Just bought a house in Woodbury

NEW -> Contingent Buyer Assistance Program
C

catchmeifyoucan_IHB

New member
Hello all,



I've been reading posts in this forum for quite a few months. You all have lots of useful information. I really appreciate it.



I know it's a little too early to buy. House price in irvine may drop a more but I've been sick of standing on the side waiting and we are expecting a baby in november. I also want to get some tax break from the house.



Anyways, my wife and I just signed a contract to buy a new detached condo (Cortile-Residence 3 with 3 bedrooms) in Woodbury for 535K with 20K incentive.

We put down 20% and we are qualified for 30 year fixed conforming loan with interest about 6%. Our estimated monthly payment (mortgage payment, HOA, Tax, home insurance) should be around $3,600 which is about half of our monthly income. We still have a little money in the bank to afford living in the house+expense in case both of us out of work for a year. We plan to live in this house for at least 5 years.





Do you think I am making a risky move?

What do you think of the deal.



Thanks for your input.
 
<em>"Do you think I am making a risky move?"</em>





Yes and no. The financing you have selected is the proper financing, however your debt-to-income ratio is too high, and it puts you at risk for default. Hopefully, you will see an increase in wages over time which will reduce your DTI, but this is not certain.





If your definition of risk is whether or not the property will decline in value, then your move was risky because the value of the property will likely decline over the next few years. If this is a property you will be comfortable living in for the next 10 years until prices come back, then you will be OK.
 
Not a bad deal for today, but wait another year and you could have that place for $435k, or a much bigger place for $535k. You price is similar to what I would like to spend, and despite the fact that we are <strong><em>dying</em></strong> to buy a home (see knifecatching icon), Irvine Renter and friends have convinced me to wait for 2 years in a row now. Cortile is fine, but I'm thinking that something like JLH Stonetree will be in our crosshairs at the mid-5's by late 2009.
 
I gave you a very conservative number on our income. As of now, I make about $5,400K after tax + 3,800K after tax from my wife. We do get about 30K per year in bonus. So with tax break on the house and our kid, we hope to get back around 1K a month. Do you think my debt-to-income ratio is still high?



Yes, my wife and I plan to stay in this house at least 5 years.
 
If the numbers you provided were after-tax, then you will be fine. Debt-to-income ratios are computed from the gross, and when you said you were paying half your income, I thought you were referring to the gross not the net.
 
<p>Don't want to be a bubble burster...but...</p>

<p>MY estimated value of the Woodbury area condos is mid-low $300K's by 2010... </p>

<p>The price reductions you've seen SO FAR in the Irvine are are the literal 'tip of the iceberg'. The SFR homes are now showing up at drastically reduced prices in the Irvine/Tustin/Tustin Ranch area. I just looked at one last weekend... next door to the marketplace, 1700 sq/ft, 3bed/2bath, nice, upgraded, large front yard, large back yard... $440K REO.</p>

<p>That would put condo values in that area (if you found one with similar size, bed/bath) at least $100K lower, if not more.</p>

<p>The MLS listings are not reflecting the true destruction yet. WAYYYY to many people 'wishing' for their place to sell at their marketed price. They aren't moving, of course.</p>

<p>All this being said, a home is NOT an investment. If you like it, and can afford it, why not? Just don't be surprised when you are underwater on it 5 years from now. Stay for another 5 after that and you should be fine.</p>

<p>My $.02.</p>
 
Assuming the unit is around 1250 sq. ft., you can rent the same 3 bedroom unit in an IAC for around $2300. Why are you going to spend an extra $1300 per month ? You do realize that the place you are purchasing will most likely be worth around $300,000 after 5 more years............



I would say that you are making a huge mistake........
 
I just checked and you can rent 3 bd/2baths in Northwood and Woodbury for under 2500 a month. Do you need a 3 bd room right now? Why not check out Woodbury place townhome rentals by the Irvine Co.?





You'd easily save $1,100-$1,300 a month by renting for a year. That's nearly 15k saved in a year. You would be looking at a mortgage of 428k and over the next 12 months you'll pay $25,537 in interest. Assuming your tax rate is 28% your actual tax break would only be $7,150 a year.





You will save DOUBLE the money in rental payments than your mortgage tax deduction. Cancel the contract and rent in Woodbury if only for another 12 months. You'll save some serious coin, not to mention earn interest on the money that would be your down payment. The worst mistake people make is using a baby as an excuse to buy. First of all, the baby's crib will probably be in your room for the next 12 months anyways. A baby is a big enough burden as it is, don't drown yourself in mortgage debt.
 
CMIYC<em> -</em> i would welcome you to my neighborhood but quite honestly i hope i won't have to. stay put and rent like everyone has recommended.


and if you've really got your heart set on the cortile plan 3, i guarantee you will find it for much lower $3600/mo. one of my neighbors is also a friend and rented out their plan 3, and i act as sort of the defacto prop mgr for my friend. i collect the rent each month so believe me when i say you could live in that same house for $2700/mo.





<em>So with tax break on the house and our kid, we hope to get back around 1K a month.</em>


<em>


</em>this should be a non-factor although i hear this WAY too often. it's like spending money so you can take advantage of a coupon. also, any of the parents here want to share how much money your kids <em>save</em> you? does your budgeting also account for your wife perhaps not continuing to work and 9 months from now you will now have a mortgage and a child to carry with only your income?
 
