Sunday, April 01, 2007

Is $579K in Penasquitos a good deal?

With an asking price of $579K this may be tempting in todays market, but when you disect the numbers and plot the history of this home, you quickly find out the next buyer (even at $579K) will be in for a rude surprise.
From 1988 to 1997 the rate of appreciation was about 3% per year, which is on pace with inflation. From 1997 to 2007 the rate of appreciation was about 18% per year. Not only is it unjustified it quite criminal.
That $175K home in 1988 with 3% inflation per year should be worth about $310K today, which looking at the house is quite reasonable.
Your Thoughts?


Anonymous said...

Well if someone is willing to pay 579, then go for it. I certainly wouldn't pay that. The 310k sounds about right, but then I would hate to pay a $1800/month mortgage for a depressing place like that.

Anonymous said...

What would the mortgage be with 20% down on a 30 yr fixed? If it about the same as the rental price - you are right on at $310k

Anonymous said...

My brother lives in Penasquitos. Nice little community, but I just don't understand the prices!!! However, I live in Santa Clara county, so... But on the brighter side, my rent is cheap and my pay is ridiculous. I wouldn't mind retiring to San Diego. By then, the prices are normal, and I pay cash.

Anonymous said...

Right On Bob!!

I don't think that trash deserves 579k.

Once I was in Austin being driving through a real nice neighbourhood on top of a hill with views of lakes. I go "Is this a million dollar community" and the guys were shocked. this aint' california. They are around 350k.

If the home prices don't come down by 30-40% in San Diego. I'll move to austin and live in a palace.

Zili said...

Interesting to know.