San Diego Housing Bubble News and Analysis

That one in Torrey Hills is a gem unless the market drops out

Is that supposed to be a good deal (below $1.05M)? Considering the 3rd one sold for $775,000 in 2002, that's still 35% above 2002 price.

35% above 2002 price is not too bad if we consider inflation. In seven years, that's about 4.4% anual, compounded. I think 3.5% annual would be more reasonable than 4.4%, and that results in 27% compounded appreciation, which is very close to the observed 35%.

Compared to gold or the Euro, the house is a bargain today compared to 2002. I know, I know, household incomes around here are not in gold, Euro, etc. But considering that rich people worldwide consider SD for a second home, we can't ignore these other measures of value.

how about this one?
http://www.sdlookup.com/MLS-090024693-13...

$1,065,000
4,154 sf
PPSF: $256

This house does not seem to be all that desirable as a second home for an out-of-towner.

There are two reasons why CV houses cost as much as they do:

- Public schools
- Proximity to high tech jobs

And neither is a factor for an out-of-towner with enough money to spend 1M on a second home.

Your argument really only applies within 1/2 mile from the coast. More so in places where schools and jobs turn locals away. Try to buy a waterfront house in Oceanside or Dana Point, you'll be competing with out-of-towners. Try to buy a McMansion in Carmel Valley, 99% of prospective buyers will be your familiar, boring Chinese dual-income Qualcomm employees.

Hmmm... Considering you posted this at 10:39pm on a Sunday night, seems like you're not doing that much better in terms of living an "exciting" life, my sour grapes colleague.

There's always the possibility, however remote, that I posted this from my hotel in Aruba after spending all evening partying with a bunch of Sports Illustrated swimsuit models...

That's weird. Last time I went to Aruba and partied with the SI Swimsuit models I didn't even realize that they had the internet there.

I never knew that San Diego was founded as late as 2002 :) I wonder, if it had been founded earlier, say 1996, how current SD home prices would compare to those 1996 prices, adjusted for inflation. Might offer a less optimistic view of where SD prices will go over the next few years. As Rich has pointed out, it's now all determined by the govt, so the future of SD home prices is to be found inside Chris Dodd's and Barney Frank's brains, and nowhere else.