Home › Forums › Closed Forums › Properties or Areas › San Diego Inventory Sucks…
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poorgradstudent.
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November 11, 2012 at 2:50 PM #20270November 11, 2012 at 3:01 PM #754380
spdrun
ParticipantHow picky are the aforementioned buyers, AS IS, or with a lot of conditions? I’m still seeing condos that fetch ~7% on the dollar when rented selling in the 80-150k range. But the offers must be nearly immediate and ideally in cash.
(Example: $95k for a 1/1 condo in Mission Valley that rents for $900 and costs $250 for carrying and insurance = 7% after property taxes).
November 11, 2012 at 3:05 PM #754382
CoronitaParticipant[quote=spdrun]How picky are the aforementioned buyers? I’m still seeing condos that fetch ~7% on the dollar when rented selling in the 80-150k range. But the offers must be nearly immediate and ideally in cash.[/quote]
Well I personally don’t think anything wrong with being picky… But I think sometimes what happens is the thought process of “wow, prices are starting to dip… I’m going to wait it out and hope it goes lower…much lower”….Except that didn’t happen…
We all sometimes have this mentality…When I was deciding over a condo that came up, at the time I was sometimes I was agonizing over just tiny amount. Not that it really would have affected cash flow…It was pointed out to me that in the long run of things, because the price will look great a year or two from now…And that was spot on too. No way the same property could go for that price today…
Sometimes folks (inclusive) look at the pennies and end up missing the boat.
In other cases, I think sometimes we all have unrealistic expectations that we will find a killer deal all the time….
November 11, 2012 at 3:13 PM #754384CoronitaParticipant…Meanwhile…The rental properties are gonna increase to keep up with demand….
Yup…that explains a lot why there is a sudden rush for developers to create rental property complexes….
Me thinks it’s gonna be good times for landlords in the next few years… (with the exception of the “tax” issues)
Bay Area is going even more nuts…..Tenant lease expires next month. They’ve agreed to a $400/month increase…$3100/month for 2000 sqft, which apparently is still below market price for comparable… I wonder how much more rent would be in places like Cupertino…..
http://www.utsandiego.com/news/2012/nov/07/rental-update/
San Diego County is poised to add an average of 2,000 new rental units a year until 2016 to meet growing apartment demand. That rate marks an increase from previous years but is far below what other major cities are adding to their inventories, said an executive at commercial real estate company Jones Lang LaSalle in San Diego.“It’s been a supply-constrained market for several years,” said Executive Vice President Darcy Miramontes, referring to local numbers.
The demand for apartments in the nation has increased following the housing crisis, which brought on a flood of foreclosures and delinquencies. The surge in rental demand also is influenced by Echo Boomers, also known as Gen Y, who are expected to form the bulk of the five to six million new rental households in the next 10 years, based on a March report from the Bipartisan Policy Center.
Over the last decade, developers have delivered an average of 872 rentals a year to the San Diego market, so the expected 2,000 average is much more encouraging to see, Miramontes said.
For perspective, that 2,000 figure represents about 1 percent of the county’s total rental stock, Miramontes said. Also, other major metro areas are able to add an average of 10,000 to 12,000 units a year, far higher than we’re expecting in the next four years.
“We haven’t seen that kind of growth in 20 years,” said Miramontes, referring to the rental growth seen in other metros.
November 11, 2012 at 3:25 PM #754385ParticipantWhich is why I’m looking at (inland parts of) NJ now. It became very cheap even before the hurricane, which will probably depress prices even in unaffected towns in the short term. In the medium term, there’ll be a slight housing shortage till people rebuild. Long term, prices will probably rise due to inflation. Most buyers don’t look beyond the near-term though, and another storm hitting on the eve of a full moon is unlikely in the next 25 years.
(If I buy something in the next month or two, I’d be tempted to rent units at cost for the next year to affected families, then turn a profit a year down the line.)
Regarding Bay Area: Danger, Will Robinson! Danger! Tech Bubble 2.0! Greater than Manhattan-level rents in SF are not sustainable for the long-term.
November 12, 2012 at 12:32 AM #754437Jazzman
ParticipantAccording to a fairly recent Redfin survey, buyers’ main concern is lack of inventory. However, a majority of sellers still think it is a buyer’s market. So something doesn’t quite tie up here. Inventory may be low but some of the reports like this make is seem like bidding wars are going on everywhere and forcing prices up. As much as some corners would like us to believe this is true, the reality is more likely that many buyers hold off, just give up, or don’t bother at all when faced with over-competition. If you’ve made 80-100 offers (an offer every four days) it may be your strategy needs reviewing. There is only one strategy when faced with a scenario like this, and that is “don’t buy!”
November 12, 2012 at 1:02 AM #754443ParticipantOr you’ve been saddled with a broker who has a “reputation” and is not being taken seriously.
November 12, 2012 at 6:20 AM #754444carlsbadworker
Participant[quote=Jazzman]According to a fairly recent Redfin survey, buyers’ main concern is lack of inventory. However, a majority of sellers still think it is a buyer’s market. So something doesn’t quite tie up here.[/quote]
That’s easy to explain. Just look at the graph on the right bottom corner. Price is up but the gap between the list and the the sold is widening.
