San Diego Housing Bubble News and Analysis

Good article. Worth a bump.

Agreed. Great article. It touches on all the Big Themes in play right now. And it does communicate the certainty that the downtown San Diegeo condo market is SCREWED.

I loved this comment "stevewag23" posted to that article. Classic!

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You really need to me making $150,000 per year in San Diego to pull it off and live a nice life.

No kids. No dog. No wife.

$300k if you want those things.

Anyone know where to get a job in San Diego for 300k?

And we don't even have topless beaches with Model girls.

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You really need to me making $150,000 per year in San Diego to pull it off and live a nice life.

No kids. No dog. No wife.

$300k if you want those things.

Anyone know where to get a job in San Diego for 300k?

I know this is intended to be funny, but it really depends on your definition of "nice life". I have a wife, kid, and dog, total household income less than $150k, and we're very happy. There's no Bimmer in the garage yet, but we're not remotely close to poor.

I also wouldn't consider it "nice" to have a wife and kid that required an additional $150k income...

I do agree that a family can live a "nice" middle-class life in San Diego on $150,000, assuming you got a thrifty wife who stays away from the malls, away from Manolo Blahnik shoes.

I think a middle-class life in Bay Area (where we are now) requires more total family income than $150K/year if you got wife and kids.

$3700 a month for a condo is plainly ridiculous. You could rent for half that. I'm not sure what there is in San Diego that helps you part with $150k a year, unless you are splurging on high end consumption, but you could do that anywhere. Consumption is going to be one of the next major blots on the landscape, particularly as China gears up, and competes for resources. It might sound very trite but learning to scale down and live more "simply" has it's rewards. A little more soul searching and a little less materialism is healthy, and you don't need to hug trees either.

Wow - total payout for the mortgage fees alone, assuming a 30 year mortgage is just over one million. Adding in the condo fees and taxes, they will pay 1.3 million over 30 years.
Lets see, 3700 x 12 months = 44.4 k/year to live there
renting comp unit 2100 x 12 = 25.2k/year (averaged hits from craigslist of 2 bd rentals around union square)

You can rent same place for about half of what the pay to own.

ewwww

Since 150k is obviously not median income for a family of 4, one of two things is correct.

• This posters definition of middle class is highly warped. He or she is conflating icons of middle class life with those of upper middle or upper class.
• Lots of people, enough to constitude the middle, have been living beyond their means to emulate an income of 150k.

At some level both are probably true, but it remains to be seen which gives out more, lowered expectations of what it means to be middle class, or the demand destruction from forced deleveraging.

is my standard for the "middle-class" life warped? Aren't these things ESSENTIAL to a middle-class life? :

* Occasional plastic surgery for The Wife, when she needs a "touch up"

* A kept mistress on the side, so husband can take a break from The Wife (who is overdue a "touch up")

* A convertible beamer in the driveway

* A phat white Lincoln Navigator, with spinner rims.

* McMansion

* In the McMansion a House-shaking surround-sound home entertainment, w/the MIN 50" LCD big screen

* Nanny in the McMansion (so parents don't actually have to spend time with the kids)

* Weekly visits from team of Mexican maids to keep the house clean

* $100/week bill (per parent) for vists to Psychiatrist, to keep the Prozac flowing

Did I miss anything?

barnaby33,

You must have missed the note that middle class people in SD are above average, hence the $150K.

BTW, some posters have already shown that 150K can still force you to shop at Target if two earners and young kids.

20% 401K
monthly net = 6700
500K mortgage 2600
food 800
insurance 250
fuel/car pay 400
clothing/etc 300
travel/once 100
child care 1000-2000
529 plan 100-200

Thank you equalizer!

Thank you for showing by the numbers that it really does take 150K for a middle class life in San Diego.

Tell you something personal. I lived in San Diego with my wife, but no kids. Our family income was about 150K.

We barely had a middle class life. My wife drives a corolla. We shop at Target, and often at Wal-Mart. You get the picture. We have a happy middle-class life.

Now my extended family all up in Minnesota where I grew up, will never understand how $150K is middle-class for a family in San Diego.

I look at it this way, a Minnesota middle-class income (say $70K or $80K), only earned in San Diego will pay for a "middle-class" family life, living right in the heart of Chula Vista or a bad part of Manilla (Mira) Mesa, or the run down parts of Escondido

Then you'll have bullets zipping by your house (or thru your house!). Is that a middle-class life?

Equalizer, was that one of those statements like, "48 of 50 states are above the national average in high school education?"

By even the most generous of statements, median income for a family of 4 is 82k. A little more than half the 150k quoted.

Another interesting tidbit is how you allocate your money for that supposed middle class family. 20% to savings, are you joking? Almost nobody saves that much.

Fuel and car payment 400, in what decade? Most new cars are over 20k and everyone I know who has bought a car in the last few years has a higher car payment than that.

529 plan, is that something you added just to round things off? Again median income earners do not for the most part even fully fund their 401k let alone an IRA or 529.

Again, I think there are some VERY warped notion of what middle class really is and historically was.
Josh

yeah, you got the joke.
My numbers are for typical Piggs, not middle class.
I'm sure someone can find the thread that discusses the numbers in detail. I was just stating that Pigg in my example cant shop at Nordies, which reinforces your view that bubbles everywhere.

Some high priced areas require 150,000 annual income for middle class living. In most of the country $150,000 would make you upper middle class or even rich if you are frugal.

Equalizer, whew ok! Just needed to check. I'd be reasonably certain that this community in particular doesn't attract median income earners for the most part.

Every time I look at Craiglist(lazy mans mls.) I still see the same overpriced downtown condo's not moving. With lots more inventory coming 09 should be fun!

Josh

As these condo prices start to get pummeled, keep one critical think in mind, an HOA association that's poorly funded is hell to part of. Make sure occupancy is mostly owners and at 80% or greater.