San Diego Housing Bubble News and Analysis

Man there are some people posting really stupid questions here lately. Hey sheeple, guess what, this is only the beginning. It's going to get far worse. Do you even understand what is bound to happen with Alt A loans soon??? Probably not.

JWM

Ouch! I'm new here so cut me some slack. I was just repeating what my realtor said. "Oh, this is definitely the bottom, you should buy now before prices start going back up"

I've done some of my own research and there are currently 4 1BR units listed at this complex, 2 of them at 215K, 1 at 219K and one at $240K (good luck).

I agree with you that it will get much worse. The 1BR units were going for approx. $130K in 2002. Do you think we'll see those prices again.

Also, I'm still curious as to whether the 2 units I mentioned before were foreclosures or short sales. How can I find out?

Thanks

Welcome to Piggington.

It's going to get waaaaaaaaaaaaaaaaaay worse.

Most likely one of our real estate agents will be able to answer this for you, either sdrealtor, or SDrealtor (Adam).

"$130K in 2002"

that's funny yet sick. in 2002, RE values were still inflated from the bubble.com.

http://www.businessweek.com/magazine/con...

www.foreclosure.com has a few at that address. #134 was listed as foreclosure, as well as #128 and #109. Not sure about the accuracy of the site, perhaps others can comment.

Wow, I'm impressed, how do you just pull up a relevant article from 2002? And no, I'm not being sarcastic.

I was lucky enough to have purchased a 1br unit in this complex in 1998 for $58K. So yes, a 100% increase in 4 years would certainly signal a bubble. But to then double again in the next 4 years is just insane.

A 1br unit now rent for apprx. $1000 per month, so taking into consideration the $200 per month HOA fee, a reasonable price for one of these units would be around 120K

Recontrust Co sold the #301 unit to Bank of New York for $263,250.00. The sold price on 6/2/2004 was $365k.

Qualtiy Loan Service Corp sold unit #134 to Deutsche Bank for $221k on 1/2/2007. The sold price on 10/27/2004 was for $300k.

Rockemsock,
Thanks for the link. But it only lists the street name, not the address. Do I have to subscribe to get all the info?

Realtor in Uptown,
Sorry if this is a stupid question, but does that mean that both of those were foreclosures? And if so, why is the 2007 sales price so much lower than the 2004 price? Did these people put $100K and $80K down?

" A 1br unit now rent for apprx. $1000 per month, so taking into consideration the $200 per month HOA fee, a reasonable price for one of these units would be around 120K"
--------

You sound fairly knowledgeable about the market and answered your own question.

i'm a black belt 5th degree in google-fu. i'm also a level 15 nerd.

yeah, the insanity is irritating. it kept me from buying in early 2k; how could prices possibly go up any higher? not to mention, everyone in the media was talking about a "housing shortage" rather than retarded interest rates and cracker jack loans. i was too busy drinking at the time to bother with doing any of my own research. and hey, if NPR says it's a shortage, it surely is, right? (fcking gloria penner and her round table of UT hacks.)

rents are going down so your reasonable price may also go down. not to mention, as prices go down, the standard of measure goes up. ie., for 120k, why not hold out for a 2 bd? or even, a house out in the boonies? and a condo in fashion valley doesn't look that great when carmel valley is coming into range...

301 seems to have had a first for $292k and a second for $73k. 134 seller owed about $103k.
Not sure if they were NODs. Based on the prices it looks like they are foreclosures. Could find out later for sure.

I have noticed many bank owned homes and condos now on the MLS way below the sold price of a few years ago. Many sellers are now way below the price they paid just a few years ago. Example in 92107 with a ocean view.

Purchased 8/11/05 $1.4 million
Listed 9/22/06 $1,399,000.00
Reduced $1,150,000.00-1,250,000
Listing expired
Relisted 3/22/07 $1,150,000.00-1,250,000

Realtor in Uptown,

So if these 2 units are now owned by the bank, does that mean they'll be coming on the market soon?

citydweller,

Maybe in the next 6 to 8 months. Depends on a few things. The people might have to be evicted and the place might need to be cleaned. When they hit the market I could let you know.

citydweller,

Just looked to see what is listed on 6780 Friars Rd. Unit #134 was listed on 1/23/2007 for $224,900.00. Now its listed for $207,500.00. The unit is vacant and has been on the market 65 days. Price is still high.

Unit #119 is now selling for $219k. Listed on 9/8/2006 for $249k. Sellers purchased the unit on 5/2004 for $295k and owe $280,250.00. Tenant occupied. Renting for $1,100/month.

Realtor in Uptown,
Thanks for the info. I finally went to SDLookup.com, what a great site.

So if it's renting for $1100 per month, what would be a "sensible" price to pay, for someone who wanted to live there long term?

What's the formula for figuring out the true value of a unit based on it's rent potential?

JWM in S.D.,
You're right. According to Zillow, another 1 br at this location just sold for $200K. Is THIS the bottom? haha!

If you put 20% down for a 30 year fixed maybe you could purchase this unit for $170k max. Your payment would be about $1100 a month. I suggest you speak with your bank or lender to to get a more accurate payment.
I would not hesitate to offer that price. The bank is losing money and they might accept your offer to dump the condo. If they dont you move on.

Not only were 02 prices inflated from the bubble and 9/11 paranoia (own a piece of american dirt before the terrorists take it all, never mind that if they could and did took it, and you owned it ... you'd still be dirt less) ... these were high paying and medium paying and low paying jobs in the us in 1997 that have probably disappeared forever into India and china via outsourcing by 2007. IMHO Our bottom is below 1997 prices. Remember in 97 we were furoiusly importing high wage jobs via H1 programs (200 K a year plus) which we now send out at an even furiouser pace.
Cool.
Cow_tipping.

Bottom? Probably not. As Winston Churchill said after the British victory in the Battle of Britain, "Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning."

To put a finer point on the rental scenario - you would most likely get an accepted offer around $200k if they are asking $215K.

Payment $1125
HOA $240 (?)
Prop Tax $170

Your payments would total about $1535. Renting it out for $1100 creates a loss of $435 per month. Living in it gives you a minor tax savings. Renting one instead of buying saves you $435 per month. But over time rents will go up.

So maybe you should save your money and invest in Denver (highest foreclosure rate in nation). Or buy a nice car (BMW Z4?).

Rent at $1,100 for an old 1970s 1-bed is high. I think that $950 is more like it. I know someone who pays $950.

Rent will come down when all the for-sale units (including all the condo conversion units) in Fashion/Mission Valley hit the market. I'm willing to bet that rent will be down in the next 5 years, not up. People of working age are moving out of SD and thousands of unit will hit the rental market.

I think that prices for a 1-bd unit will settle at $90k in an old building and $125k in a newer building. Don't pay more, rent and watch the market. If you buy now, you can easily loose your down-payment and more.

PerryChase,

I agree the market will get worse. Just giving the information based on the rent.

To make sure you are buying into a good investment check the owner occupancy rate.

I have no intention of buying anything in the near or not so near future. I believe that when the market hits bottom it's going to stay there for awhile, so really no need to rush in. Like others have said, I'm just going to sit back and watch for awhile.

Correct city dweller ... fundamentals change slowly ... reverting to fundamentals means ... it will sit there till they change ... that's however not a bottom, bottom will be when it over shoots the fundamentals and comes back up to fundamentals rather quick ... So, we buy when its doing that ...
Cool.
Cow_tipping,