San Diego Housing Market News and Analysis

From this we see it was last bought for 770 in 2005.
http://users.ixpres.com/~gtriphan/05-1en...

I say screw any bidding war. It's a game. There is no other bidder. (Even if there was it doesn't mean they can get a loan).

Offer. 699k again, and walk away.

But, I would really price it at 2002 levels to be safe. 550k.

sdrealtor (who has lived in the area for many years) not to be confused with SD Realtor.

Check the school situation b4 you commit to anything. Make sure you are comfortable with it.

700 is way more than fair. I'm a lowballer so if you competed in a bidding war w/me, you'd win on this. But I try real hard to not fall in love w/a place. If you love this place, then go for it. But like most people say on these threads, and I agree, I won't be too shocked if prices come down to 2002 levels, though I anticipate that it will take a while, few years maybe in Encinitas. With that said, if you're comfortable w/the payments and you love the place, can't put a price on that.

thanks for the response, how many years do you think we'd have to stay in the house to see 699K again?

Also, in my opinion there is very likely to be another offer because we offered less than the asking and they agreed to take he house off the market prior to bank approval. I don't think they would have done that with only one offer than wasn't even at full asking. From my limited experience with short sales they usually don't take it off the market until they have multiple reasonable offers or one at/above asking (i'm no expert, but that's what i've seen so far).

-nicole
new house hunter

sdrealtor- I thought most of the elementary schools in the area were pretty good? Do you know something different?

I will look into it, thanks.

-nicole
new house hunter

Hi Nicole -

The best advice I would give you to estimate the value of the house x years from now is to simply put a spread sheet together that illustrates it for you. Run the estimation 10 years out. In any given year or years use a depreciation or appreciation rate that mimics what you think will happen. For instance, for this property perhaps run a depreciation of say 5% a year for a few years. Then a few years out start running an appreciation rate of 2-3% for a year or two, then pick it up to 4% and see how long it takes you to get back to your selling price. The entire exercise is much easier then it sounds.

SD Realtor

The newer short-sale listing at 1635 Olmeda might have drawn some attention away from yours, it is 2,285 sf but has been divided into two units and looks funky. It was nearing foreclosure so they listed at $570,000 and have offers to send in. There is also 1603 Olmeda, a remodeled 1,836sf house that sold for $725,000 a couple of years ago, coming back on as an REO shortly for (I'm guessing) $600,000 or less.

They are in the older part of Encinitas Estates and could be apples-to-oranges compared to yours, but when you see those close at least you'll know they're coming.

You know better than anyone - you've been studying it closer than us, so go with what you believe.

Jim the Realtor

you're the best SD, i'll give it a try.

-nicole
new house hunter

Thanks Jim. We just saw 1635 Olmeda a couple days ago, way too much work for us. But i think a good option for someone interested in fixing it up. Supposedly there are 3 offers above asking already (who knows). The main house is in pretty bad shape. Take that with a grain of salt thought 'cause I always fall for the staged houses.

Interesting to hear about the REO coming up shortly, i'll check it out if we don't get jerrilyn. I don't think the area is completely different, but there are significantly more rentals up in the older area so it doesn't have quite the same feel.

-nicole
new house hunter

Ok SD Realtor, hubby and I just made the the spreadsheet you suggested. Looks like if things turn around in 3 years, we could break even in 7 years approximately. If things really tank down 5% each year until we're back at 2002 levels, then it'll take 12-14 years to break even. If we tank faster than it'll only be 10 years. I feel much better and know that I'm comfortable with those numbers.

After getting all the advice here, we definitely won't offer full asking. Based on the spreadsheet you outline, I'll feel comfortable with the purchase if we get it- thanks so much!

-nicole
new house hunter

Most of the schools are pretty good in the area but that is a generalization. there are very substantial differences between the top and bottom schools in the Encinitas school district. Make sure you understand them or at the very least that your realtor does.

3 QUICK POINTS:

I would take the coolngreen house 10 out of 10 times over Jerrilyn.

Make sure you understand what is 1 block east of you there.

The owners of that house contacted me about a rental i had. My impression was they were not a real hardship case but rather unhappy with their poor investment. the short sale isnt a slam dunk on that IMO.

