San Diego Housing Bubble News and Analysis

Chris,
I am by no means an expert but here's my uneducated take on Vista. If you were looking for someone to find you a place there I tell you to find someone else. With that said, here's what I know. The areas you would be interested in are in 92084 in the Northeast corner of the zip. You could likely find property to meet all you requirements and because of the elevation I believe you could get a much better view than in RSF or Olivenhain. Also, even by San Diego standards Vista has phenomenal weather perhaps the best in the county. The area and topography are absolutely beautiful and it is relatively undeveloped. Vista Valley is a very nice private golf club also.

The downsides are that even though you are far enough away from the rough areas you likely need to drive through them to get to and from the 78. Shopping is limited and finding even a 3-star dining experience is probably 20-30 minutes or more away. Schools are also an issue and I dont know if there are good private options nearby. I dont know that ther is much of a community feeling there and I dont think there is alot of history other than Ranchos. If riding academies are a concern, you might not find many there either.

Based upon what you mentioned that you sold your preivous property for you could find what you are looking for in Olivenhain (which I know very well) today which is close to everything (beach, restaurants, shopping, riding trails/academies, healthcare and quality schools) and has a great community with a rich history. In a few years it should be less. Personally, I would feel very isolated in Vista but that may be appealing to you.

Best of Luck.

Chris Johnston

Thanks sdr, just the type of comments I was looking for. Schools do not matter because we do not have any kids. I have done some checking on crime, and itleast by the numbers it is very low. The isolation kind of goes with the territory for ranch property I think, so that is ok because it is not too far off the beaten path. Sounds like it is itleast worth checking into, maybe we wind up in Olivenhain after all. My wife does not like Olivenhain for some reason, she is afraid progress will result in alot of the horse properties being eliminated over time. That has happened to some areas up here in OC.

I am not in a great hurry, but you never know what you will run into.

Chris,
Much of Olivenhain has 2 acre minimum lot size zoning which wont change. Another area you might really like is the Elfin Forest which is just east of Olivenhain. Much of it is unicorporated and in the county. Minimum lots sizes can be even larger out there and it is even less likely to be developed than Olivenhain and can be quite a bit cheaper. I'll try to find an mls # to post if there is anything for sale there so you can get an idea of what its about and where it is.

SDR

Here's one. MLS#061061373 that you should be able to look up on Realtor.com. Its quite overpriced even in todays market and it is tough to spend much more than $2M there even for something spectacular on 5 acres. There are smaller older homes there on 5 acres with horse facilities today for about $1M. It is a real unique situation as it has an Escondido Zip Code, most parts are in the RSF school district and it is under the Encinitas sphere of influence for many governmental issues even though it is in an unicorporated portion of the county. Check the area out on google earth. Tis very very rural!

Thanks sdrealtor I have never heard of this place. Sounds like a neat place to take a hike.

Chris Johnston

Thanks sdr, great info!!!!!!!!!!!

Yup, I think the Elfin Forest area is a good alternative to Vista. You can also check out Bonsall - there's lots of horse properties out there and the path of development won't change that.

Chris Johnston

Thanks Bugs. I also want an ocean view, so I am asking alot. Do any of these other places have that? I was thinking Bonsall was aways inland? Unfortunately, you see the battle that goes on in my household. I want the ocean view, my wife wants to have our horses on our own property instead of separate like they are currently. It is a tough mix, with the Carpinterias of the world being on the list. However, the prices up there are really high, Diego area is much cheaper. I may just wait for the drop, buy another ocean view place and have the horses be separate again, but I thought I would use this down cycle to check some alternatives out.

Thanks for the input.

I might have something for you - check out the road called Blue Bird Canyon Trail off Buena Creek. If you want rural, it's worth a look - there's nothing between you and the hills.

We preparing a house for sale right now, and it'll be ready in a few days to look at. Email me for more details.

jim [at] jimklinge [dot] com

Jim the Realtor

Cardiff baseball
Ther is a great trail about 1 mile up of switchbacks. People actually mountainbike up it. At the top is a beautiful meadow and the resevoir that was created when they built a dam several years ago.

Its fabulous and only about 15 to 20 minutes away from where you live.

Chris,
I believe ocean views might be possible in the Elfin Forest and great surfing is only 15 to 20 minutes away if thats important.

Jim
You are really barking up the wrong tree if you think you could sell even the absoltely perfect house to Chris in this market. He is clearly a calculating technician when it comes to investments and not an emotional buyer. To his credit he pciked the cherry off the top of the home price sundae and I have no doubt he'll do it again. He's defintely my kind of guy!

SDR

Hmmm, posturing between agents? Isn't getting the absolutely perfect house everyone's goal?

I'm sorry if you thought I was posturing. I wasnt. At the very beginnng of the thread Chris stated upfront that he has no intention of doing anything anytime soon. From what I know about him after reading his posts and his blog he is a very skilled market timer that makes decisions when he see's clear and convincing signs to do so. Those signs are very very very likely to be at least a couple years away. Even if he found the perfect house, I believe he is an unemotional decision maker that would still wait for a better time as he has the assets to get what he wants today and even more than wants tommorrow. When I said he's my kind of guy, I meant people like him are my favorite clients to work for. He isnt my client and I wasnt nor have I ever postured to get clients from this board. Just not my style!

Personally, I doubt more than 50% of the people on this board will ever buy a home in SD.

