7796 Hemphill Dr in Mira Mesa, Hopeless Listing

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Submitted by jimmyle on November 20, 2007 - 12:34am

This house is 100 feet from my mother-in-law's house and some body paid $495K for in in 2005. Eventhough it was built in 1983, it is in a horrible condition. It still has the old wooden garage door. The roof needs replacement, the walls of the house all cracked up. Right now the owner is listing it at $429K and there is no hope of selling it at this price.

I wouldn't buy this house at $329K because I think you probably have to put in at least $70K to make it livable and I rather spend the $400K to buy a 1600+ sq ft newer house in New Salem area.

Submitted by genericmf on December 18, 2007 - 1:59pm.

After viewing this home last week, here is my take on the previous review.

This house is in the same condition as the surrounding neighborhood. It sits on a corner lot with a nice slopping front yard area. It is NOT "all cracked up" as jimmyle put it, but does show some age as do others on the street. It has a nicely saltillo tiled entryway with bench. The neighborhood seems to be mosty rental properties...a good area for such as it is in a lower to middle income type part of the city, with lower home values.

I'm sure this would make a great income property for an investor that is in it for the long term or for the first time home buyer who is willing to put in a bit of sweat equity.

Sure, it may need a newer type garage door (probably under $1000.00 and an easy replacement), as do most in the neighborhood. The roof appears to be fine with no leaks. It has a nice brick, gas fireplace, marble flooring in the entryway, kitchen and dining room, ceramic tiles in the bathrooms, a "media" style room in the garage, and a built in bbq on the brick patio.

Other than the garage door replacement, the only real expense would be cosmetic things such as paint, carpet, new window treatments, partial fence replacement in the back yard, and re-seeding the yard. I can't see having to spend more than $5-10k in improvements to make this home "livable".

This house is a good value and doesn't deserve the scathing review it received from jimmyle, which, btw, I'd like to hear just how he'd spend that $70K!

Submitted by an on December 18, 2007 - 2:17pm.

This house is a good value and doesn't deserve the scathing review it received from jimmyle...
It's listing at $389,000 - $429,000 now, so the market seems to disagree that it's a good value. Even @ $389k, you're talking about $303/sq-ft. That's hardly good value, especially in MM, where you have 8361 CALLE MORELOS SD - Mira Mesa, 92126 @ $228/sq-ft and 10975 PARKDALE AVE SD - Mira Mesa, 92126 @ $256/sq-ft. Those are not selling either at those price, btw. So the market say even those are not good value. @ $228/sq-ft, with this house, you're talking about $292k.

Submitted by HLS on December 18, 2007 - 2:22pm.

Jimmy, if you make $80K+ a year and have a down payment of $80,000+, and have a credit score above 680, and can document your income, you MIGHT be able to get a really good loan on that New Salem house these days.

How much do you think Hemphill will rent for ?
Mutiply the monthly rent x 125 and that's what the house is really worth AFTER it's been fixed up.

Submitted by an on December 18, 2007 - 2:27pm.

This house should fetch around $1500-$1700 depend on the time it goes on the market, the condition of the house, etc. With 125 multiple, you're looking @ $187k-$212k. That's 50% below the current list price. :-).

Submitted by RatherOpinionated on December 18, 2007 - 2:30pm.

get your math straight asianautica. Is is $292,000 or is it $200,000.

We all have calculators.

Submitted by Dukehorn on December 18, 2007 - 2:37pm.

You might have a calculator RO, but your lack of reading comprehension comes through again.

AN said that @$228/ft, which is the "market rate" based on other homes for sale, the price should be $292k.

He then, in a separate post, stated based on the rental income stream, that the house needs to be priced in $200k region.

Not too hard to figure out if you actually read his posts.

Submitted by an on December 18, 2007 - 2:46pm.

We all have calculators.
Having a calculator doesn't mean you know how to read. Here's a little help... my second post was in response to HLS post right above it. Which mentioned the rent x 125 multiple.

Submitted by HLS on December 18, 2007 - 2:54pm.

Wake me up if the listing price gets to $200K, and I might put an offer in at $187K.