We actually checked out at least 20 condos (most of them are attached) in Irvine, Tustin Market Place area.

Price ranges are between $450k up to $600k. And for those around 450k, there's not even a patio and the condos are literally on top of a bunch of garages.
 
<p><em>"So with tax break on the house and our kid, we hope to get back around 1K a month."</em></p>

<p>The house and child deduction will offer some tax relief but if your wife continues to work you are looking at $1K/mo minimum in childcare if your wife works after the baby arrives (unless you can rely on family for childcare). And this figure is for childcare... kids are expensive as I am sure you have heard. Childcare alone for our two kids is our single biggest monthly expense. </p>

<p>Nevertheless, congratulations on the house and upcoming baby.</p>
 
Kids don't know the difference between a rental and a home. Our 4 year old likes her IAC townhouse better than the homes of her little girlfriends who live in ridiculous mansions in Crystal Cove. I agree with LM, we lived in a 2 bedroom until our daughter was almost 24 months, and did just fine.
 
<p>I would have to disagree with the bears' $300k price tag. Plan 3 Cortile will not drop down to that level at all. There are way too many other products below the Plan 3 Cortile segmentation like attached condos and townhomes. If I were to allow for a 5k price difference in price for the 32 sequential plans below this home we would be looking at the entry level condo flats priced at $140,000. That is not going to happen when that price tag equates to 1.5 million/acre for the land cost assuming the condo flats are at 28 units per acre. </p>

<p>IMO 300k is not realistic and the Rapture will arrive before it. You should be ok with your purchase Leo but I think you will find a better deal with an older home from the 70's with a big yard that can takes the swing set.</p>
 
<p>Catchmeif youcan,</p>

<p>If you have really checked out '20 condos' in the irvine area, and you are only finding garbageboxes that are in that price range, you need a new realtor!</p>

<p>There are many REO's that are on or soon-to-be-on the market in that area priced WAY below what you are quoting here. You are looking exclusively at 'wishing price' homes.</p>

<p>Maybe your realtor is only showing you the spots with the big 3-5% commission to the buyer's realtor???</p>

<p>I'll repeat, you can get a nice SFR with a big yard for mid-400's around that area now. Time to expand your search!</p>

<p>And the prices are ONLY going to go down from here. REALLY, REALLY far down. Stop by the little shopping center across from Woodbury. Notice how it's like a ghosttown? Think about it.</p>
 
Masterofdamoney,





I commented on the phenomenon you have noticed in a post from last week <a title="Permanent Link to Inventory Panic" rel="bookmark" href="http://www.irvinehousingblog.com/2008/03/25/inventory-panic/">Inventory Panic. </a>There are a great many REOs that are not listed on the MLS, and when they hit the market, something bad is going to happen.





I question whether or not these will hit $300K. The rents are too high. I could easily see them dropping into the $300s, but not all the way to $300K.
 
If you have 20% down wait. You are going to be one of the few who will get the best deals. I think your DTI is a bit high at 50%. I think it will also be at least $100K less in two years. Why lose all that money you saved?? Trust me I want to buy too!! It's hard to wait, but I beleive in this site!! In 5 years when you want to move you will be negative.
 
<p>Congrats on the baby catchme. I think you are nuts buying into an area for over $400/sf that is going to be destroyed by foreclosures. Check this out:</p>

<p><a href="http://www.ipoplaya.com/woodbury0404.jpg"><img alt="" src="http://www.ipoplaya.com/woodbury0404.jpg" /></a></p>

<p>That's a lot of preforeclosure activity and its probably only started to gear up in Woodbury. Take it from a Cal Pac condo owner, REOs will kill your value/equity. If you buy, plan on having that equity gone lickity split. I understand you'll be there for a while, but that Cortile unit will probably fall to $375Kish at bottom. Even with a 5% year-over-year appreciation rate after that, it won't be until 2018 until you are back over your purchase price. Going to have another child? Tough to squeeze two kids into a 1300sf Cal Pac condo. I have two young ones and my 1622sf feels very tight already.</p>

<p><a href="http://www.redfin.com/stingray/do/printable-listing?listing-id=1543746">This one</a>, which is also built by Cal Pac but 400sf bigger, will sell for $540K or so.</p>

<p>You could pick <a href="http://www.redfin.com/stingray/do/printable-listing?listing-id=1558164">this one</a> up, also a Cal Pac unit, also 400sf bigger, for $575K mostly likely, maybe less if your realtor kicked you back 2%, and its in guard-gated Northpark.</p>

<p>A 30-year conforming at 6% isn't a very good deal in the current market IMO:</p>

<p><a href="http://www.mtgcapital.com/ratesheet-fixed.html?state=ca&rs=fixed&p=1">http://www.mtgcapital.com/ratesheet-fixed.html?state=ca&rs=fixed&p=1</a></p>

<p>In your situation, I can see no good reason to buy, and especially buy in an area that has not come down as much yet. Woodbury has been holding up well, mostly as a result of fewer foreclosures, but that time is coming to an end soon. If you have to buy, buy a place that has already been beat up more by the REOs.</p>
 
Friggin' IR, he gets in your head, starts messing with your brain cells... What the heck am I doing trying to talk someone out of buying?! I'm supposed to be knife-catcher #1!!!
 
You must log in or register to reply here.
Back
Top