[quote=flyer]I agree, TS. As a native, I’ve seen that all of my life also, but it seems that it’s becoming more and more challenging as time goes on.[/quote]
I don’t think it’s more “challenging” for FTB’s to buy a home in SD County today, flyer. Except for the current “low inventory” and the high amount of “contingent” listings and all-cash sales (ALL “temporary” situations, IMO), there are currently traditional-sale properties out there in nearly every zip code to buy.
If more sophisticated and usually older “all cash” investors habitually pounce on these “older” new listings, a FTB who won’t even make an appt to see them after spotting them on a map on the internet has to ask themselves why.
Shoveler is correct. The houses we bought were 18-45 years old (at the time … now much OLDer) and many were VA/FHA repos which were sold in a VA/FHA sealed-bid system by a local property manager. ALL were absolutely “as is” and MANY were pretty rough, requiring the buying party to walk thru multiple rooms of trash, clothing and discarded household goods.
Even “traditional sales” often needed multiple major repairs … but were “livable.”
It was not uncommon for a new buyer to get keys to a fmr gov’t repo and pull in a 20′ or longer dumpster the next day or bring a flatbed in and load up several rusty old appls off the property, as well as junk and trash piled high from room to room. Kitchens often were extremely filthy and their range vents clogged with grease, even if the appliances were fairly new. Bathrooms were filthy and clogged as well.
Why did boomers want these properties? One reason. Sweat equity to the tune of $7-$10K per year of ownership (depending on location), just by hauling out, cleaning up, shoring up or planting new landscaping, painting and installing new window and floor coverings and whatever other minor repairs were needed.
That’s it. It was work one could do after work and on the weekends, while living in 1-2 rooms or on an air mattress.
The current generation of family-raising buyers (Gen Y and younger Gen X) is better-educated and so makes more money during work hours than boomers did. Due to much lower interest rates than boomers had to contend with, many of these buyers seem to be able to afford something more than a “starter home.” In addition (and MOST IMPORTANTLY), they have thousands of properties from within CFD’s to choose from, which are newer and often have wireless internet in every room, double-paned windows and lie within a HOA. Virtually none of these younger buyers seem to care about sweat equity. They just want what they buy to be ready to move right into at closing and to “flow” and fit their furniture in.
Most want their first property to be “perfect” and so are attracted to properties which have less wear and tear (newer) which are not in the most convenient locations. Since location is the best indicator of value in CA coastal counties and always has been, these young buyers will very likely not be able to garner any “sweat equity” from buying properties in new(er) subdivisions in which they only put in a bit of “cosmetic work” or no work at all (because it didn’t need any).
Entire blocks of these *newer* properties are filled with “worker bees,” many with few assets and nearly all whose total household income is tied to their job stability. In these newer subdivisions, is rare to find a paid-off home or a young family who purchased with all cash. When RE values go down (as it does/did in a normal RE cycle), nearly EVERY owner for blocks around who recently purchased at about the same time finds themselves “underwater,” thus this is the beginning of “distress” for the entire subdivision, which severely erodes all owners’ values.
Boomers didn’t have to deal with any of this. There were always plenty of paid-off homes and homes with extremely-low mortgage balances interspersed with those homes of young families. Boomers didn’t “flock” to a handful of zip codes, shunning the rest. They bought close to work and other family members, wherever that was.
The vast majority of FTB’s today don’t seem to care whether they will ever be able to sell for a profit. This doesn’t seem to be important to them, even if they want to stay in their properties ~15 years, because it never occurs to them that they could be forced to sell at any time, due to life changes, job loss and/or high medical bills not covered by insurance, for example.
As a potential buyer, knowing what a property would resell for on a bright sunny day after being cleaned up and rehabbed a little was always at the top of my mind while “touring” a listing with my clipboard (before even making an offer). Yes, even with an infant or a baby/toddler in a stroller in tow. And I know I wasn’t and am not alone in my thinking.
In a nutshell, there are vast differences in the values of FTB’s and 2nd TB’s between boomers and Gen Y.
