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spdrun.
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June 10, 2016 at 10:58 AM #22007June 10, 2016 at 11:05 AM #798585
profhoff
ParticipantTake a look at this example:
Closed August 2015 after several price chops and now, less than a year later, back on the market at a hefty increase.
I saw this place several times last year. Opening up the floor plan was a good idea, but it was a flipper crazy town of bad decisions.
Well staged and looks good in the pictures but had a lot of issues that I think would significantly affect livability, not to mention expenses down the road.
Anyway, here it is again, with the same listing pictures as last time and the same listing agent, but with a much higher price:
http://www.zillow.com/homedetails/14105-Recuerdo-Dr-Del-Mar-CA-92014/16764650_zpid/This seems scary to me.
June 10, 2016 at 11:09 AM #798587ParticipantHere’s another one.
FSBO, gotta love that, significantly above a MODEL MATCH comp that sold a few months ago. Model match was completely redone. That was a helluva deal at $1.4m ha ha.
Here’s a FSBO that while lot is as large as the comp, and view is just as nice, it’s not as good because it’s not nearly as private and it needs to be renovated and repaired from a lot of deferred maintenance (leaky roof, leaky windows, etc). Plus, the giant ficus is a hazard and will have to go.
June 10, 2016 at 11:30 AM #798589mixxalot
ParticipantYes, San Diego is in a MAJOR bubble due to low inventory. Banks are intentionally holding back large amounts of off the book foreclosure real estate to drive up speculation and prices. Look at how much people make. A couple makes low income for the high prices.
June 10, 2016 at 11:57 AM #798591bewildering
Participant[quote=profhoff]Is it a bubble? Listing prices in NCCSD are insane. I mean really. 30-40% above comps from mere months ago.
I get that inventory is tight, but it’s my feeling that if the stupid money comes in and locks in comps at these new prices, we are definitely in a bubble.
Soros is putting it into gold, China is facing hard times, and it sure feels like a recession is coming.
Meanwhile, many houses are just sitting and sitting and if you look on Zillow, it looks like the “pre-foreclosure” inventory is starting to increase.
Just saying…[/quote]
You are being a little hyperbolic. Your own example is not “30-40% above comps from mere months ago”. The house has a 17.1% increase from over 1 year ago. 17.1% is a big increase but nowhere near 30-40%.
You are also looking at the 92014 zipcode. This is most exclusive area in North County San Diego. It is hardly reflective of the “Listing prices in NCCSD”.
Gold looks more like a bubble than housing
http://www.macrotrends.net/1333/historical-gold-prices-100-year-chart“Soros did come out earlier this year to warn of another 2008 crisis which didn’t happen and stocks kept surging higher. So maybe he’s trying to influence markets one way to make money off his trading positions.”
Where is your data for pre-foreclosures?
June 10, 2016 at 12:47 PM #798592Hatfield
ParticipantI happened upon an open house in OB last week. This was a supposed duplex on a skinny (i.e. single, 25′) lot in the heart of OB, Brighton or Long Branch or one of those streets. The front unit was a very small 2BR 1BA saltbox. It had absolutely nothing going for it. The rear “unit” was what appears to be in illegal garage conversion. It received power from the from unit via flex conduit with exposed Romex under the eaves. Had a toilet but no shower, and no kitchen. Presumably whoever lives in back does their cooking and showering in the front unit. Either that or they shower at the gym and eat out for all their meals. You obviously can’t rent that unit it out legally, so who knows what total rent this dump would pull in. Asking price was $740K.
I don’t understand this world anymore.
June 10, 2016 at 12:55 PM #798593FlyerInHi
GuestAfter my neighbor complained about my perfectly safe unpermitted work, I’m very leery of unpermitted stuff. Basically anyone (like a jealous neighbor) can file a complaint and you will be forced to permit under threat of legal action, enforcement and liens. It doesn’t matter how long the improvements have been there.
Maybe the land worth $740?
June 10, 2016 at 1:08 PM #798594Participant[quote=FlyerInHi]Maybe the land worth $740?[/quote]
That must be their assumption. But add on, what, 30K or so to demo the house, another 20K or so in permits, 200K to build anew, and I’m not sure there’d be a lot of wiggle room for profit given the risk. All for a place on a tiny lot with no prospect of a view. I guess there’s somebody out there with balls that big but it’s not me.
