? Just my thoughts.

In two years interest rates will still be the same and artificially low due to the Fed still buying MBS, property prices will be lower, and we might finally be back on the road to recovery. I have a pretty goo track record of being too optimistic about the housing market, so it could actually be worse.

P.S. Mello roos are not tax deductible. I recommend you consult your accountant, and find one that says they are not deductible, otherwise I would hate to be audited if I were you.

Prices for 1 bedrooms will drop 20% or more. They will drop to below rental parity, because that is what they did in the 90s, and this recession is worse than the 90s. 1 bedrooms dropping below rental parity is in the bag. Mark my words, in the bag.

How much of a tax break are you expecting? I don't know what your purchase price is, but if you have a $250k loan amount, and an interest rate of 4.75%, then that $20k in interest that you can partially offset your taxes with over two years really doesn't seem like it will make up for the fact that you can rent a 1 bedroom in Irvine for $1600-$1800.

I really suggest you speak with an accountant. Discussing tax breaks with a salesperson, er I mean loan officer, is like asking a car salesperson if a car is reliable, they don't care and they will tell you what you want to hear... the car is as reliable as big as a tax break is on a home. Trust me, I speak from experience, as a LO and as someone who has written off interest. I think you are expecting a lot more than you will ever get. You are expecting a BMW, but at the end of the year you will realize you just got a Ford.

Take it for what it is worth, but keep in mind rental rates will go down in the coming years and stay flat for some time to come. If you can't cover the costs to rent it out now, then in the next few years you won't be able to either. Again, I speak from experience, even though I was able to raise my rents in a down market, but that is how you do it, if you know how. Be fearful when everyone is greedy, and be greedy when everyone is fearful. A tried and true Buffett statement.

Graphcakes...you can now get a 1-bedroom IAC apartment for around $1,350-$1,400 today. Seeing that rents are coming down makes less sense to buy a property now...I'll let the dust settle before I pull the trigger (plus once I have a full-time job).

 

[genie117_IHB]

And how do you know if property prices will be back up? You need to realize that 1-bedrooms don't appreciate that much since most people who move to the Irvine area are families. You do know about the plume and the big airplane hanger over there right?

Well I was planning on living in it for more then just a few years so I'm sure in 10 yeras the prices will go back up to more then what I am buying it for. I actually love the big airplane hanger over there to be honest. I think it's kinda a cool landmark and what plume are you referring to? I am aware that a lot of people who move to Irvine are families, but there are also a lot of UCI students and young professionals. There are plenty of one bedrooms being sold and purchased by people like me. If there weren't why would anyone still make one bedrooms for sale or rent?

Thanks for the advice!

 

[genie117_IHB]

Genie,

I was looking at some of the 2 bedrooms for 409k, I put in an offer of 390k and the owner called it Frivolous ...(we will see in 2-3 months)

can you tell me the range of the 1bedroom?

Thanks!

The place I'm getting is a forclosure/bank owned so I'm not sure the price is what the market would dictacte. But I am getting a good deal I think or else I wouldn't buy it right? I"m paying in the low $300K.

So they wouldn't budge on the $390K? I'm sure after it sits on the market for a few more months they'll be kicking themselves for not taking your offer.

 

[genie117_IHB]

IMO it doesn't make monetary sense to buy in your particular situation but, honestly, it really seems like you've already made up your mind and are just seeking affirmation for your decision.

Well first of all, you don't really know my "particular situation" do you? And second...I wasn't asking for affirmation on my decision. Read the title of my thread please. I am asking for any advice on the area and development...NOT about whether to buy this place or not. Geeze.

 

[genie117_IHB]

IMO it doesn't make monetary sense to buy in your particular situation but, honestly, it really seems like you've already made up your mind and are just seeking affirmation for your decision.

He wasn't asking whether or not he should buy.

Lol...Thanks. BTW...I'm a she not a he.

