How much should I pay to purchase an one bedroom / one bath condo in Santa Monica.?
Answer:
Not sure about the real estate condition in Santa Monica. This answer applies to general situation.
As the housing market slump, appreciation probably won't occur in near term (6 months to 2 years). If there is no appreciation, then you can determine the true value of a property by comparing to revenue that property can bring in to bonds or CDs (30 year bonds are returning 5%). You can also compare your mortgage payment with comparable rent.
Of course, there is a premium for owning. In the past few years, people pay 25% to 35% extra to own because properties appreciate fast. Now, it really depends on how much you like that condo.
$650,000
$325,000.
$299,000
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