November 12, 2012 at 7:07 AM #754445CoronitaParticipant[quote=Jazzman]According to a fairly recent Redfin survey, buyers’ main concern is lack of inventory. However, a majority of sellers still think it is a buyer’s market. So something doesn’t quite tie up here. Inventory may be low but some of the reports like this make is seem like bidding wars are going on everywhere and forcing prices up. As much as some corners would like us to believe this is true, the reality is more likely that many buyers hold off, just give up, or don’t bother at all when faced with over-competition. If you’ve made 80-100 offers (an offer every four days) it may be your strategy needs reviewing. There is only one strategy when faced with a scenario like this, and that is “don’t buy!”[/quote]
I think you still have a lot of “buyers” in bizaroworld…You know the ones that still think 50% off is possible today on the ocean front property in SD…. It’s like going dealer to trying to buy a Ferrari at 50% discount because you think the economy is bad. The economy might be bad, but it’s never *that* bad….I think they make excellent perpetual tenants.
November 12, 2012 at 7:22 AM #754446ParticipantWell, some bum-losers did buy property at 1.5-2x current prices back in 2005-6. They’re now showing up on homepath.com and auction.com — every property needs its 15 minutes of fame.
December 7, 2012 at 12:53 AM #755888an
ParticipantThe inventory # seems to keep on getting worse by the day. Currently, there’s only 19 active SFR and 8 Condo/TH for sale in my area. That’s tiny for an area over over 70k people.
December 7, 2012 at 6:51 AM #755895CoronitaParticipant[quote=AN]The inventory # seems to keep on getting worse by the day. Currently, there’s only 19 active SFR and 8 Condo/TH for sale in my area. That’s tiny for an area over over 70k people.[/quote]
AN…At least in MM, it seems like buyers are out in full force.
I tried to put another on a 1/1 in MM recently that was asking around $135k.,..full price cash offer just for kicks…It would have just been so-so as an investment, but what the hell I thought. I think my offer went in day after it was listed or close to that. Anyway, ended up I was the 6th offer…..and that was even before any showing or the open house that was being done that weekend…Yup… Didn’t get a counter or anything (not that I would have entertained any counter above asking there)…It’s also not the first time that that’s happened recently..So…yeah, it’s kinda brutal right now in your submarket.
Fwiw… Starting to see 1/1 going for higher $140k (some went for $150k recently), when things were in the low $130ies beginning of year…. Also 2/2’s that went for high 190ies-200 it seems now entering escrow around $210k….
Not looking good for buyers in MM right now… And with rent prices holding where there are at, more and more people are gonna try get some game…
Just be glad you’re not in the bay area though. It’s even more ridiculous there. There, people are resorting back to writing letters to owners asking if they plan to sell.. I’ve been getting them again…
December 7, 2012 at 6:58 AM #755896CoronitaParticipantFWIW: about those Pardee attached homes in MM that a lot of people said are overpriced… I’m on the mailing list and paid a visit there recently. They’re selling pretty well…Most already sold in the available phases…They must be owner occupied, to my understanding…Didn’t check out the SFH there…
Pardee is probably running of out things to sell… (Just kidding about that…but..)…Guess what Pardee is up to in my submarket?
http://www.altadelmar.com/custom/28 of them are marked for as “custom homes”
December 7, 2012 at 7:04 AM #755899ocrenter
Participant[quote=flu]FWIW: about those Pardee attached homes in MM that a lot of people said are overpriced… I’m on the mailing list and paid a visit there recently. They’re selling pretty well…Most already sold in the available phases…They must be owner occupied, to my understanding…Didn’t check out the SFH there…
Pardee is probably running of out things to sell… (Just kidding about that…but..)…Guess what Pardee is up to in my submarket?
http://www.altadelmar.com/custom/28 of them are marked for as “custom homes”[/quote]
oh question, question!!!
will I be able to drive my golf cart from my custom lot down to Grand Del Mar for my daily breakfast? 😉
December 7, 2012 at 7:09 AM #755900CoronitaParticipant[quote=ocrenter][quote=flu]FWIW: about those Pardee attached homes in MM that a lot of people said are overpriced… I’m on the mailing list and paid a visit there recently. They’re selling pretty well…Most already sold in the available phases…They must be owner occupied, to my understanding…Didn’t check out the SFH there…
Pardee is probably running of out things to sell… (Just kidding about that…but..)…Guess what Pardee is up to in my submarket?
http://www.altadelmar.com/custom/28 of them are marked for as “custom homes”[/quote]
oh question, question!!!
will I be able to drive my golf cart from my custom lot down to Grand Del Mar for my daily breakfast? ;)[/quote]
Only if you don’t mind the high voltage power lines running along parts of the new tract…. Yeah, I’m trying to figure that one out… If I’m gonna be spending $2million on a custom home, those power lines better not be visible…..
The 28 custom homes will be built by pardee I think BTW….
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