San Diego Housing Bubble News and Analysis

I don't know about everyone elses experience with agents but our almost purchase in 2004 was with an agent that was a family friend new in real-estate for about 3 years. She left it up to us to find a good loan and suggested a loan company only once. Thankfully I read the documents before signing a interest only loan and decided I would putting my family into serious financial trouble especially when we were renting a perfectly find home for 50% percent less than I would have paid for a home loan. This is when my eyes were opened to the bubble trouble

This article really gets at the issue that rubs me. When I'm out buying a house, my agent is really working for the seller. After all it is the seller who is going to pay them. I was working with one agent and I can't tell you how often the question, "Hey whose side are you on?" crossed my mind as we looked at houses and talked about developing a strategy to get a low price for the house. There is something so wrong about the whole agent commission thing. I probably haven't expressed it well, but I can't shake the feeling that this is one deceitful business relationship.

Most agents represent ONE party, that being themselves.

No transaction equals no income, many are just used home salespeople, with little background, just like most loan people.

Most don't exactly represent the buyer OR seller.

The seller is "paying" with money that is taken from the buyer.

I do not believe they have a fiduciary responsibility.
(But they should)
Most don't even know what that means, nor can they spell it.

I suggest that is THE BEST first question you can ask a real estate agent OR loan person...
IF they don't know what it means, move on.

I have been on the sidelines. If I decided to break my anonymity sdr or SDR could prove it. Now honestly that wasn't a big change for me because I was never big....but I did stop selling houses, curse out a few mortgage brokers and hang it up. Obviously, I am trying hard to believe in karma.
I don't hate the agents or brokers. How many people would quit their job because the nature of the game changed radically? Besides that people didn't give high ratings to real estate types when I got my license in 1998 and they never will. My instructor for the basic licensing requirement brought a chart with relative respect by trade or profession. RE people were right there with used car salesmen.
My experience also proves that very few people would have listened to someone giving warning. I actually had people call on referral and when I told them it wasn't a good time to think about SD homes they told me "what the hell kind of real estate guy are you anyway". I think they know now.

Now I get frequent calls from people who are screwed and want to know what to do. I feel bad for them and offer whatever I can ,which is basically nothing. They do confirm what the bad boys on this blog are saying about being greedy and stupid with the equity in their houses if they ever had it. Some of them were on easy street for having bought in the 90's too.

With respect o representation you can alway speend the money and hire an attorney. With respect to a real estate agent my though is that they are transactional. With the infinite amoutn of information I see their role as identifying what it is I am looking for and helping me find the property.

In an ideal situation you can give them a set of criteria and they can quickly identify the 3 very best properties that match that criteria.

While the internet is a good starting point it is almost too much information and often times needs to be filtered. A good realator can help in the filtering process and remind you of what is important about the transaction.

Asking them to take on a fiduciary responsibility is "scope creep"

I would have to say that there are alternatives out there for everybody. I have told my story many times over. I got tired of paying commissions so I did it for myself initially. Yes things progressed but I was tired of paying my own sister in law full commission.

It is much easier to complain about things then to do something about it. I do believe there are PLENTY of poor agents, brokers, and others in the profession. I cannot worry nor change thier performance. There are also plenty of good ones as well. Those people who have had bad experiences are much more diligent in posting thier experiences then those that have not. Yet I would bet there are people right now who are reading this sentence who actually did have a good agent or realtor or broker.

There is another thread on a recent post about people who have found mold in thier home, who warned about tilted slabs, who warned about mercury in the water for homes that you are going to buy. How many people have had good experiences and posted in that thread about the home they bought and didn't have that problem?

The realtor did not sign on the dotted line when the buyer decided to do the loan. The realtor did not make the decision. The cigarette companies that peddle poison to people don't plunk down a few bucks at 7/11 to buy a pack of camels. Yet they shove as much advertising and sponsorship down everyones throat in our country as they can legally do. Are you dumb enough to smoke them? The USA is 100% about consumerism. My observation is that if you do not have restraint, you will never succeed whether the issue is buying houses, cars, flat screens... whatever. Our society is and will always be about people pushing other people to buy and overspend. It is enforced and encouraged by our government, by many professions, and is embedded in our fabric. Lots of blame to go around everywhere...

Agreed the system is not optimal and many professionals in it are devious and scoundrels and I could go on about the commission structure... Yet there are good realtors out there... alot of them... and they did NOT recommend stupid vehicles for financing. The good realtor takes a long run picture at the client and knows that good advice will be THE BEST avenue for this sale, future sales, and referrals.

Unfortunately, the consumer has to find the good realtor and that is tough.

