San Diego Housing Bubble News and Analysis

Good to have you back, PS. Thanks for the links and anecdotes.

Yes, welcome back. Good story.

Welcome Back PS!

Let's tie this in with the Zillow thread just for the fun of it. Since you know the addresses, could you go to Zillow for each one of these townhouses and tell us the 1]most recent sale price 2] property taxes paid on each and 3] current Zillow estimate of each.

What fun!

Wow, that's confusing to beat everything. #3 is 1st, #1 is 3rd, #2 is 2nd.

#1 listed in February, so I think #1 is #3 because #1 last and #3 is first and #2 listed in August and that's after February.

Now Who, who's on first. What's on third ...

Care to clean that up a bit PS, maybe making #1 the first seller (lister), #2, 2nd, #3 the 3rd.

While #2 may not think they're in the price war, their boat has already been torpedoed.

As a side note, I was cruising through a neighborhood by my house last night. Previously 3 homes were for sale, $1.595M, $1.55M and one $1.495M (M as in Million). All are 3 or 4 Bed 3+ baths.)

One is listed for sale still the $1.595M. One is listed sale or lease, one is lease only at $3900/month and one new is lease for $3400/month. Three of the four are vacant.

Now really, who rents out $1.5 million dollar home long term? And if you think it is worth $1.5M, how do you rationalize getting only $45,000.

Powayseller...

Can you see if there have been any recent sales on your street?

I'm wondering when and for how much the last actual sale took place. I'll bet the last sale was in the mid-500K range, right?

powayseller, good story of what's happening on the street. Your zip realty link only works for you (it took me to my saved houses on ziprealty). If you give use the MLS #s, we can look them up ourselves.

BTW, just for kicks I looked-up what you can rent for $2,500 - $3,000 per month. The money goes kinda far. No need to buy in my view. I have a friend who pays $3,000 in mortgage for a lousy townhouse in East San Diego. I'm not sure what she was smoking when she bought earlier this year! She never shared her purchase plans with me and by the time I heard about it, it was too late to warn her.

PS where is your street located?

HAHA...Yeah tell me where you are located. I love you.

Ok malfred, minus context, your comment is stalker scary.

Josh

1st listing, MLS 066080619, paid $430K March 2004 (Nov 94, $204K). This one is now reduced to $470K; estate sale.

2nd listing, MLS 066072181, paid $182K, July 1990 (any MEW in the meantime?). Couple nearing retirement.

3rd listing, MLS 061088282, paid $328K, Dec 2002 (Dec 1999, $212K). She's the one who is relocating and must sell.

We've had a few sales, but they were smaller units. The peak price was $588K in January 06 for the 4 bedroom model.

I tried hard to clean up this story, but sorry if it was unclear.

Nice anecdote, and good post.

I guess the expectation that things will turn around in the Spring is based on the seasonal nature of real estate? If you were selling these properties right now, what might you price them at?

Since these are just tract homes, I'd price at 5% less than the most recent townhouse sale in my area. The most recent sale, 1 block away, is a unit only 10 years old with brand new roof and a larger garage, also a corner lot, but smaller (1575 sq ft). Final list price was $440K - $470K, and it just closed a few days ago. Based on that sale, the $495K price seems reasonable. However, if one of the realtors is around, they could better say what it is worth.

The most recent sale, 1 block away, is a unit only 10 years old with brand new roof and a larger garage, also a corner lot, but smaller (1575 sq ft). Final list price was $440K - $470K

Well, the canary will sing when the numbers post. Hopefully the holder got $400 or more. At $400, they're only 10% below asking price, a real possibility in today's market.

The slightly larger place adds some, but that's partially cancelled by the new roof and garage.

I think the situation in Boston is far worse than in SoCal right now but SoCal will follow shortly. Things are going to get real REAL ugly. People refusing to believe it chant the same rubbish..that the job market is so strong. First off, incomes from these jobs can't pay for homes even with a 50% decline in prices so why does that matter at all, secondly layoffs have already started first at Ameriquest, then Washington Mutual and now 2500 cuts at Countrywide.

