San Diego Housing Market News and Analysis

SD Realtor

Thank you very much for your input.

I am sorry we did not get to meet the other night at Callahan's.

Hi Enorah -

Me too... I didn't get to meet many people at all and I wish I would have. For sure next time though.

I should clarify that the reason we did not meet is because I was not there. lol

SD Realtor

Very appriciate your inside views.

RB132, I am not an insider, just a realtor. It would not surprise me at all if sdrealtor, urbanrealtor, or Jim Klinge sees the same activity. I cannot speak for them though.

I will say that for sure anyone who is a serious buyer and has been putting in offers for homes this spring knows exactly what I am talking about.

Also this is not the case for million dollar homes and higher end stuff. That inventory is still catching up to the real world.

Like I said, grab a slurpee on the way to the beach and enjoy the spring. Let's see how things look in July.

Exactly what I am seeing and even more importantly EXACTLY what I told people to expect in my November post.

sdr

And this is coming from a guy that grabs that slurpee on the way to the beach all year long.

Oh Oh! Just became one of the statistics and purchased a house in
Carlsbad. Was it a great deal? Probably not, but it was exactly what we were looking for.

Congrats, JohnAZ. Please create some posts about the purchase as time goes on...it's always fun to hear.

And thanks for your perspective SD R and sdr...it is surprising how much interest there is in the SD housing market. Then again, maybe it's not surprising knowing the crap to quality ratio of the inventory.

In the bubble run-up the banks were kind enough with easy credit to anyone. Now we have a large number of people-- who are qualified by today's stricter loan and financial standards-- being kind to banks in return: these people are willing to go into decades of debt in order to purchase an immediately depreciating asset. Many have decried the bail-outs of banks; yet while the fed battles on the front line these people attack from the rear, armed with checkbooks! I hope it works out well for them and they don't in turn need bail-outs. I also hope it works out well for the banks. The thing that scares me is, regardless of how qualified you are financially, when your asset is worth X and you owe XY (where Y > 1) as Y increases there will come a point when any sane person would walk away, perhaps to buy a bigger, cheaper house next door. Even today's strict loan guidelines cannot prevent that.

Owners: maybe this is our last-chance rally! Should we sell? Hmmmmm...

If you don't/can't sell, take out the biggest HELOC you can, then walk. The American way. GAAA!

SD good post.

However, it is all a lie.

SD actually attacked me at Callahans and beat me over the head with a pint glass.

The whole time he just kept screaming BUY NOW! at me.

It was terrible.

My gorilla suit will never recover.

Honestly, this is one of the most lucid posts regarding price and strategy that I have seen on most any blog lately.

Well put Adam (especially for a HELPUSELL type). ;)

Seriously good points.

Of course my memory could be colored because my pint glass was filled with Powers Whiskey.

You ever see one of those overhead pictures off the coast of Florida in clear, shallow water where a large school of sharks are just circling around.

These are today's buyers (and past/present realtors).

I give them credit, they out smarted me - and I trust basically nobody and assume everyone is out to screw me.

I think it's time to become a pissed off shark.

The pain train is coming. More importantly, I say so.

Thanks for the post SD. It's great to hear this kind of sound reasoning from someone on the frontlines.

IOW, you should have bought two months ago. You've missed the bottom, the train has left the station, it's too late to buy. You might as well sit on the sidelines and enjoy the view.

At the rate this admin is spending, we just have to wait until the USD becomes like the Argentine peso...When it's $100USD to 1 yen or $100USD to 1 Yuan, or $10 USD to 1 peso, who cares if you still owe $500,000+ USD on a mortgage?, heh heh....

Thanks for the suggestions on bidding strategy. Might be a bit too ballsy for my tastes, but at least I'll know what I'm up against.

Sometimes it feels like something straight out of 2004. I just happened to drive past two open houses the other day and stopped by to look, even though both were obviously out of my price range.

The first one was downright creepy ... cookies, scented candles (warm apple pie, of course), meticulously upgraded, staged to perfection, attended by two perfectly coiffed Realtors(TM) who should probably lay off the salon tans. I kept looking around for the HGTV camera crew.

