Appreciation may slow this year, but I am probably in the minority in thinking there isn’t really a bubble in the whole 4s ranch area since for one thing, people buying now have probably a ton more equity in the house with much larger down payments and these people aren’t house flippers or investors.
As you need a place to live in no matter what, people will buy if they have kids and can afford the monthly payments. I think people shop for a house more based on payments vs. the overall cost of the house since if you don’t buy, you have to rent anyways.
For an $800,000 home, with 20% down (this is easy for most “asian” families I think with family money/help or heavy savings…30 year 4.5% loan, I get a monthly payment of $4,242.79. You assume a decently high tax deduction of about 35% for state and federal and after taxes of $2757.81. Wow, it’s 1k less to buy than rent…You can buy and rent it out yourself as well and depreciate as a business over 27.5 years (is that still around?) and write off against your own personal income as well…
With rents in the area this high, and MUCH MUCH stronger buyers who are generally much more financially invested (higher down payments needed recently), they can simply wait out any price drop or simply rent it out and wait as well.
Interest rates do determine affordability, but they are still very low and if you need a home for your family with kids and have a decent job/income, the numbers sorta pencil out ok…
Someone correct me if I’m wrong, but rents are pretty high in that area and schools are “decent” with “affordable” housing compared to say, Del Mar, La Jolla, anywhere in the Bay Area, Los Angeles, etc…
Really, compared to the bay area, real estate in San Diego IMO is down right cheap…(one reason I left I guess).