The last 5 yrs was a deck of cards and it will come crashing down. "The gains of the last 5 yrs will be erased" as Peter Schiff would say :D

I must be missing something here. Are you saying that
if the median price for a home in San Diego is $499,000,and the decline seen is 50%, or down to 250k, folks with a median income of approximately 65k cannot afford to own their home?

At $250,000, with a 6% loan and 10% down, the annual PITI is just above the recommended 30% of income guideline.

So basically, yes, that's the point, at current income levels (which are currently inflated by home bubble profits), cutting the current median in half, just barely makes it affordable if the present very low loan rates remain.

I alone make over that. I don't know but, I have a feeling that most folks who buy or have bought a home are a two income family. Everyone I know in Santee, a blue collar, middle class area, makes more than that/are a 2 income family. That's seem's real unrealistic to me. Folks don't seem to worried about losing their homes. Factor in that rents in my area alone for a sfh are mostly 1800 plus, at least(Santee is a pretty cheap area) and you have a good profit, for renting out the house you bought for 250k. Doesn't seem too likely to me. I do feel personally, they're coming close to that though. More like 300kish, or more.

Santee is a high income zone. :-)

Chalk it up to the median math. The median county wide will be $250,000. That means places like La Jolla hypotethically are still $700K, Santee is $350K and National City are $150K. Keep in mind the median is a mix of condos, SFHs, townhouses including both the good and bad areas.

Santee has a 2005 median household (family) income of $73.8K

San Diego (City) is lower at $62.1K

San Diego County is a little higher at $64.3K

National city lower still at approx $41K

At least to the local Association of Governments.

n_s_r -

Your reasoning for home prices comparing median income to median home prices using lender qualifications is flawed.
The problem : Median income is based on ranking ALL households. Homeowners make up ~60% or less of households in San Diego.

Therefore the folks in the median income range are at the very bottom portion of the home buying chain. Think starter condos when comparing to median incomes.

Dang, didn't know that, thought it was the 65k someone referenced. According to the "Sperlings Best Places to live", Santee, has absolutely NO houses vacant, yet houses here are cheaper than other areas,I thought that was interesting. I am sure someone will tell me why that list is not accurate though.

FSD

I am not an expert, by any means, but I was thinking the same thing,younger/less money= condo.

Santee does have vacant homes. I purchased a fixer upper 6 months ago that was vacant for 2-3 years (probate). I have taken walks through our neighborhood and seen several vacant homes for sale. They are all fixer uppers, and flippers would have jumped on these 1 year ago.

FSD, baloney. So me the stats that show non-home owners have substantially less income.

Median income is the appropriate comparison because it tells you where the middle of the pile is. Similarly, median home price shows you where the middle of the home pile is.

CA brown bear

Just outta curiosity,where abouts is this home located?Don't get me wrong, I am not out to argue this point, just curious. It might be the reason they are empty is that they are in a less desirable area, haven't seen any myself. The areas I frequent are the more desirable parts of town.

Santeeman,
The homes I'm referring to are east of Magnolia and north of Mast. These are older homes built in the 70's.

Without getting too specific, the home we purchased 6 months ago is in a nice little neighborhood near Santana High and the house was vacant for so long due to a long probate fight between family members of the deceased. It had 2 or 3 buyers before us and fell out of escrow due to the seemingly endless probate. We purchased for $75k less than one of the previous buyers, and in fact our home inspector made a bid on our home (intending to flip it), but was outbid by another buyer during the frenzy of '04.

#1 lowered their price to $440K - $470K and is now in escrow.

#2 lowered their price to $515K last week and having an Open House every other Sunday from 1-4pm.

#3 is having lots of Open Houses.

A fourth home, 300 sq ft smaller than these three, closed escrow last month at $440K. That home was also a corner lot, but 10 years newer, with new roof and new exterior paint. What would be the increased value of the 300 sq ft, and deducting for the very old cracked shake shingle roofs for #1 - #3?