If someone else wants to buy it before then, just let me sleep. No need to fight with anyone over it. They can have it.

In the late 80's there were plenty of local properties that were available for a similar multiple. It was no big deal, and being a landlord was not as popular as it is today.

Getting financing was the issue, not the house price.
It needs to get back to that reality.

Submitted by barnaby33 on December 18, 2007 - 8:48pm.

if you make $80K+ a year and have a down payment of $80,000+, and have a credit score above 680, and can document your income, you MIGHT be able to get a really good loan on that New Salem house these days.

Holy shit that was funny. If I make 80k a year and have 80k for a down payment, why the f#$%k would I want to live in a lower middle income part of Mira Mesa? This is exactly the kind of vapid boosterism that got us where we are. The whole point of making that kind of money (which if you make it means you most likely worked for it), is that you shouldn't have to live in a place like Mira Mesa. 80k pretty much puts you in the top 20% of the income bracket, for a family, let alone an individual.

80k income and 80k down payment should at least get you Clairemont (BayHo not CrackHo.) PB or OB should definitely be options. Yeah lets all buy 600k starter homes in Temecula, cuz its a place to start!

Josh

Submitted by DWCAP on December 18, 2007 - 11:07pm.

HLS, you stated earlier that you multiply the monthly rent a place would rent for by 125 and that is the real value of the property. What is the rational behind that? Is there some kinda math or historical norm that relates to this number? If you multiply the current rents in this area, you get a number that is WAY lower than anything in this area. Like 50% reduction from todays prics. That seems like alot, considering that MM has fallen more than most other areas in this area. For the place I rent, it would be ~200000, but I am sure it would be listed right now for ~400000+.

Submitted by jimmyle on December 18, 2007 - 11:20pm.

Now I have changed my mind. I wouldn't buy this house at $300K.

Submitted by SD Realtor on December 18, 2007 - 11:22pm.

Josh contrary to your glowing assessment of Mira Mesa some people do actually like it there.

SD Realtor

Submitted by barnaby33 on December 18, 2007 - 11:42pm.

SD Realtor, I stand guilty as charged and playing the law of averages. Mira Mesa isn't my favorite place, but since I've worked there and lived around it, I know it reasonably well. It is NOT a ghetto, but it is solidly lower middle and middle income housing. Parts on the north and western sides are ok, the middle is mostly aging housing stock with large densely packed populations.

Now there is a reason why people pay more to live someplaces than others in San Diego. Is it the weather, partly. Is it the conveniences and architectures, yep partly that too. What most people really want to pay for though is a, "good neighborhood." What that means doesn't vary all that much, to the protestation of many. It generally means low density, well educated, higher income and good schools. I'm sure you can find plenty of people to say Mira Mesa is great, but I'd bet my last dollar that very few who make 80k and have a large pool of money to buy with would consider it a first, second or even third choice.

The sheer ludicrous-iosity of the statement helped to highlight how off the rails we got. I just latched on to that statement as a poster child if you will of how badly we have lost our bearings; how we had become so numb to the vast sums of money being spent, even wasted, to secure ourselves a home.

Sometimes my posts are hastily written, but not that one. I live in Northpark which in many ways is just like Mira Mesa. Its older housing, meant for lower middle income earners. Its near jobs and services, yet it is lacking in many ways. In short its a decent place to live, but not great. At what point though have you worked hard enough that you are entitled to more? At what point do you say, f#$%k that, I've worked to hard to settle for a 1971 tear down behind Fudruckers. I don't want 17 neighbor cars parked in front of my house, or alarms going off every night. I'd say at 80k a year and that much for a downpayment certainly justifies that sentiment.

So the correction continues, until balance is restored.

Josh

Submitted by DWCAP on December 18, 2007 - 11:43pm.

SD Realtor, why is it that some people seem so down on MM? I am kinda new to SD and dont know the facts. Jimmyle, you seem to have done your research, any reasons?

Submitted by SD Realtor on December 19, 2007 - 12:47am.

Josh I understand your point. Look, all I am trying to say is that some people enjoy living in communities that other people consider pieces of sh-t...