I think I missed the thread with your nosy neighbor. That really sucks. So what was the end result for you? We’re you able to get the work inspected and approved post hoc?
June 10, 2016 at 1:26 PM #798595GuestI hired a contractor familiar with permiting as-built. Cost me thousands. Lessons learned about bureaucracy and human psychology.
Trust no one. Don’t tell your neighbors about your remodel. Adding an outlet requires a permit. A patio cover requires a permit. Lots of bitter, jealous people out there.
June 10, 2016 at 3:00 PM #798597spdrun
ParticipantEither make your neighbors love you or fear you completely.
June 10, 2016 at 3:10 PM #798599ParticipantSoros did come out earlier this year to warn of another 2008 crisis which didn’t happen and stocks kept surging higher.
Stocks haven’t exceeded 2015 highs. Brexit (if and when) should be entertaining to watch.
I don’t think that banks are holding back foreclosures. Most banks are national in 2016, and they’re certainly not holding back foreclosures in the Northeast.
I think what’s happened is that speculators have bid prices above 2006 levels in many cases, so foreclosures can be sold without deficiency. For now at least.
June 10, 2016 at 5:41 PM #798602joec
Participantprofhoff, are you looking to purchase or do you own a place now or multiple places already?
What I’ve noticed the problem is for people shopping for a place renting, even though prices are elevated, compared to rents, a lot of places aren’t in crazy bubble territory according to Rich and some of his posts and analysis.
The problem is rents are insanely high.
Also, all these renters complain that everything is a bubble, but a lot of it is just wishful thinking I think.
Prices are insanely high, but many areas in SD have 1 month supply and there simply is NO building at the < 500k levels so with construction at historical low levels, rents being high, 30 days on market vs. a normal 6 months, a lot has to change before housing collapses IMO.
June 11, 2016 at 7:25 AM #798618XBoxBoy
ParticipantProfhoff asks how high can prices go? That is the question! Just like expensive areas of NCCSD prices in La Jolla have risen insanely fast in the last year. In La Jolla we are well above peak bubble pricing at this point, and if you believe Zillow many houses are close to double peak pricing.
You can claim this is due to low inventory, but in the $1,500,000 and up price range there is actually a good bit of inventory. (look at inventory in 92067 Rancho Santa Fe!)
You can also make the claim that these prices are justified due to high rents and low interest rates, but most buyers of two million dollar properties are not even thinking of renting and they are most likely paying cash.
You can also argue that we aren’t building enough low cost housing, which is probably true, but we are building a good bit of high end housing. So while that seems like a good argument for why low end prices are rising it is much less convincing for high end.
I’d hate to make predictions of a bubble, because a bubble implies a price drop in the near future and given the data Rich has been posting that seems unlikely. But in expensive areas, we’ve had steady price increases of around 10% a year for 5-6 years, while neither the economy nor inflation has kept pace anywhere close to that.
Which brings us back to the OP’s question, how high can prices go? I have no idea what the answer to that is, nor do I have any predictions of how this plays out, but it does seem to me price increases in high end areas can not continue at their current pace forever.
Just my 2 cents worth,
XboxboyJune 11, 2016 at 11:10 AM #798627ParticipantNice post. I’m just trying to make sense of the market. Prices don’t seem tied to fundamentals. Not to middle income wage increases, not to high income investment returns. I don’t get it.
I currently own a home in NCCSD SW C’bad, but would like to live closer to friends and colleagues which means SB, DM area. Good luck with that.
I think we’re priced out. 🙁
June 11, 2016 at 11:38 AM #798628
CoronitaParticipantIn valley my favorite roasting of townhomes, crest del Mar, its not even funny anymore. $700k asking for a 3/3 1533sqft condo. That’s well above peak prices…of course these are just asking prices. No one has actually bought….
My theory is there are a lot of people with an extra home or two just putting it on the market with a high asking price to see what sticks. If it sells, great
.. if it doesn’t no big deal since they aren’t in a hurry to sell. Especially if they bought a home or two during the crash. And with how low loan rates are, they probably can withstand holding out for a very very long time.The proper way to fix this problem is to relax lending standards so more people can afford the new norm of high prices 🙂
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