San Diego Housing Bubble News and Analysis

There is tons to do here and the lifestyle is as good as it gets for upper middle class professionals anywhere in the US IMO. Encinitas has a vibe and a sense of place that most of SoCal lacks. If you cant feel that, I cant help you.

Anyone have the sales numbers? you have to have a descent amount of sales to start pressuring prices.

Like sdrealtor said, the vibe is like no other. Hopefully if I play my cards right in 15 years I will be sitting on deck looking at the ocean. I am no professional BUT have been watching the Encinitas/So. Carlsbad area for way too long waiting for prices to start drop. I know that there are some that say that these areas are "immune" to big price drops but I think that its only time and will be quicker than most think. This area peaked after Temecula and the outlying areas therefore it would make sense that it would lag in price decreases. Also, living in the area has opened my eyes to how many people cannot afford the lifestyle that they are living.

FWIW- The people that told us that we were crazy to sell our house when we did are the same people that are telling us that this area will never see the decreases that we are anticipating.

Check out what Bruce Norris and Mr Mortgage are saying. They both conclude that much higher dollar mortgages will come under stress in 2009 and 2010. This will be the high-end areas like Encinitas and the coastal communities in general.

My thoughts…

Year round temperate weather
Proximity to good beaches
Highly rated schools
A (tough to define) mini-Maui surfer/beach hipness
A somewhat common vibe of citizen’s coolness, without Del Mar pretense
Diversity of housing styles, ages and price-points
Well maintained parks and trails
Spectrum of casual boutiques to high-end stores and restaurant selections
Commutable to two large employment centers (SD and OC)
Access to I-5
Environmentally friendly polices, practices and events
Medium panache

With that said, Encinitas housing prices are not immune to RE cycles and the lending insanity of the last 5 years.

NCN

Encinitas and South CBD are great places to raise a family if you like the suburbs.

As a Los Angeles native, it took a while for me to get used to it (still not there completely) because it's pretty bland, race-wise. White and brown (both Lat Am and Asian), and that's about it. Sucks if you like an active night life.

OTOH, it's quite safe, clean, and shopping is pretty convenient. You have good schools, nice libraries, decent beaches (which can be way too crowded in the summer).

Not bad, but the houses ARE too expensive. Some are definitely coming down, though. These things roll from the outskirts-in, and from the poorer n'hoods to the wealthier ones. The Village Park area has come down rather significantly, and the area around RSF Rd and Melrose (in Carlsbad, with San Marcos schools, I believe) are certainly down from the peak.

Just have to give it time if you want to buy in these areas. We've been waiting for over four years (but still live here as renters -- yay!), and will probably have to wait another two or more. :(

If you think that 'vibe' is going to keep prices up, youre not discussing this correctly. Thats bubble talk. Bubble talk is no longer applicable and may not be for a generation. With credit getting more difficult to acquire, stagnant income, and enormous inventory. Real prices will have to come down by 50% at least. If we get %10 unemployment in the next few months expect the bottom to drop out. Conversely, nominal values may stay stable if the fed and treasury raising (printing) more money than we have ever witnessed.

I love you Encinitas, but youre overpriced.

You miss the point. I never said it wasnt overpriced just expensive. Whatever price level we reach, Encinitas will remain relatively expensive as compared to other areas for the reasons outlined above.

BTW, does anyone have an active nightlife after 40 with a couple kids at home?

Vibe? LOL. Spoken like a true realtor. The only vibe I felt when I drove through Encinitas was 'Pleasantville'.

I am from beach So Cal. Obviously some on this board love Encinitas. To me it is indeed pleasantville. If you factor out the beach and temperate weather and look at culture (people) it is not high up the scale. I think it is high on the scale of people who live there. But what place isn't? Go ahead and spend the big bucks and I hope you get a great house if that's where you want to live.

I lived in Encinitas for 30 years and it was/is a very nice place to live. The big economic picture, however, will catch up with that area. Has anyone noticed that stocks are down 25 or so percent, the ecomomy is crumbling, California is in the beginning of a severe recession, unemployment is 7% and going up. The reasons are almost too numerous to mention. Encinitas is not immune to price declines.

Accoding to Zillow, the 92024 area code has dropped only about 11.5%, with the bulk of that in the last year. The trend is decidely DOWN.

I love Encinitas and will be looking to buy their in 2011. Unemployment is going to ruin all markets. Watch the stock market get crushed with every new BLS report. And watch RE sales volume erode as well. It's the one indicator that no one argues with. It destroys demand and raises defaults. And more is coming.

We are heading in the wrong direction guys. There is no question whether it is overpriced. Overpriced is a measure of something relative to its own empiracal value. Expensive is a measure that compares the value of something to something else. While Encinitas won't always be overpriced, it will always be expensive.

