San Diego Housing Bubble News and Analysis

Me personally. For a townhome/condo in carmel valley. I would wait. Prices for the better places have already crept up slightly since lows of i think around Nov 08 (where there were a couple of 3/3 townhome reo's in nice areas for $4xxk...Not so from what I see now)...BUT, there's also a sheer number of apartment converts...The problem you'll find is quality. Much more of the underwater attached homes are recent apartment converts and a lot of them are crappy homes. So even if you are able to find something lower priced, chances are it's not something of quality which you really would want right now anyway.

I cannot comment on the townhome inventory but with regards to detached homes it is about the worst inventory I have seen in quite awhile down in the price range you are talking about. I can honestly say I have never seen PQ so active in that price range. Again, it sounds like you are looking for townhomes so maybe this does not apply.

What you really need to hope for is that the foreclosures that have been getting held up by legislation finally get sold at trustee sale and then get put on the market.

If you want to track what is happening foreclosure market in the county then go to www.foreclosureforum.com/stats. As you can see, when you look at the trustee sales the numbers are absolutely abysmal.

Without a drastic change in those numbers we will continue to see the same sort of activity we have been subject to since February. Make no mistake, this is a VERY POOR time to purchase a detached home in many areas that are strapped for inventory.

We been actively looking for the past 6 months in CV and can't believe how many properties were over bid or paid above the listing price. Let's hope for the foreclosures to kick back in soon or else we will experience another buying frenzy like past years. Can't believe many are actively buying, with the current economy, along with the high unemployment, I thought it will be the buyers market in SD. I guess not....

We saw the same thing for townhomes in Torrey highland area (under 500K).. A month back there was hardly any activity and we have multiple offers much below the listing price. Suddenly 2 weeks back multiple buyers started bidding for the same properties..and now we feel we are paying abt 1-2% more than what we wanted to pay..Not sure if this is the right time to buy or to wait couple of months..

Why not wait until the spring rally is over? Actually, spring rally last until when? July or August?

The home we have offered for now is really what we want with all upgrades etc--so not sure if we will get a similar home later. Also can't figure out the rush right now is because of spring rally OR in general everyone has decided to jump into the market [because of the prices and mortgage rate] and this trend will continue later in the year?

confused..

veees, have you ever fished? You know that the key is to get the fish interested, and then start moving the bait away. That's when the fish makes its mistake. Be careful!

ok so getting people back to the original question..is this a spring rally?

Veees, I think paying 1-2% more if you plan to stay in the house for long term should not make much difference?

Until there is a change in the conditions, I do not see much of an abatement.

We need an influx of inventory OR

We need more unemployment OR

We need to see long term mortgage rates move.

I am HOPING we see the inventory movement with the return of more foreclosures hitting the market. However I am very disappointed with the moves by state and federal governments to counter and/or delay foreclosures. Similar statement with regards to loan mods.

As for unemployment I have read on this site that once we hit 7% then things will crash. Then 8%... then 9%... 10%... so I am pretty skeptical now that unemployment will push the cart over. I am pinning my hopes more on inventory then anything else.

As for rates... no chance of rates running away from us in the short term. You gotta pray for china to cut us off... I don't see that happening for a few years.

So... lets hope for one of these things to happen.

If one really believes the fundementals of our economy, or the world for that matter, are really about to turn around...then by all means, jump in.
But look around. This is a massive wreck in slow motion because Uncle Sam is going "off-the-hook" to stall the inevitable. These tactics are not creating jobs and productivity to our society. They are strictly stalling tactics....hoping that something will happen to make everything good again. When you figure out what that something is, let us all know.

Read up on the shadow inventory AND the mountain of REOs coming. If you get caught up in bidding wars this spring you are playing right into greedy banker's hands.

How can we have bidding wars during the greatest RE meltdown since GD1? Here's how:

Four San Diegan housing bulls walk into BofA to bid on BofA owned REOs.

Mr. Banker says: Thanks for coming, today we are bidding on 2 fine REOs, one on Main St. and one on 3rd St. We’ll start at $200k for the Main St. property and $160k for the one on 3rd.

SD Bull #1: But I see 250 REOs on your list for the neighborhood we are interested in.

SD Bull #2: Why can’t we just make you an offer on any one of the 250 we prefer?

MR Banker: It does not work that way. There are only 2 available for sale. So there is an extreme, dire shortage of these affordable houses.

SD Bull #3: Makes sense! Here’s my bid on the one on Main St. My realtor said I need to get ahead of the bidding if I expect to win one of these 50% off REOs so I’m gonna go with…. $220k

SD Bull #2: I bid $225k!

SD Bull #1: I want to bid but I am worried because I see 250 REOs on that list right now and I read somewhere that there is a tidal wave of even more foreclosures coming soon.

Mr. Banker: The average wage for people in this area has been re-adjusted upward by removing the lower income earners from the equation so affordability ratios are now at all time lows, first time buyers will now come from wealthy islands and not from apartments anymore, SD has wonderful weather, It’s different here, Its different this time. Mortgage rates are low. PF Changs is busy. You had better hurry and put an offer in on this house on Main St. because it seems everyone wants it!

SD Bull #1: Well Bernanke did say he saw some green shoots, and that house on 3rd St. is a mess so….I’ll go $230k on Main St!

Well said, peterb.

With trillions of dollars going into the FIRE economy, instead of into productive endeavors, how can we expect to see a real recovery?

Our entire economy is now based on smoke and mirrors.

http://www.theonion.com/content/news/nat...
WASHINGTON—After nearly four months of frank, honest, and open dialogue about the failing economy, a weary U.S. populace announced this week that it is once again ready to be lied to about the current state of the financial system.

Tired of hearing the grim truth about their economic future, Americans demanded that the bald-faced lies resume immediately, particularly whenever politicians feel the need to divulge another terrifying problem with Wall Street, the housing market, or any one of a hundred other ticking time bombs everyone was better off not knowing about.

In addition, citizens are requesting that the phrase, "It will only get worse before it gets better," be permanently replaced with, "Things are going great. Enjoy yourselves."

"I thought I wanted a new era of transparency and accountability, but honestly, I just can't handle it," Ohio resident Nathan Pletcher said. "All I ever hear about now is how my retirement has been pushed back 15 years and how I won't be able to afford my daughter's tuition when she grows up."

"From now on, just tell me the bullshit I want to hear," Pletcher added. "Tell me my savings are okay, everybody has a job, and we're No. 1 again. Please, just lie to my face."

Rt.66 - that was funny. Thanks :)

Arraya - give me the antidote for that pill ;)

I liked this part:

"I think we can accommodate the American people on this," Senate majority leader Harry Reid (D-NV) told reporters. "Why, just today we made excellent progress with GM, whose CEO Fritz Henderson told us that every penny of federal and taxpayer funds would go directly to the construction of three new auto plants in Detroit that will create over 90,000 new jobs and spark the economic rebound we've been waiting for."