"At what point though have you worked hard enough that you are entitled to more?"

Come on now. This statement is bizarre. Nobody is entitled to anything, you know that. You want more house for your money? You want a nicer neighborhood, nicer schools, less density? Go move somewhere else. You want to live in one of the highest priced cities in the world to live in? Then that is where you choose to live. I do not agree that any amount of salary or money saved up "justifies" any sentiment at all. I am just as fed up as anyone that I cannot afford where I want to live. So I can leave town, or I can accept where I am at, or I can work two jobs, have a wife that works another, and bust ass to try to save alot of money. There are plenty of good neighborhoods in other cities that are much less expensive to live in.

Hey I am just as bitter as anyone here but I do not feel entitled to anything even though I work my ass off, have been fiscally responsible, and still am stuck renting.

SD Realtor

Submitted by SD Realtor on December 19, 2007 - 12:57am.

DWCAP everyone has thier own feelings about various neighborhoods. I don't know what to tell you.

I think that no matter where you want to live you need to learn about it first hand. What is suitable to some people is not suitable to others.

SD Realtor

Submitted by Eugene on December 19, 2007 - 2:17am.

80k pretty much puts you in the top 20% of the income bracket, for a family, let alone an individual.

Unfortunately 80k isn't what in used to be. 80k for a family is close to median in San Diego county. You need 130k to get into the top 20% of the income bracket.

If we just take year 1999 median incomes of homeowner households and inflate them into the present, we get something like this

50k = Logan Heights
70k = Encanto
80k = Mira Mesa
100k = UTC
110k = Tierrasanta, Encinitas
120k = RB or RP
130k = Scripps Ranch, La Jolla
145k = Carmel Valley

Keep in mind, back then 4S Ranch, Eastlake, and Del Sur didn't exist. Today we have more competition at the top.

Submitted by ucodegen on December 19, 2007 - 2:21am.

@esmith

Unfortunately 80k isn't what in used to be. 80k for a family is close to median in San Diego county. You need 130k to get into the top 20% of the income bracket.

60k = Encanto
80k = Mira Mesa
130k = Bay Ho or OB
140k = UTC
160k = PB

Where the heck are you getting those numbers? Last time I checked, around $60K was median. The RE agent and mortgage broker incomes skewed the median from 2003 to present, so we may be seeing a downward revision in the median for more current data.

http://www.muninetguide.com/states/calif...
shows $56k using 2000 numbers adjusted for inflation (like we are all keeping up with the Bernanke bubble)

http://www.city-data.com/zips/92126.html
Here is 2004 data... which would fit in line with 2000 numbers adjusted for inflation.

There are very few places that go over the $100K mark. I don't think PB is one of them.

Start here:
http://www.city-data.com/city/San-Diego-...
if you want to explore...

Submitted by Eugene on December 19, 2007 - 2:32am.

Note: edited my numbers to be more grounded in reality.

San Diego median household numbers are skewed downwards for two reasons. First, many wealthy people don't live in San Diego proper. Second, poorest families and households don't own homes. Median homeowner incomes are higher than median household incomes.

http://factfinder.census.gov/servlet/DTT...

Median owner-occupied household income for San Diego county in 2006 is $78,150.

Submitted by jimmyle on December 19, 2007 - 8:38am.

SD Realtor, why is it that some people seem so down on MM? I am kinda new to SD and dont know the facts. Jimmyle, you seem to have done your research, any reasons?

Actually I live MM from 1995-99 while I was going to UCSD, I went back to OC and now back to MM again. I would say this is mainly a blue collar neighborhood and because of the high cost of housing in the area, probably more people live in one household than the US average. You tend to see lots of car park in the street. One thing I don't like it here is that many people don't maintain their front yards. My car got broken into once here. Schools are slightly better than the state average.

The North-West area of Mira Mesa is newer and mostly Middle class. It feels less crowded.

Previously I was thinking about buying a home here but the recent price decline enabled me to look else (Rancho Penaquitos, Scripps Ranch, and perhaps Carmel Valley) mainly because I want better schools for my children.