SD Realtor

"Asking them to take on a fiduciary responsibility is "scope creep"
I have enjoyed the tidbits you have inserted in your posts where you are drawing on you managerial expertise. People here are proving why so many have trouble with RE types. They abdicate responsibility to someone who really is not, generally speaking, in a very sophisticated role. I think to some extent crying about it puts them in that camp.

"Scope creep";Great expression. I do think people in all fields SHOULD advocate for their clients though.

Another thing , all rookie agents, and mortgage folks gets used and abused by buyers and sellers, sometimes by friends. This is no excuse but it can easily be seen as a heartless situation by all parties(recall how many people are telling Raptorduck to dump his agent who has worked very hard doing the best she can). In fact everyday that you go out into the world of sales you can be confronted by phenomenal bull shit. Don't be surprised that many aggressive, thick skinned and self preservation minded people are at the forefront. This has been true forever.

I am not an agent or related to RE in any way, other than owning a home.

The original post is very time sensitive. Sometimes it is good to buy, sometimes not. However, the agent can't and should not make the buy or loan decisions for the buyer because nobody knows what may happen (except for those on this list that claim to know).

I think it is a very likely possibility that if an agent discouraged a family from buying because they really could not afford it, they would get reported, sued, called racists if the family was a minority, etc.

The agent is there to market and sell the home. The buyer is responsible for their finances. The lending institutions are in the same boat as realtors with respect to declining an application. They need to blindly apply the current corporate policy otherwise it is discrimination.

So I fault the lending institutions for bad practice, but in the end buyer beware. There really is no other way.

SDR I know your story,mostly by taking away the ten foot pole you were using to stay away from me and beating it out of you ,sorry ;).

I am not sure I would repeat what I have done with regard to withdrawing from the business completely(or cursing out mortgage people) .Maybe I was taking too much responsibilty? I could have helped a few sellers in my "circle of influence" . I didn't farm (or pimp) at all not even passing out business cards. I guess I am still basically on the sidelines. There are a few listing I could go for,not sure I want to be stuck between reality and most sellers. The exposure to you, sdrealtor,bugs and the situations various posters are in, is great.

does the buyer have a realtor similar to the seller ?

"Asking them to take on a fiduciary responsibility is "scope creep" "

In other words, a Realtor representing you doesn't actually represent you.

Instead of creating legal requirements that realtors would then have to straddle, against their own interests, perhaps it is easier just to legislate some truth in advertising. Congress gave up pretty quickly on making cigarettes healthy and pretty quickly settled for some big red text on the side of the box to the effect that "these things will kill you, eventually."

The next time I turn on the tube and watch some likeable figure in a yellow jacket blather on about how he is my friend, perhaps there will also be something short and pithy flashing across the screen to the effect that "Realtors represent sellers and themselves, not you". Perhaps not.

Rational expectations

This is a rhetorical question Bob? There is such
a thing as a Realtor established designation for "buyer's broker". Generally speaking the agent for the buyer is just another agent who lists and sells and is seeking the commission as agreed via the MLS.

Buyers can also represent themselves in some types of deals or go directly to the agent whose sign is in on the property.

The problem in general goes back to an educational system that is broke. There is no way you should be able to leave high school without having learned basic finance.

We live in an indulgent society and unfortunately their are far too many people who choose to shift all responsibilities to other parties. They do not value the learning process. A realator should and I emphsize should be an instructor. They should help guide you and explain your options. They should help you transact business. I think by and large most do a good job. But they shouldn't have to do all of your homework for you. They are not the one who makes the decision. People need to take ownership for their own actions.

"The realator told me to buy more house than I wanted. The mortgage guy qualified me for more money than I could afford." Cmon.

I just found this website a few days ago and found this quite facinating. I am from Toronto, but I have been to San diego may times. I was considering buying a house here in San Diego in 2000 but at that time the exchange rate were 1.55 cdn to 1 us for me to buy a home here for 700k and decided against it. After many years of regret, I came back last year and waiting for the market correction with cdn dollar 1.03 cnd to 1 usd. This is the first time in 50 years I believe. This makes it affordable for me to buy.

I have been looking at Zip Realty website for months and have been actively following the news and market. I had several calls from a San Diego Agent yesterday from San Diego from Zip Realty. He's telling me that some of the market in San Diego is still appreciating in price and it's a fantastic opportunity to buy now because the market have been corrected. He said San Diego is still hot, I should make my purchase now before the price goes up.

