Excerpts from Eric’s article at nctimes.com:

Last year, at age 37, electrician Fred Boyd and his wife ended years of renting in Orange County and bought their family a three-bedroom house in Oceanside about seven miles from the beach.

“Home values have come down, and the loan rates have been pretty reasonable,” he said. “And what you’re able to buy down here, compared to what you’d be able to buy up there, it’s in a lot nicer of an area.”

Boyd could hardly have picked a better time.

Mortgage payments —- the single most important factor for many homebuyers —- have fallen to historical lows in many neighborhoods, driven down by falling prices and the lowest interest rates in generations. Indeed, families can buy a house for less than it costs to rent one in some places.

In Oceanside, the Boyds’ new hometown, the mortgage for a median-priced house last year cost $1,366 a month, 19 percent less than the 30-year median payment and the lowest, in inflation-adjusted terms, since 1995.

Similar discounts abound in the region, according to a North County Times analysis of county records and federal financial data.

A loan payment on a median-priced house in North San Diego County in 2010 was $1,879, slightly higher than 2009, but otherwise the lowest since the mid-1990s in 2010 dollars —- and lower than most of the 1980s, when 15 percent interest rates made payments expensive.

Together with low prices, “the fall in interest rates in recent years has contributed mightily to affordability,” said Chris Thornberg, an economist with Beacon Economics in Los Angeles.

But prices in some of the toniest neighborhoods, like those in Encinitas and Del Mar, are still higher than historical norms, wiping out the benefits of low interest rates.

“It’s your neighbors you’re paying for,” Thornberg said. “A lot of people are spending a lot of money to be in the ritzy neighborhood because it’s in a ritzy neighborhood.”

It’s not easy to close a deal in today’s market. Buyers need excellent credit, and even then, qualified buyers may not get the mortgages they need, real estate agents said. The mix of houses available in today’s market is dominated by bank-owned homes and those sold by borrowers for less than they owe, a complicated deal called a short sale that can take months.

But that didn’t stop James and Kim Maciariello from buying a short-sale condo in Oceanside.

“It’s definitely a good time,” James Maciariello said. “It seems to have been slowly getting to be a better situation for buyers in general, since we started looking seriously two years ago. This area is one we can both envision ourselves settling down in.”

The Maciariellos fell for Oceanside in 2007 while scouting locations for their wedding. They rented a place three blocks from the beach before they found the condo they closed on last month.

The Maciariellos may be leading a trend, said economist Nathan Moeder of the London Group. In the past 30 years, developers have been working their way up the coast, from La Jolla to Carmel Valley, Del Mar, Encinitas and Carlsbad, each city in turn becoming substantially more expensive.

“Based on patterns of growth, the next logical places are Carlsbad and Oceanside,” Moeder said. “If you’re going to buy in Oceanside, you might have to wait a little bit longer than Carlsbad, but if you’re looking to be in San Diego and establish roots and be there 10, 20 years, Oceanside might be a good value place.”

Oceanside borrowers watched lenders take back 1,270 houses in 2008, though in 2010 that number had fallen 66 percent to 413, according to foreclosure data firm ForeclosureRadar. Escondido peaked with 1,971 foreclosures in 2008, and in 2010 that fell to 611. In Temecula, lenders foreclosed on 1,397 houses in 2008, and in 2010 that number fell to 963, a still-high figure that may account for the continued low prices in the area.

All those people who have been foreclosed in the past three years —- 55,809 in North San Diego and Southwest Riverside counties since 2007 —- still need a place to live, so they rent.

North San Diego County apartment rents have held steady even as house prices plummeted between 2007 and 2010, staying around $1,300 for an average-sized apartment, according to MarketPointe Realty Advisors.

House rentals are also in high demand.

In recent months, Gwynne Hodge, a property manager in Carlsbad, said she has received more applications to rent her properties, and she has conducted more showings. Ned Paterson, a Carlsbad property manager with 450 houses and condos to rent, said his vacancy rate is down to 2.7 percent. Five percent is considered a landlord’s market, he said.

“My clients are anticipating being able to give out rent increases this summer where they haven’t the last couple years.” Paterson said.

Nonetheless, the listings at Golden Key Properties Inc., Paterson’s property management firm, show a three-bedroom, two-bathroom house in Oceanside that rents for $1,750 a month. While the potential sale price of that house is difficult to determine, that rent is $364 more than the cost of a mortgage on a median-priced house in the same city in 2010.

No one knows how long prices will stay low. Whitehead, the Coldwell Banker manager in Southwest County, said a switch flipped in his office, and buyers are suddenly out in force.

Then again, several economists and real estate agents made the point that people should buy houses to live in, not to invest in, and they should expect to spend years living in their houses before prices start to rebound. And the short term might get ugly.

“What interest rates give, they can take away,” Thornberg said. “Our housing market is very interest-rate-dependent. A spike in interest rates could kill the market.”