The second felt more like something out of "King of Cars" ... the Realtor(TM) started the conversation with "What kind of monthly payment are you looking at?" then launched into a mathematically questionable spiel about the huge tax benefits I could expect from the mortgage interest deduction. I managed to extricate myself from the jaws of "The Chopper" about the time he used his infallible intuition and years of experience to decide I was just a looky-loo (which I'd stated up front).

I've long since given up on anything that "shows well." I'll settle for a deal on something that is neither structurally unsound nor a long-term health hazard. But even that won't be easy to find :)

One strategy that works sometimes with the day late and dollar short syndrome is to write multiple offers site unseen,maybe 4 at a time, at the price the buyer would take the property if they like it...or at "what the hell" lowball terms. Each offer is presented with the caveat "Multiple offers being made and buyer can not possibly perform on all. Subject to buyer approval of property". Of course only certain buyer/realtor pairs are going to cooperate with a strategy like this, usually after some frustration but buyer motivation remains strong. Of course the slurpee at the beach sounds good too.

I would be reluctant to try, or suggest the strategy of overbidding and hoping for a low appraisal. I don't like it for many reasons.

Better than those candles is bake bread in the oven. You can get those small loaves in the frozen food section. Nothing beats that smell when you walk into an open house. Staging 101.

Moratorium by all the major banks comes off 2ND week in March and all hell will be unleashed in some serious pent up REO inventory. First they had the California laws enacted last summer, then the holiday freeze and finally the last moratorium all the banks agreed to until Obama releases his new "foreclosure prevention" plan. With the sheer number coming to market the overbidding will dry up real quick.

I find it interesting to read how negative everyone is on the housing market in
SD. As an outsider who has been looking for years and now has a chance,
it seems like a great time! I finally have a home with ocean veiws, near the rest of my family at not an outrageous price. I have a tangible asset that is not in the stock market. Life is good!

False jimg111,
I know REO guys and they are getting very little new inventory handed to them. Once it is handed to them it is several weeks to months before it goes on the market. That serious REO inventory might be coming but dont expect to see it this Spring.

sdr

Well put, AK.

I second (fourth?) the go to the beach comment. It was an awesome day today. I was out and about today and was surprised because I didn't see any of the following things:

- Gangs of formerly $300K/yr lawyers carjacking innocent civilians
- The unemployed planting vegetables by the highway
- People taking wheelbarrows full of money to the local fast food place so they could buy a hamburger

Instead, what I saw was a ton of people totally oblivious that the end of the world was nigh. Somehow, most everyone I saw was enjoying life in the face of inevitable certain doom.

Sometimes I think the negativity on this board gets a little out of control (I'm as guilty as anybody). Us analytical types tend to focus only on the negative and ignore anything positive. Whether or not you think the world is going to end, it would be a crime to let a day like today get away. Make sure you get out and enjoy days like today before Armegeddon hits.

False, SDR. I am one of those REO guys and we have been told to ramp all systems up for serious assignments this month, received 11 just last week and they said you ain't seen nuthin yet. Most were vacant and already rekeyed MONTHS ago! Means the phantom inventory is real and here it comes....
BTW I'm not trying to be a contrarian to your post, just stating the facts I have heard from the horse's mouth.

Nice post Breeze.

Isn't the bottom line that you should only buy a home now if you need one and plan to stay in it for at least 10 years and can afford it or wait if you are not in a rush since the prices will drop significantly for at least another 2 years or so?

the world can be pretty damn scary and ugly and look pretty nice on the surface. i had a good time too, today, but that doesn't mean there isn't serious crap going on. kinda like dead people. you don't see them lining the sides of the roads. w e bury them. similar to financial death. it may not be completely apparent. doesn't mean peoplea rent dying all the time. there is a lot of misery, but it's not just out ther ein the open...

When the mortgage increases - "Sure" the more fall in home prices in SAN DIEGO - count on this folks !! There is no urgency and now everyone is kind of sqeezed by various ways (loss in 401k, Loss in Jobs, Loss in annual revenues ) - what else we can learn from this hard lessons and how could we expect a urgency of better buy now !! We haven't even close yet.