He told me that I should not listen to the news, it's crap and this blog here... people do not know what they are talking about. (I found you all very insightfull and appreciate the information shared here very much since I am not local. This gives me a lot insight into the market. Thank you.). This makes me wonder.? If the market is so hot, why would he even bother to call me long distance to convince me? Shouldn't he be swamp with buyers dying to get into this HOT market? He told me 1 million dollars doesn't buy much now a day as it used to. This is the kind of agent that creates the housing bubble, subprime mortgage, an irreponsible agent that we are talking here that only look out to the number one man (himself and his commission). I am Canadian, it does not equal to stupid! I feel insulted and angry. I have been looking at the Zip Realty website and found that most housing price has not really corrected, a lot of people purchase their houses in 2005 and 2006 are at the height of the market and are still listing for a 100k+ profit. I mentioned this to the agent and he got angry with me and said I should not based my assumption on something that I don't know. Infact, Zip Realty website listed the purchased price and the purchased date that's how I know, thus, made that assumption. I am suppose to do listen to this agent who is suppose to work for me! Help! Any insight? Can anyone help direct me to someone more reliable and advise me on what area in San Diego is best for my investment? I am looking for a home!
My husband wants to buy a home in Irvine, Tustin, or Orange, but I like San Diego. Where would you buy???

thanks

abbey

I am looking for a good agent like you please see my comment posted.

thanks

Listen to your own advice!

Abbey, that's the best advice I think any of us can give you! You said it yourself. Most of the market has not corrected. And I'd add that particularly the top end of the market has not corrected.

Given that the dollar is still falling, that the housing market has still got a lot of correcting to do, why buy anything? Why catch a falling knife? And for God's sake why listen to this realtor that keeps calling you and that you can see is just looking out for himself?

Abbey, you sound like you've got a lot of this figured out already. Don't rush into anything. You'll only be able to get something better the longer you wait. Don't let anyone tell you that you need to buy now, or it's going to go up. It will sit at the bottom for a long time before you "need" to make your move. Things change very slowly in real estate.

XBoxBoy

C'mon xbox, I think Raybyrnes almost had a client.

Abbey you said this...I came back last year and waiting for the market correction with cdn dollar 1.03 cnd to 1 usd. This is the first time in 50 years I believe. This makes it affordable for me to buy.

Do you expect this not to last? How about other posters?
I am sure that your situation is very interesting to many posters here Abbey. They might not be following this thread though.

Perhaps you can post a thread "My Family is Canadian and we are thinking of buying in California"? describe how long you have waited and the exhcahnge rate situation.

"He told me that I should not listen to the news, it's crap and this blog here... people do not know what they are talking about."

Abbey, did he specifically say that this site is crap??? I ask because there have been a number of trolls posting here over the past six months. I honestly think this site is closely monitored by realtors and the like.

Sorry Rustico,

I have nothing to do with ren addredal esate and not looking for clients off this site.

I will say this mouch. For a foreign investor they not only have to guage the housing market but also have to play the currency exchange.

What would the scenario look like if the Canadian Currency currency began to go in the other direction. For this you need to be able to determine velocity of change and compare housing vs currency. Someone else can do the mathon that one.

Obviously I was kidding Ray. You have done such a good job describing the situation of realtor reponsiblity to clients and Abbey didn't say who she was referring to so I thought you fit the bill.

My family is Canadian!. I am looking to buy into California just in May of this year seriously after so many visit to the States. I love the California Sun and lifestyle except for the guns and earthquake but it's still overshadow to the sun you all got in California. I lived in Canada for over 30 years, every year seems to be colder and colder. I have had enough of the weather! I want some where warm so that eventually that we could retire and have a good quality of life for our kids. Living here means that we could buy health insurance for 3500 cdn/year for our family. It's very affordable considering the tax we pay in Canada 57% tax and 14% on goods (after you pay the taxes that you take home). Canada is a good country, I feel safe here but dispise the weather so much!

I did not expect the usd dollar to drop so much. Banks in Canada are predicting 1.05-1.07 to 1 usd. I just expected the housing downturn because it was a natural way to be. Everything goes up must goes down! I honestly believed that the housing would slump in 2004. Therefore, I did not speculate in the housing market instead it shot up. I have cashed in my house 2007 and made a gain and waiting for the right time to buy. I am not looking to buy immediately because I am not currently in the US, I have told my agent that not till summer 2008 when my kids are off school then I can be there to look. I am narrowing down the areas for research. I am not rushing into anything, I have waited this long and can wait longer. Infact, the longer I wait the better it would be. Like some of you have mentioned. I just need help with narrowing the areas. I know many Canadians friends of mine have mentioned going down south to buy!

