All indications are that prices will continue to fall. However, I'm pointing out homes that are listed below similar ones on the market. That means that they are closer to the bottom than others. If they're priced right, they'll sell no matter what. If you buy to hold, and can cover the mortgage and monthly expenses with the rent, then you won't be affected. Otherwise, I would wait it out---but you have to watch the market daily and carefully because you want to buy at the bottom, of course, not as prices start to correct up.
The first property is the same model in the Lake Elsinore, CA, community of Canyon Hills as the one that I sold on a different street in 2005 for $405,000. This one is currently listed for $265,000. What a deal! We have another one in the development that rents for $1,795, with a long-term tenant. A quick search on the Press Enterprise site pulled up 20 ads right now for rentals in Lake Elsinore, although I didn't identify any in the development. Check it out.
List Price: $265,000
MLS #: T07155024
32033 Poppy Way, Lake Elsinore, CA 92532
Year Built: 2003
House size: 2,284 sq. feet
Lot size: 6,970 sq. feet
Type: Single Family Residence / detached
Gorgeous Canyon Hills Home combined with a GREAT PRICE! Winning Combination!! Spacious Bright and Open Floor Plan and Landscaped Backyard! A Must See!! Open Kitchen with Kitchen Nook, Pantry, and lots of Cabinet Space. Cozy Family Room with Fireplace and Ceiling Fan. Living Room and Dining Room Combination. Loft Upstairs currently used as a Workout Room can be 4th Bedroom. Spacious Master Bedroom with Ceiling Fan. Master Bath with Dual Sinks and Walk-in Closet. Window Blinds Throughout! Jr. High, Elementary Schools, and Retail Shopping Center conveniently located in the community. Grocery Store to be completed soon.
List Price: $199,000 (I would seriously low ball this one because the bank seems eager.)
MLS #: W07177831
13815 Navajo RD, APPLE VALLEY, CA 92307
Year Built: 2004
House size: 1,631 sq. feet
Lot size: 43,560 sq. feet
Type: Single Family Residence / detached
Bank owned! Acre fenced lot. Circular driveway. Tile roof. Rear covered patio. This home has an open floor plan. Rock fireplace in family room. Kitchen has tile counters, pantry and center island. Breakfast nook. Versatile extra room, could be formal living or dining room. Submit offers! ________________________________Surprisingly, Beaumont, CA, 92223 are still too high to consider. Can't get anything good for under $200,000 yet. If you're interested in this market, I would wait if I were you.
Let's move to Texas. I don't have an agent to recommend because of this, so you're on your own there. But I like Texas because in my research of many areas throughout the country (e.g., Georgia, North Carolina, Florida, Arizona, Utah, Idaho, Washington, Illinois, Oklahoma, New Mexico), the house prices in Texas are very low in comparison to the rent. Part of the reason is that there is no state tax, so the property taxes are very high--up to almost 3% in some areas, but you don't have to file state taxes (double check with your accountant to be sure, though). Also, hazard insurance is on the high side in some areas of Texas because of the hail that they experience. Still, break even, and maybe a small cash flow, are possible here.I pondered why it was that people still rent in Texas when the property prices are so low. Maybe it's because of the reasons that I listed above. Also, the wages are quite low there, too, in some industries, so I think that people have trouble saving for the down payment (although, a few years ago that didn't matter, did it?).
A search between $75,000 and $150,000 for homes at least 2,000 square feet, and not more than 10 years old, in McKinney, Texas, netted me 13 properties. Other good places to look are in Dallas, Austin, and Plano. Also, I am reasonably happy with our PM, who covers the Dallas-McKinney-Plano areas. E-mail me if you would like his contact info.
List Price: $134,000 (I would guess a rental income of between $1,200 to $1,300/month.)
MLS ID# 10909279
2509 Shady Grove Lane
Mckinney, TX 75071
3 Bed, 2.5 Bath
2,306 Sq. Ft.
Very nice 2 story home with 3 living areas* master suite upstairs* oversized lot* addendums required* please close at allegiance title in mckinney-hannah* no disclosure* no meditation* no option* no survey* download addenda from entries* pre qual letter or proof or funds plus copy of earnest money check required from offer* (Oh, yeah, they seem to be willing to work with the buyer.)
That's all I have time for right now--three properties for the third day of Christmas. If you have any good ones, please post a comment with as much pertinent information as possible, and the approximate rental income (investors should always double check this by looking up rental ads in the classifieds of the local papers and calling PM's in the area--although the latter approach isn't completely reliable because they want your business and may inflate the possible rent amounts).