San Diego Housing Bubble News and Analysis

SOme great insight to this is to check out how many home builders there were in 1989 and then again in 1995! And that down cycle was like a cub scout meeting compared to what we're in now!!

I worked for a large home builder in the early 80's and I built 9 spec houses in Atlanta in 1987.

You can always make money building new houses if you can get the land cheap enough and you build cheap enough houses.

An important metric to consider is not so much how resales are behaving but how the raw land values are holding up.

Anyone have any idea where to find those numbers???

John

I think that raw land is getting hit pretty hard right now. It usually does at this stage of a real estate deflation. Having said that, if one builds a house for around $150 sq/ft. That would make the construction price about $300K for 2000 sq/ft. And I think that's a pretty cheap price to build in CA. I think Temecula homes can be bought for $300K right now that are not too old. So that would put the price of the raw land they're on as pretty cheap. I think. And this land is far from "raw".

Let me share this with you since I bet you would get a kick out of it.

I was buying 1/2 acre lots for $12,500. My "entry level" Split Foyer plan had 1206 sq feet and went for (gulp) $59950. My upper end had 1400 sq feet and went for 76950.

$300k for a house in Temecula sounds like a great deal.

John

That's deflation at work. I think people forget after a big boom like we've recently had here in CA, that the market determines the price, not costs. Once a product is on the market, cost is not really that relevant. I've bought many things in my life below production costs. Of course, what this does is highly disuade the producers from making any new product when they see that current market prices are below their ability to produce at cost. And I think this is why we will see a lot of home builders going bye-bye in the next two years. Again, count how many were around in 1988 and then again in 1996. And that down cycle was a joke to what we're seeing now.

"$300k for a house in Temecula sounds like a great deal."

Yep, Temecula is probably the best housing value in the U.S.A. at the moment in my opinion .

Hoping SD gets close to this level that would be great, I would definitely be buying a home in SD and saying that was the best Value in the U.S.A.

But somehow doubt that will happen, it would be nice for Me anyway, but I just don't think that is likely .

Anyway from what I understand SoCal population grows at about 1600 per day, just something to think about, at some point you will need to make a move or just get out of the way.

Good Luck.

RE is about to make it's next leg down. Hang tight.
http://www.foreclosureforum.com/stats.html

For historical reference. And it's getting worse.

Already passed 2007 NOD and NOT numbers and we are only 7 months into the year.