Thanks

abbey

I am looking for a home!
My husband wants to buy a home in Irvine, Tustin, or Orange, but I like San Diego. Where would you buy???

San Diego of course as long as my wife allows me to decide.
Fortunately she wants to be here as much as I do. we live in a semi-rural setting about 45 minutes from downtown SD. My wife speaks french BTW . I wanted her to post for me and make everyone believe I was tri-lingual but she went to do errands and left me with my 3 year old to fix the space shuttle(re-route pipes under the house for the laundry).

You really understand things well, although many people here think anytime in 2008 will be to early to get some of the best deals. I don't agree but will gladly admit that I am wrong when the time comes.

If you post more about your plans for the future specifically what types of properties you like, I think you will get some exhange of ideas from the blog. I know I keep saying that and not much is happening. Some periods of time are slow. Many people link to the listings they find at other websites,SDLookup.com is good because it doesn't require registration.

I do recommend again that you start a new thread. Many people have probably already decided this thread is boring or even pathetic.(not because of you of course, but the earlier stuff)

Best wishes

You Can Take the Boy outta NY...

but you can't take the NY outta the boy...

" I had several calls from a San Diego Agent yesterday from San Diego from Zip Realty. He's telling me that some of the market in San Diego is still appreciating in price and it's a fantastic opportunity to buy now because the market have been corrected. He said San Diego is still hot, I should make my purchase now before the price goes up.

He told me that I should not listen to the news, it's crap and this blog here... people do not know what they are talking about"

this made me see red and utter any amount of ear curling curses...

Abbey, not all are like this...

SDrealtor and some others here represent TRUE professionals... not the vulture types that skew the perspective ( whats said about folks being something on the order of 17 times more likely to report a bad experience as opposed to a GOOD one is as true as true can be)

i think patience is needed...many MAJOR voices ( read NONBLOG) in the industry are quoted as saying the decline will be lasting long into 2008 or 2009... ( and they are usually conservative)...

Ps - used to live in Buffalo and am a fan of Canada in general.

Rustico,

I got you. Good Post I chuckled.

O.K Ray that's good.

Voz appreciate the compliment.

Abbey, the next time the Zip Realtor tells you that things are so great just ask him why volumes are down so heavy if things are so great. You may even want to tell him that in 2006 many guys like him said that things would be better in 2007 but that didn't seem to happen did it...

So ask him to show you hard data that would indicate that we are anywhere near the bottom.

SD Realtor

Thank you for your comments. This is my first time ever being on a blog. Never done this! I am quite lost with all the abbreviations and jargons. I am sorry if I offend anyone. Still learning my ettiquete. I am interested to know if El Cajon, Rancho San Bernado, and Mira Mesa, are good areas to look? Is it worthwhile to look at foreclosure homes, short sales, etc.. What website to look for these search. Some of you may be wondering why I would still be talking to this agent. It is because I get access to Zip Realty website. He will cut me off and I won't be able to search. I don't know where else to look. I will be looking at ADLook.up as Rustico suggested. Thanks. Any other suggestions?

Another thing I am wondering...rumors or false? Is it true everyone in California own firearms? Why? Please don't get offended by this question because it's illegal here. I find it scary, I also have kids Rustico..

Thanks

abbey

http://www.sdlookup.com/

Everyone in California does not own firearms. In most areas you will not feel like you are surrounded by guns or in danger of anything. There are gangs but most people don't live around areas with lots of gangs, They tend to be very concentrated in certain areas. I would not start getting to know the county with Mira Mesa or El Cajon. No offense to anyone who likes those areas. I think you mean Rancho Bernardo Sdlookup zip code 92127&92128. That is probably a good representation of a Middle class fairly quality area in San Diego. In fact it is more or less middle of the road in many repects.Poway,92064, is a very nice family area with a wide range of housing types.It border Rancho bernardo. These are not close to the beach(about 1/2 hour).

Abbey, where do you get your information? It seems like you're making naive generalizations (everyone in CA has guns) and you're spending a lot of time listening to cold-calling salesmen (RE agent). I get the feeling that after reading everyone's advice here you're gonna get an overpriced house and a gun.

The area you choose do live in depends on many things. San Diego is a LARGE county so you can't just pick Rancho Bernardo or Mira Mesa. There's a lot to consider, like schools, work, traffic, shopping, etc. it really depends on what you want. You can't make generalizations, and lumping all the areas of San Diego together is one. Tell us where you'll be working, what your price range is, etc. then you can get some real advice. Right now you're just trolling.

Many in Mira Mesa own firearms. I think it is required to have local ordnance.