San Diego Housing Market News and Analysis

There was an article in Bloomberg that investors were buying distressed mortgage paper in IB for twenty cents on the dollar, so apparently so!

Thanks! I found the article. It says IB is "arid, hilly." I'm thinking about the flat part of IB near the beach--is that a good long-term investment?

"... On a sunny day last month, Gutierrez knocked on doors in Imperial Beach, an arid, hilly town just south of San Diego. There were three Imperial Beach houses on the spreadsheet provided by the mortgage servicer that was selling them [mortgages]; none of the borrowers had made a payment in months. Gutierrez was ``driving'' the neighborhood, as he calls it, to determine what he would bid on the pool.

In Imperial Beach, 15 homeowners lost their properties to foreclosure in the first three months of 2008, compared with four in the same period last year, according to DataQuick. The town's population is about 26,000, according to the U.S. Census Bureau. The median single-family resale price in town fell 19 percent in the first quarter compared with a year earlier, DataQuick said.

Gutierrez said that because of the legal fees, he avoids foreclosing except when he has to ``clean'' the title of liens or other legal judgments. He said he never collects borrowers' monthly payments because he doesn't want his life to get too ``complicated.''

At a one-story, L-shaped stucco house in Imperial Beach with four-foot-tall rose bushes and an American flag hanging from the garage, 62-year-old Armida Leos answered the door. Her 73-year-old husband, Gilberto, a former U.S. Border Patrol officer, had to quit retirement and get a job as a security guard when their monthly mortgage payments jumped to $3,200 from $2,400, she said.

`We're Losing It'

``I feel really bad for my husband because he worked his heart out to get us into this house and now we're losing it,'' Leos said.

Gutierrez's spreadsheet said the Leos family owed $455,000 on their mortgage. Leos said she and her husband spent $50,000 fixing up the house when they moved in three years ago. They had just received notice from San Diego County that their property tax was being reduced because the house had been assessed for $193,000.

Back in his pickup truck, Gutierrez said he was prepared to offer Leos and her husband $5,000 to move out. He made note of the town's falling home prices and how the house didn't seem to be that big.

``That's not a real selling point,'' he said.

To contact the reporter on this story: Bob Ivry in New York at bivry [at] bloomberg [dot] net.
Last Updated: May 15, 2008 00:01 EDT

Here is some additional information about IB:

http://www.city-data.com/zips/91932.html

To each his own, but IB has very little going for it. It is close to military bases but ask a serviceman if he wants to have his family in I.B. while he is gone. Lots of dive bars, extremenly low income, bad schools, shares air with T.J., the only town they can pick on is San Ysidro, I'm sorry what was the question again. It even lacks chain gorcery or retail stores, I figure if a Ralph's or a Target won't go there, my demographic work has been done for me already. I do have a friend that owns a rental there but he owns it outright, bought it decades ago and won't go there without a gun and in daylight, that's enough for me.

It was beginning to show the first signs of gentrification at the end of the bubble but it seems to have slid backwards again. There were plans to tear down a strip mall on Palm and replace it with a new one that (I think) included a Trader Joes. I’m not sure if that is still on the table but I doubt it.

The schools are really bad. I know two families who moved to IB in the last two years. Both stayed less than a year before moving out again.

I think that IB will probably gentrify at some point. It is the cheapest beach community for 300 miles. If young professional couples “discovered” it or it began to attract vacation home buyers, it would start the ball rolling. There are a number of warts that need to be frozen off first, though. There are lots of crappy apartments mixed in with single family (terrible, terrible city planning). If these converted in large numbers to condos, that would be a great thing for the city.

Thanks for the opinions! Just to be a devil's advocate, the descriptions could apply to Pacific Beach also, a couple of decades ago:

"plans to tear down a strip mall on Palm and replace it with a new one that (I think) included a Trader Joes"

"The schools are really bad". Here are the state test scores (2007 base API):
IB elementary 782
Crown Point Elem. 777
Pacific Beach Elem. 836

"There are lots of crappy apartments mixed in with single family" True for Pacific Beach also.

PB has a lot of SDSU students who drive up rents and keep the area trendy; they don't just bring problems. Google Maps says that downtown IB to the Hotel Del Coronado is 13 minutes, and 25 minutes to SDSU. SDSU to Crystal Pier in PB is 21 minutes. So college students should be interested in IB.

Of course an area can fail to gentrify for many more decades...