cash out of Calif SFR?

[LEX]

I would figure out how to stay in SD. 8)

Home Equity at the high end of the range ( throphy homes La Jolla and Rancho Santa Fe) will most likely go down but you can handle it. Look at it this way, you can open your windows in winter for the 70 degree breeze rather than pay 200/month gas bills. Outside of the house costs its not so expensive to live in SD. Shop at Costco and drive a Mazda or Toyota.

I would check the craigslist for SD real property adds. There are a lot o good deals FSBO w/o brokers (but plenty of crooks, do your homework before hand!). IMHO by middle of next year you will see the flippers dumping their high leverage no money down 'investments' and some may be worth picking up, especially in the edges of North County and out east. Its all good!

[califdreamer]

Thanks for the post LEX. You make some good points about the SD housing dilemma. Yes, my property value will go down. But so will everyone else's around here. And if you want to stay here that's what matters. I agree with you it will be the La Jolla high end stuff that will get socked more than my tract home on the cul de sac in the burbs. There will also be deals to be found in 2007 and 2008 and maybe beyond as the troubled loans come home to roost. I haven't looked at craigslist that much but sounds interesting for FSBOs. Maybe my best strategy is to stay put and keep an eye out over next several years for distressed seller opportunities.

Yesterday I went golfing with some friends and it was just an absolutely beautiful sunny day. We had drinks and bbq on my friend's patio and watched the sun set over the Pacific. And we talked about what to do with home equity. He had contacted an agent in San Antonio (I didn't tell him about the fire ants and scorpions) and said he and his wife were looking into a possible move. We also talked about what a beautiful day it had been golfing and sitting outside. We wondered if we'd end up regretting it if we did move.

[LEX]

Dreamer:

I lived in Texas when I was younger ( I now live in Arizona) and there are lots of nice things about Texas, especially the lack of a state income tax.* However, having spent a significant time each summer in SD (Vista) I prefer the climate and abience of SD county. Tastes and preferences vary, of course.

There are always Real estate deals no matter where you live.* People divorce, go broke, and leave estates and though there are pro's that always work these listings you have a chance to find them, especially if you net work with your friends.* Yes, its easy to move to Texas as well as other places and ride your equity into the sunset.* That is a very valid decision.* However, I bought into North County for an investment/summer getaway and do not regret it at all.* It helps me save on my annual utilities once the temp here in Phoenix gets above 100 in April enough to offsett some of the costs, and I expect that a one bedroom flat will hold its value. 8)

[califdreamer]

Tomorrow evening (Tuesday) I'm going to see Robert Campbell speak in Los Angeles. He writes an newsletter about the San Diego and Southern California real estate markets. He has an interesting model for predicting rates of appreciation and the best time to get in and out of RE markets. I know he is extremely bearish on the RE mkt here. I've heard he is forecasting a mind blowing 40% drop in housing values in SD. Even though I think he's smart to look at lots of data and all that I think he's going too far with that prediction. I think we're in for something like a 15-20% drop. I know he likes the idea of investing in undervalued mkts like those in Texas. Should be very informative and thought provoking. I believe his website is realestatetiming.com if anyone's interested.

Having said all that, even though I could stand to save equity by bailing out of the house and renting I would sure hate to go thru the moving drill if housing prices didn't drop enough to offset costs of moving. I figure the breakeven point for coming out ahead would be a 10% decline in market value but the psychic costs would tag on another 10%. I figure it would be about a wash so might as well stay put. Unless robert scares the s**t out of me tomorrow night.

[LEX]

You might find this article by Scott Burns about your home as an investment a good read, given what you are thinking about these days:

http://www.uexpress.com/scottburns/

8)

[califdreamer]

Thanks LEX... good article. Maybe it's best to look at the very long term and enjoy the shelter benefits author talks about. I'll report on Campbell's presentation tomorrow PM or Wednesday.