 

[genie117_IHB]

Genie --- Hopefully I don't get flamed by the PC Police, but since it sounds like your goal is to ultimately convert this to a rental property, make sure you consider how much of Savannah was dedicated affordable units (including Families Forward) and how that factor might impact how much these may rent for in the future. I could see this community not aging too well, and a 1 bed here renting for considerably less than nearby IAC 1 bed's. There are some very nice IAC 1 bed's in the immediate vicinity --- Santa Clara and Santa Rosa come to mind --- which are likely to remain highly desireable down the road. Better be sure your unit can compete in the neighborhood, and that what you can capture in rent can cover your mortgage in the future.

And don't get me wrong...I think affordable and transitional housing are great programs, and help many people in an economy like this. But if your goal is an investment property, you may want to look elsewhere.

I think I read that only 6% of the homes in Savannah were dedicated to affordable units. But I would need to double check that amount. I do not think most renters really care or even bother to look up whether the community has affordable units. I know when I lived in NY it never bothered me much that our building had affordable units and we were living in a lot closer proximity then this would be.

But thank you very much for the advice. That is definitly something to think about. I did kinda figure that by the time I decide to move out of this condo (at least 10-15 years) that I would be in a financial position to where I wouldn't be too worried about a few hundred dollars difference in the mortgage and rent.

Just curious but why do you nit think this community will age well? The real goal isn't investment property as it is having a place that is mine and not paying my land lords mortgage and throwing away money in rent every month. Even if it is a little more expensive a month the money is going to my equity..not someone elses.

 

[genie117_IHB]

I just wanted to thank everyone for the advice they have given on this thread. Man you guys really sure know how to kill a girls excitement about buying her first place, but it is still appreciated. I do think that if my plan is to keep and live in this property for more then 7-10 years that I won't really take a loss on it. Considering that I can afford the payments and would much rather pay a little more a month that then rent for another 5 years that this is a good investment.

I have been watching the market for the past 3 years waiting to buy (and I'm very glad I did) and think that the market in Irvine might drop another 10% -20%, but in the long run it will slowly go back up. I know most of you on here don't think we've hit bottom yet and we may not have, but who knows for sure right? I think if you can afford the house that you want now and would be comfortable with the payments and the price then go for it. Sure beats having a freaking land lord and not being able to paint your walls or have a place of your own. Who really knows where the bottom is until we've gone past it. Do you all really think a one bedroom in Irvine that is over 1,000 sq feet will drop past $250K?

So....does anyone have any more information about the development, builder or area that they think I would wanna know? Again...any information is always appreciated.

THANKS AGAIN!

 

[caycifish_IHB]

I apologize for not being able to add any information about the area or the builder or otherwise contribute to your goal for this thread.

However, something about your story struck me.

You are a female (who strikes me as young based on your writing, referring to yourself as "girl" and this being your first home purchase) who is absolutely certain that for the next 7-15 years (based on the numbers thrown out thus far) you will not be adding or including another human being into your personal life such that they will need space in your home. Also, it follows that you do not expect to be included in another's home for that time period due to your expectations on when you would begin to rent out this property.

That is either really, really sad...or really, really unrealistic.

If you have real, honest reasons for those to be your expectations in life then I empathize in your general direction.

If not, um, be serious. Life happens. And I mean that in several ways.

 

[genie117_IHB]

I apologize for not being able to add any information about the area or the builder or otherwise contribute to your goal for this thread.

However, something about your story struck me.

You are a female (who strikes me as young based on your writing, referring to yourself as "girl" and this being your first home purchase) who is absolutely certain that for the next 7-15 years (based on the numbers thrown out thus far) you will not be adding or including another human being into your personal life such that they will need space in your home. Also, it follows that you do not expect to be included in another's home for that time period due to your expectations on when you would begin to rent out this property.

That is either really, really sad...or really, really unrealistic.

If you have real, honest reasons for those to be your expectations in life then I empathize in your general direction.

If not, um, be serious. Life happens. And I mean that in several ways.

Lol. Thanks for the concern. I guess you never know what will happen and I'm just planning for now and not what if. That and I figure this place is big enough for two people since it seems to be designed for two (hence the double sinks in the master) that if I needed to squeeze another person in there then it would work. Life does happen and you never know if someone else will or won't come along? Figured I'd go ahead and get something now cuz you never know if someone else will come along. Man after all these years maybe I have become a pessimist!

