Affordability in Otay Ranch August 2009 Versus 2002
I was sifting through some inventory in Otay Ranch for one of my clients who's price range was less than $400k. Some pretty good homes were coming up once I breezed through the list of overpriced homes. Then I decided to see how it matched up on the Iphone App using Zillow.
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Zillow brought up 1 home that was foreclosed a while back and so I was feeling pretty good about the Zillow iPhone App. Then I started moving the map to see what else was interesting. Amazingly is brought up the sales prices for the street behind me, Mill Valley Street in zip code 91913, and I noticed that the sales prices of those 2002 sold homes are still there and more importantly, the original owners are still there as they haven't sold the homes since 2002.
| So the next question was, how are the current prices in comparison to the Mill Valley home sales in 2002? I realized something about affordability. If a family in 2002 can afford a 3 bedroom 2 bath home priced around $350k and still maintain it after a 7 years and a major real estate change, could current buyers survive the market uncertainty moving forward in today's time frame? Easily I could see that YES was the answer. A buyer in today's home market could easily afford a $350k home and live in it for a long time period of 5-7 years. Why? If you pay about $350k today, your mortgage loan will be about $335k and an hypothetical monthly payment should be about $1850. $1850 for a 2-income household is about $900/month. I don't know about you, but $1850/month for a 3 bedroom home is well worth it compared to renting a 2 bedroom for about $1500/month. |
Affordability is back my friend. Affordability is back and it's come in strong. Realistically, today's inventory of 3 bedroom homes for Otay Ranch is on average about $330k which is even more affordable for more people. The proof is in the pudding because if normal people in 2002 can afford $350k and maintain it during this difficult real estate market, then today's buyers have it easier. Present day buyers have it easier because they've seen the worst and best of the real estate market and know that diligence, budget, practicality are part of the mainstream again. Also, present day buyers have lower interest rates compared to their 2002 predecessors as well as more government sponsored programs to get them into a home.
Hello real estate affordability. We've missed you, but we're happy your back.
Give me a call/email to talk about your affordability because I want you as a neighbor down the street from me.
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