- This topic has 26 replies, 20 voices, and was last updated 17 years, 9 months ago by
kewp.
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March 20, 2007 at 8:12 AM #8645March 20, 2007 at 8:31 AM #48112
kicksavedave
Participant“Realtor Ron Walraven had a three-bedroom house in the suburb of Bloomfield Hills that had listed for $525,000 sell for just $130,000 at the auction. ”
Ouch… now THAT is a crash… something I’d like to see here in San Diego… not holding my breath though.
March 20, 2007 at 8:43 AM #48114kewp
ParticipantTo those that say it can’t happen here, consider that Detroit’s auto industry compares to our local real-estate complex. I can easily see properties in less desirable neightborhoods crashing hard.
March 20, 2007 at 9:03 AM #48115sdrealtor
ParticipantLOL, comparing Detroit’s auto industry to our local RE complex is assinine!
March 20, 2007 at 9:08 AM #48116no_such_reality
ParticipantMore importantly, comparing Bloomfield Hills to les desirable areas is lax.
Bloomfield is Rancho Santa Fe.
March 20, 2007 at 9:13 AM #48119CardiffBaseball
ParticipantSome of the Detroit area suburbs are quite nice from everything I hear.
March 20, 2007 at 9:13 AM #48120ibjames
ParticipantThat sucks, even at those kind of prices, Detroit is a pit
March 20, 2007 at 9:36 AM #48125Participant“LOL, comparing Detroit’s auto industry to our local RE complex is assinine!”
Please explain?
March 20, 2007 at 10:12 AM #48128davelj
ParticipantActually, I’d say that the real estate industry is just as important to San Diego as the auto industry is to Detroit. The reason that you won’t see homes in the nicest neighborhoods (like La Jolla or Rancho Santa Fe) selling for $130,000 (as in the above example from Detroit) is two-fold. First, we’re starting from a MUCH higher price plateau so there’s much farther to fall. Second, the market for San Diego real estate is much larger than Detroit’s. As San Diego’s real estate falls there will people from all over the country watching; San Diego will draw buyers from a much larger geographic pool. Detroit, today at least, does not have that level of widespread attraction. Hopefully at least you’ll be able to buy 1200 square feet in Chula Vista for $130,000 within a few years – that would not be out of line.
March 20, 2007 at 10:23 AM #48129Cow_tipping
ParticipantI would compare the detroit auto industry almost directly to the Silicon valley’s software industry. I often felt that San Jose and the surrounding area is the next detroit. Export jobs to China and India and sell RE for millions using funky loans. Sounds good.
Cool.
Cow_tipping.March 20, 2007 at 10:29 AM #48131surveyor
Participantdetroit vs. san diego
in terms of real estate, san diego is a completely different animal than san diego. detroit has a historical tendency to appreciate less than inflation. san diego has a historical tendency to appreciate more than inflation.
in terms of economic activity, san diego beats detroit hands down, with a much more diversified economy of defense, tech, biotech, tourism, and even some agriculture. detroit only has the auto industry and maybe some tourism.
also, in terms of tech, while we are losing our edge, we are still ahead of china and india. detroit lost its auto industry edge to japan a long time ago.
detroit vs. san diego? asinine indeed.
March 20, 2007 at 11:12 AM #48133Participant“Detroit only has the auto industry”. “detroit vs. san diego. asinine indeed.” Is that so?
As of March 2005 Detroit’s civilian labor force was at 2.2 million and its employed labor force was at just over 2 million.
For Michigan as a WHOLE, auto manufacturing accounted for 244,000 jobs out of a total employed labor force of 4.4 million. Now, let’s make the unrealistic assumption that 50% of that 244,000 was in the Detroit MSA and then double it (back) to capture the effect of all auto-RELATED employment. So, to use round figures, let’s assume that Detroit has 250,000 auto-related jobs out of an employed labor force of 2 million. Per the properties of mathematics, that suggests that auto-related employment accounts for around 12.5% of Detroit’s total employment… which is a big number.
Now let’s look at San Diego. What proportion of San Diego’s total employment is tied as directly to real estate as Detroit’s is to automobiles? I think Rich Toscano knows the answer to that question, but I think the number is somewhere around 14% or so (give or take). [Obviously, this includes real estate agents, mortgage brokers, title agents, developers and builders, construction workers, etc.] So, I’m still not seeing an “asinine” comparison when analyzing the relationship of auto employment to detroit vis-a-vis housing employment to San Diego. Help me to understand what I’m missing.
I’m NOT saying that Detroit is anywhere near as attractive place to live as San Diego. I’m merely trying to point out that housing-related employment appears to be every bit as important – if not more so – to San Diego as auto employment is to Detroit. So, let’s keep the discussion focused and not get off track. Please bring data to the discussion.
March 20, 2007 at 11:36 AM #48135bob2007
Participantdavelj,
It looks like you have numbers to back up your position, but could that only account for the direct employees of the auto companies? I grew up in detroit. Some people worked directly for an auto company, but the majority worked for suppliers to the automotive companies. Again, I have not looked up current stats, but more than half the families I knew were employed by automotive suppliers. 12% sounds about right for direct employees. Having lived in detroit and san diego, my opinion is that the automotive hit in detroit would be more severe than the aerospace hit san diego took in the early 90’s.
I also know bloomfield hills quite well. 130k is a very low price, even back in the 80’s. I’m not sure where that guy lived, but it was common for home prices to be well above 1M.
March 20, 2007 at 11:42 AM #48138ParticipantThanks davelj!
Indeed, I was only considering how dependent the local San Diego economy was on real estate and related industries. And I still feel the comparison is apropos, when any economy becomes over-reliant on one industry its risky business.
Something thats ‘worse’ about SD vs. Detroit is that the auto industry didn’t build equity for home owners. It wasn’t like every resident got a free classic muscle car when they bought a house there. Contrast with San Diego, where lots of folks became REI speculators when they bought into property they either couldn’t afford, or re-financed it into oblivion.
March 20, 2007 at 12:13 PM #48140ParticipantFYI: I was not commenting on the desirability issue which speaks for itself.
Explanation:
Say Detroit and people think one thing and one thing only regaring industry: AUTO INDUSTRY
Say San Diego and people think many things including: Defense, Biotech, Telecom, Tourism, Sporting Goods/SoCal Lifestyle products and eventually Real Estate.
Detroit lives and dies with the US Auto industry. SD does not live and die over any single industry.
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