And I'm really not that young. Just young a heart. And I have waited way to long to purchase my first home. Just figured I couldn't wait around for Prince Charming to come along with a ring and a 4 bedroom house in North Park.

 

[SoCal78_IHB]

"About to buy a place at Savannah in Columbus Grove - Any advice on the area and development?"

Welcome to the boards, genie. You will find more activity on this thread come Monday (the weekends are slow.)

You asked in a previous comment, "who is the bookster?" That blogger was referring to Bkshopr, our resident expert on architecture, homeowner trends, etc. You can go to the search bar in the upper right-hand corner of this page and type in his name to find his posts. I take notes on his opinion of various builders... and for the record, he has referred to Lennar as sacrificing quality for flashiness. Type in "Lennar" without the quotes in the search bar for more info. Columbus Grove is not a well-received neighborhood. Do some digging and you will find out why.

I think a good first step here might be to take some of the comments people have left and do some more research on this site. It will reveal a lot of useful and priceless information. Also go to the main blog and seek out the posts that discuss how interest rates effect the principal values of real estate... how this in-turn effects your future buyer's ability to pay you... take the "Are you smarter than a Realtor" quiz and you will learn a lot there. Of course, I think IR's book "The Great Housing Bubble" should be required reading for anyone who is even remotely thinking of buying a property at any point.

 

[jbatzmaru_IHB]

genie- do a search and you will see a ton of stuff for savannah. I was going to buy back in 2007. but thanks to the board i backed out and saved a ton of money. I ended up renting in westpark and found out that living in irvine was not for me. saved me from making a major mistake. If you have any specific question you can email it to me. check out the pros and con in one of my post. and the affordable housing is more like 11-12%. If you do your research you will find that alot of the condo was bought at the peak with funny loan. you will also see alot of forecloure in this place coming up.

 

[irvine_grad_IHB]

I just wanted to thank everyone for the advice they have given on this thread. Man you guys really sure know how to kill a girls excitement about buying her first place, but it is still appreciated. I do think that if my plan is to keep and live in this property for more then 7-10 years that I won't really take a loss on it. Considering that I can afford the payments and would much rather pay a little more a month that then rent for another 5 years that this is a good investment.

I have been watching the market for the past 3 years waiting to buy (and I'm very glad I did) and think that the market in Irvine might drop another 10% -20%, but in the long run it will slowly go back up. I know most of you on here don't think we've hit bottom yet and we may not have, but who knows for sure right? I think if you can afford the house that you want now and would be comfortable with the payments and the price then go for it. Sure beats having a freaking land lord and not being able to paint your walls or have a place of your own. Who really knows where the bottom is until we've gone past it. Do you all really think a one bedroom in Irvine that is over 1,000 sq feet will drop past $250K?

So....does anyone have any more information about the development, builder or area that they think I would wanna know? Again...any information is always appreciated.

THANKS AGAIN!

genie: apologies for skimming and not reading fully. didn't meant to come off like an ass.

now that i have some time, i can phrase my comment properly. for most people, i do think it is worth it to wait a bit longer to buy a house. i can't tell you that prices will surely fall below 250k for a 1br, 1000sqft condo (i think they will) but i can tell you that when we do hit bottom, things won't rebound so quickly that you'll need to worry about missing it. i'm of the opinion that when housing hits bottom, it will hover around there for 3+ yrs-long enough for most people looking to notice. right now we, as potential buyers, are in a good position to wait and see where this thing goes.

that said, i understand that there are many other factors included in your decision making and if you've decided to invest in this area, more power to you. as for savannah, i haven't seen or heard much about it. i did live in the semi-close deerfield area (harvard/deerfield) and the train was quite loud. some people find it extremely annoying (my apt. mate couldn't sleep for a good month after we moved in) but i found that most of us got used to the sound. just something to keep in mind. good luck on your purchase!

 

[serious weapon_IHB]

Just figured I couldn't wait around for Prince Charming to come along with a ring and a 4 bedroom house in North Park.

You just described my wife.