Nicole good for you for running the numbers!!! It is actually pretty interesting to see the variations isn't it? Okay some other stuff... Remember on the sale of the home you need to compensate another 5-6% to cover sales costs when you do sell it so don't forget about that.

At any rate the spread sheet is a nice method that you can use to not necessarly predict the exact year of when you will break even again, but at least make a best and worst case scenario to give you a range.

Also one other thing... Once more if you really love the home, then NOT getting the home simply because you missed it by a few thousand dollars will really irk you. See Raptorducks posting... That said, I do believe that the market up there will continue to decline and that in the future you will have ample opportunity as more homes become distressed. I say this without having run any analysis of the home you are looking at.

Finally Jim and sdrealtor brought up very good points and both of them are very astute with regards to that particular submarket.

SD Realtor

sdrealtor, My husband is going to see the Coolngreen house tomorrow, we tried to go last night but our schedules didn't work out well. We're not to excited about it though, because it is beyond our price range- I don't feel comfortable with greater than 700K. I'm afraid we wouldn't get it at that price.

BTW, You're freakin' me out about what's 1 block east of Jerrilyn- I really don't know? what's the deal with 1 block east? I just see neighborhoods there. Any advice about that area would be greatly appreciated. I think you're right that there wasn't a true hardship, but as far as we know everything has been approved with the bank, so who knows?

-nicole
new house hunter

nccoastalseller

There is a high power transmission line just a few blocks east of Jerrilynn but I don't think it's worth worrying about. This area is much more desirable now that there are traffic lights to exit at willowspring/el camino and cerro/encintas blvd intersection. A few months back this was not the case and it was dangerous to cross those intersections. This area has no hoa's which is a plus. A mixed bag as far as the neighbors are concerned. The chimney sweep that we used to sell our house in the area said that all of the white brick chimneys in that neighborhood were junk and required significant repairs. Again nothing major to worry about if you're spending 700k. No sex offenders registered with CA Megan's law in the area. Lots of inventory in this area relative to Coolngreen area which in the end will put more pressure on prices. I like mls# 071090243, big lot, nice neighbors, but he HOA's are a bit steep and it might be small for you. The sign in the front yard say "bring an offer". Why not try a low 600's offer and use the rest to build studio for extened family.

.Thanks NCCostal- I didn't realize there was a transmission line there, good to know. Interesting facts about the chimneys. Also good to know there are no sex offenders there, I never been a fan of them :) I did check out the 071090243 listing online, but ruled it out because of the size (sister-in-law is set to move in 1 week). Perhaps, that was hasty, I've asked my husband to see it tomorrow if possible. thanks so much for clarifying things, i went on google maps satellite and saw this big pile of dirt- i got worried it was a nuclear waste dump!

-nicole
new house hunter

nccoastalseller

The power lines are east of the dirt pile. Looks like someone has done significant grading, makes me wonder what is planned for that empty space.

Not a nuclear dump but a closed landfill that has been capped and is currently venting for the next xx years.

Knowing things like this is why you should ALWAYS use a good local realtor. You may decide that it isnt an issue to you but surely you should have known about it.

FWIW the other listing is priced nearly 100K over the current market value. Long time seller has plenty of equity. Go get her if you please.

I Really like the spread sheet idea but I think I might plug in higher rates of depreciation too. Maybe 10% or more per year for 3 years and then no appreciation or depreciation for a while at least. Then I'd try it with modest appreciation after a few years. Staying within ten years is good IMO. Good call SDR. We don't have a crystal ball so we need to look at the risk with parameters that are not too tight.

Thanks Rustico, I will try that also.

-nicole
new house hunter

Hey sdrealtor, Just wanted to say that I checked out the property on Coolngreen, you are right about the neighborhood. Overall its a great house. But there were just a few things I didn't like- smaller sq ft, small master and a weird set up for the master bath- ?shower in a jacuzzi. You are absolutely right about it being overpriced, my Realtor showed me the comps in the area and they're pretty far off. They might owe as much or more than $612K on the house, so i don't think we'll be able to get much of a deal from them.

We're gonna keep waiting and see if they come down significantly or something else comes up.

-nicole
new house hunter