San Diego Housing Bubble News and Analysis

The way I see it, he's saying that as more and more bottom fisherman comes in, we'll see a slow down in decline. It doesn't mean that we're at a bottom, but it would be near. Also, you can just paint San Diego in a single stroke. Places like Mira Mesa is drastically different than Carmel Valley when buying as investment or if you use rent as your benchmark for reasonable pricing. Also, you cannot count out soft landing offset by increase in inflation. Only time will tell how this will play out. We all are just trying to read the tea leaves and bottom fisher, sale volume, and inventory are just some of the indicator.

It doesn't mean we are at a bottom. It means there are "bottom" like opportunities out there for certain types of buyers.Usually buyers who actually have some talent at speculating, who bring a lot of cash and/or a tool belt and/or are willing to buy in less desirable areas and are not job stability concious in their aquisitions. These opportunites increasingly are including parts of this region for those with bottom feeder propensities, who don't believe in any near future end of the world scenarios.

Bottom feeders get going while other bubble concious, future buyers are still waiting for something which meets higher expectations to also meet their pricing and other concerns like job stability and zero tolerance for depreciation risks.

As I understand it, the dynamic duo of Case and Shiller have never believed we were going to have a depression so it makes sense that they would observe this activity, recognize it for what it is, and have something to say about it.

There is also another group that is buying. They are just glad that much of the downside risk is gone. They are not bottom timers and they know it.

I don't think anyone is saying that we are at, or chronologically speaking, even near an official bottom.

I think Rustico nailed it. This market makes sense for two types of buyers. The first are investors working deals, buying low-end properties from banks or distressed sellers. The other are folks who have concluded that after a 25% slide, they have evaded the bulk of the down-side risk and are sick of renting or hearing their significant other complain about renting.

Or, we may be seeing the bottom in some areas while others are still topping out.

So all these investors pick up distressed properties, what do they do? They try to rent them out.

What happens to rents? What happens to the price/rent calculations? What happens to investment demand in residential RE?

This should be interesting.

I would say most of these so called bottom fishers/investors . would be looking to fix (a little) and rent, even if losing a little money for the first few years.

And of course does not apply in all area's, the Temecula area is a prime example. Say you pick up a 2500 to 3000 sqf decent house in a decent area for say about 300K .

20% down, maybe 1600.00 a month coming back (OK you are still losing money), But in ten years that house will in all likelihood fetch about 600K. and is also a hedge against inflation IMO .

Say what you want , but at some point you either get on the Farris wheel or get out of line and give someone else your ticket.
Good luck.

Sdduuuude nailed it.

Investments certainly look good in some areas right now, based on inflated rents. But lots of inventory is being kept off the market by banks and FBs trying to hold on until "the market gets better." What happens to rents and prices when that inventory is finally released onto the market?

A recession/depression is still not being priced in, nor is a decrease in rent or further decay in the lower-end neighborhoods. Crime will rise, rents will fall; and what seems like a good deal today will probably look foolish next year and the year after that.

I still stand by my 2012 bottom, at best. Time will tell.