"Always" , a dangerous word in a dynamic world.

While Encinitas won't always be overpriced, it will always be expensive.
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Yes, just as Beverly Hills, Malibu, La Jolla, etc. will always be more expensive than O'side, Escondido, Van Nuys, etc. They always were, and probably will always be more expensive.

The point some are trying to make (I'm in this camp) is that the ratio between high/low-priced areas should not significantly change over time. Right now, the spread is very high, and unlikely to stay there.

The lower end has probably seen the greatest portion of its decline (though will likely see more, just at a slower pace). The high end is just beginning. These things **roll.** It does not happen to all places at exactly the same time.

BTW, it's much more difficult to replace a $100K+++ job than a $25K job -- especially in a **global** recession/depression where the stock markets and credit markets are constrained (less capital to fund new ventures, among other things). People will always need to shop at Wal-Mart. They will not always need to upgrade their software. The high end of the job market is more dependent on "wants" while the low end is more concentrated around "needs".

The money from starter homes (not uncommon to see $200K+ down payments received from the sale of a crapshack in O'side during the peak) will no longer be able to prop up the next tier...

We have a long way to go, but, "to the patient go the spoils."

BTW, does anyone have an active nightlife after 40 with a couple kids at home?
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Ouch! Truth hurts! ;)

Actually, I was thinking with the amount of new technologies that have been developed over the last decade or two that it was the low end that was under greater threat and some of the high end (realtors, middle managers). I think a lot of manual labor, repetitive task, menial task jobs will be automated away by the next generation. If you run a company and you can have a machine perform the same duties then you will tend to prefer the machine. No sick days, no strikes, total cost is better understood and so on. What we have seen in the last job loss figures are losses in Manufacturing, Industrials, Financial. Alot of these types of jobs are disappearing. Primary example is realty the internet has completely altered the real estate market. The MLS for a given area is available free of charge online there was a time when the only way to view it was via a realtor. Times are changing we are moving into the era of technology and eventually robotics...

There will always be places that have move value than others. It's a fact of life, get over it op.

Also factor in the retiring baby boomers. There is a ton of them and they won't die away for another 20 years.

Prices will come down a bit on the coast, but will never be a Lemon Grove...or a Houston or Atlanta.

I hope prices drop at least another 20-30% for overpriced San Diego markets. Then I can buy.

Everyone should read this:

http://mrmortgage.ml-implode.com/2008/10...

It's about the financing. That's the RE game! The toxicity train is about to hit the better hoods.

People have short memories. Although always more expensive than the inland areas, 5-10 years ago it was definitely within reach of the middle class without the "innovations" in the financial sector that are currently imploding.

Give time a chance to work its magic.

Encinitas versus Point Loma versus PB

Encinitas is BORING! It is way far from the fun spots in downtown or PB for young guys like me. I'd rather own and live in PB or even Del Mar/Carmel Valley. There is nothing there in Encinitas. Maybe if I had 4 kids wifey and family it might make sense or if I was a hardcore surfer.

When I was a kid, there was nothing great about Encinitas and it was not expensive by any stretch. So everyone that talks like it was the way it is from back in the day, does not know what they're talking about. Get rid of high paying jobs near it, and there goes the price.

You guys are right. It sucks up here. PB is the best, stay there.
92024
P.S. It's George Bush's fault that prices are so expensive in Encinitas. He is also to fault for all the high oil prices and he actually flew one of the planes into the twin towers! And SDreator, quit telling people how great it is up here. You have done that way too many times on the forum. The correct answer is that is sucks.

10-12 years ago it was relatively inexpensive. If memory serves when we bought at the end of 95, Encinitas was not much more than expensive areas in Poway and RB.

It was (is?) the most affordable beach city not named Oceanside north of downtown. Our criteria was west of I-5, a price that we could survive on my 35K or her 40K salary(provided we only ate ramen), that left out Cardiff on south, and Carlsbad did not have much west of I-5 back then, so Encinitas it was.

I do think a lot of the housing east of I-5 to be at best no better than Carmel Valley and a bit sedating. The strip west of I-5 is a different story. You have Swami's, you have what appears to me the highest concentration of yoga studios in San Diego, you have old style cafe's down the street from fancy Italian Restaurants down the street from taco stand on Hwy 101 in downtown Encinitas. You have the beach surf culture. The housing styles and are all over the map. On our part of the street there isn't even a sidewalk or streetlight. In comparison, I do find Carmel Valley and Poway a bit boring in its sameness.

Personally I prefer Point Loma for the older neighborhood and proximaty to downtown, but we could not afford it back then either (plus there is no beach). PB, OB are certainly funkier, but Encinitas doesn't feel a bit safer. For us, it was the sweet spot of affordability, , beach, funkieness, schools. Probably still is.

MadeInTaiwan,