San Diego Housing Bubble News and Analysis

Hi lmack -

As a fellow renter who has been doing the multiple houses in multiple years I can understand your spot. However, I cannot advise strong enough to sit tight for another year or two if you can. The good part is that you already have your stuff in storage so that dynamics of one more rental is not to tiresome for you. Also in 2 years you may indeed find that your money will go alot further. The nicer parts of Del Cerro have held up fairly well against the cycle downward but Del Cerro has no teflon wall around it and will follow the market just like other nice neighborhoods. I am not sure what your definition of considerably is. Also the composition of your purchase, (how much you will come in with using cash verses what you finance) is important. While I do believe we will see depreciation I also believe we will see higher interest rates as well. So given the numbers you stated above, given another year or two if you can bank another 50k perhaps, earn some interest on the 200k, and let prices slide a bit, even with higher mortgage rates you should enjoy more buying power and lower property taxes.

Also I am not sure how familiar you are with San Diego. Have you lived here a long time prior to coming back here? Is there a compelling reason you have decided on Del Cerro? It is a very nice area; I know it well and have friends there but I still would advice to rent if at all possible for another year or two so that you can get real familiar with the area.

With prices now falling at least 1% per month, waiting one year will save you $50k to $100k.

Your tradeoff is quite simple: Is the pain of moving worth that amount of money?

Unless you are set on the area, then inventory is pretty tight, although could be likely that more and more places at the bottom of the hill will come online. This Raymar place you are interested in is not distressed and seller doesn't "have" to move. Although rumor is she has another place on the other side of College as well, so would likely be inclined to sell one of them. Perhaps you contact the seller directly and try to get her to sell you the other house that is not even listed yet.

I think you'll be much happier with a purchase if you rent for a while because you will learn about other areas you like, understand the market, and most likely increase your buying power.

The stress of buying when you are in temporary housing stinks, too. Less stressful looking for a rental, I think. Get a rental, let the lease turn over to a montly, then start looking so you are on month-to-month when you are house shopping.

Lmack: nowadays people are tired of throwing money away on mortgage payments! Especially considering that houses are depreciating assets and often houses are worth less than the mortgage debt.

If I were you I'd rent a nice house as close as possible to either your job or your hubby's job, so that you can get home in minutes if needed. By renting for a couple of years you'll get to know the neighborhoods, so in 2010 you can decide what's the best area to buy in. Or you may decide to leave SD after all, the choice is yours and you'll be free to make it (unlike the poor souls who are "trapped" and can't sell their houses for what they paid).

My sister and her family (one kid plus another on the way) rented a house, not an apartment, for the last 3 years and were quite happy. Had they bought a house in 2005 they would have lost at least $150K-$200K in equity.

With the new baby coming, and the possibility of grandma staying with them for a few months at a time, they moved to a bigger place. They just signed a two-year lease, and I think that was smart of them.

Gotta love that "throwing money away on rent" phylosophy. It has probly saved you tens if not hundreds of thousands of dollars in lost equity you would have taken by moving right now from just about anywhere in the country.

I dont know where you moved from, but if it was anywhere in CA,FL AZ, NV, the upper-midwest, or certain cities like St. Paul or Atlanta you should be thanking your lucky stars you were a renter. Either you wouldnt have that 200k DP, or you would still be where you use to be dreaming about the job that got away because you couldnt sell your house. Frame it in that context and renting is prob the single smartest thing you have done in the past few years.

Needless to say, I think your husband has the right idea.

Amen DWCAP. Let's examine that statement "throwing your money away on rent".

Paying a month's rent gets the tenant a place to live, running water, bedrooms, electrical outlets, heating and cooling, a kitchen, a bathroom or two or three, a garage or parking places, probably a yard, for the whole bloomin family and maybe pets.
All that from a possibly underwater landlord (I'm one) who may write a bigger mortgage check monthly than your rent, who also pays your property tax, insurance, repairs, & gets to see his property value fall at least 1% each month.

I'd call that a screaming bargain for the tenant.

lmack--

I'm not going to take a stand on the rent/buy issue, but I think Del Cerro is an excellent choice in terms of neighborhood. You could bike to Alvarado, if you wanted to, and your husband's commute won't be very hard either, even during the height of rush hours. You're just a few exits from the 163 and the shopping/dining in Mission Valley is just minutes away. Most people on this board want to live in the North County coast area, and that's fine, because there are a lot of employment centers nearby area. Just wanted to put in a good word for this area of Metro San Diego because it seems to be the ideal choice for your employment situations.

p.s. I am OLD! Used to make out with high school boyfriends at night in the hills of Del Cerro, when the roads were already built but construction was still underway and the views were fantastic.

Imack,

A few things to consider:

1) the state of the market. Like pretty much everyone has said, it will probably go down a bit more. You could save by waiting.

2) Did you find a house you like in Del Cerro?

3) schools, You have about 4 years before your kid starts Kindergarten, so no rush there.

4) if your kid is going to day-care, there are a couple of places near by that are good (mission valley Nazaren daycare is good) Home daycares are far and few between. We found one good one.

5) How much work does the house need that you're going to move into? You might be able to negotiate a 2010 price.

6) specific neighborhood. What area of Del Cerro are you look at?Princess Del Cerro, Old Del Cerro? Make sure you don't end up in Allied Gardens (different Elementary School = poor primary education)

7) Easy access to everywhere. Good bus service to the SDSU trolley Station or Grantville for future commuting needs when Gas his $10 a gallon.

8) walk to Windmill farms, no need to get in car

9) nice community pool (del cerro park). $40.00 per month to join, pool heated 9-month a year at 84 degrees. Kids can learn to swim, kids pool, sand-box, basketball courts, bbqs areas, etc..

10) lots of remodling going on right now. A number of new younger families have moved in recently. Older folks keep the place in order and eyes on the streets during the day when everyone is at work.

11) great sense of community. been her for about 7 years. about the second year living here, my wife and I started to feel part of it. It takes time.

12) IF you are going to rent in del cerro, you';ll have to rent a house. Not too much condo living around or available that would give you the same feel as owning. Unfortunately, Condo dweller and owners in communities like this tend to take on two different lives.

Check out 5892 Madra Ave, view home, 2800+ sq feet and $685,000.

http://www.redfin.com/CA/San-Diego/5892-...

It looks to me like prices are coming down here. How does this compare to the other view home prices? Some of the overpriced million $ homes don't seem to me to compare to this property at $230 per square foot.