Sorry, I (mostly) meant it in jest. FWIW, I like the style of the both of you. It sure beats getting the occasion mails from agents with comments like "It appears as if the market is starting to turn - ever so slightly. Business is noticably picking up for buyer's brokers like myself." It also beats the insistency that I am helped on things like job searches and relocations. The more realtors want to be my best friend or try to paint a rosy picture, the less likely I'll trust them to do what's in my best interest in the RE market. I am still planning to be in the 50% that buys, but it sure scares the heck out of me. :)

I'm in that 50% as well, so now there's at least two of us. So far we're at 100% with a score of 2-0.

Also, I wouldn't fault Chris (or anyone for that matter) for buying property in the near term. Just because it doesn't make sense for most people to buy now (at least according to most of us here), doesn't mean that it's not right for some depending upon their personal circumstances.

I mean, heck sdr, I think you're one of the big believers in that premise anyway.

I wouldnt fault him either I just dont think he's anywhere close to seeing what he needs to see to be ready based upon my very limited knowledge of what makes him tick.

Also, I said 50% won't not 50% aren't planning on it. I remember back to when i bought by first place in SD. It was about 1 year from the absolute bottom of the market (all luck by the way) and it was still very very scary. For the price that I paid for a 1300 sq ft townhome, I could have bought a 2800 sq ft home on a 1/2 acre in an area more upscale then I live in now and where incomes were significantly higher (i.e. avg income over $100K). I dont believe it will ever "make sense" to buy here and that it will always take a bit of a leap of faith.

I think if you're operating in a market with a lot of emotion, hype, urgency, etc, then yes, you have to use a leap of faith to decide if you want to join in. But in a market that is grounded in fundamentals (supply and demand) and with less funny-money floating around, then I think the decision can be less of faith and more of sound economics. That's my hope anyway. Dream on, right?

I too won't buy until I see a very compelling reason. I'm leaning towards an old teardown/renovation type house. However, right now, the old houses are selling for the same price, or more than newer ones. Would not make sense to put too much money in an old junker (despite the location, location, location).

I'm not looking for a point where rent equals buy, but I'm looking for a time when I feel the prices have stopped their downward slide.

Chris Johnston

Thanks to everyone for their input. SDR - you are right about me in the way I analyze things. I am having a hard time valuing something I looked at today, the value seems very reasonable to me. However, as out of whack as everything is, it is hard to believe that anything is a reasonable deal at the moment.

sdr- I should have included a winkey smiley with my comment as I figured that was just your assessment of where Chris might be. I knew you weren't contradicting yourself.

I am interested in your 50% won't versus 50% planning perspective though. I guess I'm technically in the planning stage myself, but I truly do intend to buy again. I feel like the only thing that would stop that from happening would be for us to leave San Diego.

Do you have other reasons why you think planners might not become buyers? I mean if it's the leap thing, I agree with you, but that's always been the case.

Have a friend selling a great 2 acre horse lot on 'West Lilac and Talesin Way' in Bonsall. He understands market condition, he's interested in selling and has some equity... you might be able to work a deal.. the property backs up to Vessels Ranch.

If you drive up West lilac to Talesin Way you should see a sign.. if not, go down Talesein it's vacant lot on bottom left with stream running through it.

this might be it, i can't tell for sure

PC: Yes. I'm finding these older home owners being amazingly greedy.

Chris Johnston

When looking at homes it is amazing when you see an older one that has not been updated in any way and needs a complete overhaul, and then see a deep into seven figures asking price. These are the types of things that make me think prices must fall a good amount. Sometimes when you look at something newer with granite, nice floors, etc.. it least it seems like it has some value. People throw around asking prices of 1 to 2 Million like it is nothing, which blows me away. It does seem that you ought to get something other than just 80 degrees on X-Mas day for that much money.

A realtor yesterday babysat my complete walk through the house I visited, pointing out every little thing trying to sell me. I finally told her when she was pointing out some built ins within the dining area, and discussing how wonderful they were, that I would tear them out. I think she got the point, and stopped coaching me. It did make me feel though that she was desperate to sell the home, she effectively lowered whatever I would offer if anything by over selling.

Chris,
Just a word of caution, evaluate the asset on its own merits not the salespersons motivation. A hungry stock broker pushing a stock does not change the underlying value of the asset just as a hungry Realtor doesn't lower the value of the home.

SDR

Chris Johnston

Good words sdr, I am trying to do that now. It seems so cheap compared to up here, it would be an absolute steal where I live, so I have to cleanse my mind of that baggage. I think no matter how well something is bought right now, it will decline in value over the next few years. That is ok by me as long as I do not overpay at the time of the decision. All I can ever do is make the best decision that I can weighing all the facts at the time of the decision. I do not mind missing by 100k, but I do not want to miss by 500k on a purchase.

Some properties just do not exist in abundance, so even in a huge slump, they may not be for sale even at a lower price. Thanks again to all, this type of exchange is what makes this blog great. I will let everyone know if I do anything, which I may not.

Good Luck Chris! Its my pleasure to help. The most valuable advice I could give you or anyone is that while prices may not actually decline much more, the risk of them climbing rapidly is almost nil (i.e. some downside risk but virtually no upside risk).

In RE you are always making decisions based upon a snapshot of limited information and there is no way to know what will come on the market tommorrow. Take the time to educate yourself on the various areas you think you might like and do your best to find exactly what you want. In the long run, the return will be much higher and more important in terms of happiness with where you are than how much your home is worth.

Right. It also seems like right now, if nothing else, absolutely don't "settle". If a property doesn't offer exactly what you need (or you can't make it that way while preserving the economics of the deal), keep looking.