Submitted by HLS on December 19, 2007 - 10:33am.

HLS, you stated earlier that you multiply the monthly rent a place would rent for by 125 and that is the real value of the property. What is the rational behind that? 

If you multiply the current rents in this area, you get a number that is WAY lower than anything in this area. Like 50% reduction from todays prices.

DWC, it's just a common sense generalization. I'm not saying that values will drop 50% further, but they could.

If looking for a reasonable investment that will pencil out, without needing appreciation to have it make sense, it's just a rough number.

There are plenty of places in the country where you can buy for closer to 100X monthly rent, esp multi units.

If I buy as an investment, I would like to see a return on my investment, not something that I need to support every month with additional cash.

It's also a generalization that if monthly rent is less than the price of the property divided by 150, you are better off renting, financially speaking.

To me, the reasonable rent in an area determines the true value of the property; the price of the property doesn't determine the reasonable rent.

There is a big difference between price and value.

Submitted by DWCAP on December 19, 2007 - 11:36am.

Thanks guys for your input. Just trying to wrap my brain around this market like everyone else. To put things in perspective, about the time of the last RE downturn in socal, I was realizing that girls arnt as bad as I use to think they were. I dont have the benifit of past experience, so I am gonna try to borrow some of yours. I hate buying anything I dont understand, I about drove my GF up a wall researching a computer last summer, and she likes electronics! (BTW not buying, but gotta learn sometime cause I will eventually)
HLS, I just needed to know how those numbers stacked up. I didnt believe there was formula for that kinda evaluation. Too easy if it was true. Thanks for the input though, puts a lot of the past pricing into picture. Plus I see no reason -50% isnt possible. We slip into even a small recession and ALOT of people will be hurting. Persons around my age have never known true financial pain.
As for the general tone of the market that I see posted on so many other threads with a sine wave of what people are feeling about real estate, I have to say that I think the article yesterday in the UT changed alot of people from denial to fear. I mostly know potential buyers, but even some fire victoms I know kinda opened up their eyes last night and realized that maybe it is better to rent for a while. The UT had another artical today for all those who missed it yesterday, or wrote it off as "just bad press". Itll be interesting to watch how people react.

Submitted by HLS on December 19, 2007 - 11:56am.

DWC,
Plenty of people have bought real estate (and stocks) without really understanding the fundamentals, and have STILL made money.

Was it luck, skill, intelligence or stupidity ? (I'll let you decide) You can make money by making "stupid" decisions.

Houses that I used to buy for $90K-$125K are $350K-$400K+ today. It's insane. The value ISN'T there.(The price is)

Even if I only think that they are worth $200K today, and never buy another one, that's OK with me. If someone else wants to pay $201 or 225 or 250, I don't care.

There are plenty of others that think like me. We aren't going to fight over these stucco boxes or get into bidding wars.

If enough people step up to the plate sooner rather than later, maybe prices won't drop as far as I think that they should.

Buying a rental in So Cal today is a gamble. Most are not going to pencil out for a long time. If someone wants to speculate, that's not investing IMO.

A boat is a hole in the water that you throw money into, an "investment" house shouldn't be one too.

Prices aren't cheap today, they are only cheaper than they were 2 years ago.

Most people have a false sense of security of what their home is worth today. In reality, it's virtually unsaleable at more than 80%-90% of what they think.

over 90% of what is currently listed in SD isn't selling, and thousands more have listings that have expired, and would still love to sell, but they can't.

Submitted by patientlywaiting on December 19, 2007 - 11:56am.

To add to HLS' comments, the rent multiplier would be even lower in Downtown San Diego where HOA is $500/month (or areas with mello roos).

I know someone who is renting a studio downtown that has carrying costs of $800/mo (HOA + property taxes only). The rent is $1,300. That leaves the condo owner only $500 to make the mortgage payment on $280,000. Interest only on that amount is $1400/mo. So the montly loss is $900/mo, not including vacancy.

My example is only a studio. Think of the more expensive properties. The losses are staggering and owners will have no choice but to give up unless the market recovers as they are praying for in 2008. Fat chance that will happen!!

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