I wanted to send him this thread, and introduce him to the piggington site. I don’t know if he’s read this blog before. I cannot convince anyone to do anything. Some people here wrote they followed my advice, but what they meant is they researched a bunch of stuff, and then ended up doing the same thing I had recommended. People do what they want to do. I hope I can influence my friend to think of an outcome that is worse than what he has been told by his realtor. He needs to know that prices can go down by 50%, and make his decision based on that possibility. How long can he carry this condo at negative cash flow? If he lost 35%, would this endanger his financial situation? Is it better to cut his losses now? Can he ride out the downturn? We can pretty much agree it will be 12 years to the next market top. That’s a long time to wait. Does he want to wait that long?
Bugs,what factors could make the downtown condo market hot in 2 years? Lower interest rates? A burgeoning downtown work force? In 2 years, we will be coming out of a recession, so perhaps a new economic boom? OTOH, housing cycles in the past in SD went in 12 year cycles, so why would this one be so much shorter? If you say he will be making money on this unit in 2 years, you are saying the condo prices will go back up without ever bottoming out? The bubble collapse is forestalled? The Fed would need to invent a quick liquidity bubble to make that happen.
I am not knowledgeable about the condo market. It seems to me that the prices will keep going down as long as there is new inventory coming online.
Bob Casagrand told me that the number of new listings are the same as last year,but it’s the lower sales that are causing the inventory to rise.
If we had the same number of sales as last year, the inventory would be about half. I think that’s what he told me.
He attributes the lower sales to people leaving San Diego. Whereas we had 50K people per year coming here, driving up demand for new homes, now we have about that same number leaving, depressing demand. Bob’s a great guy.
His sales are up, and business is so good, he’s turning away work and sending clients to other realtors. His website is attracting so many people. I think another realtor on this forum said you don’t need a website, but it sure seems to help.
All those new units coming online are further increasing inventory. With demand lowering, prices will keep falling.
Bugs, have you noticed any change in the number of investors buying property? If investors were really buying 40% of homes in SD, then our sales should be down 40%, assuming the investors stopped buying. But they are down only 25%, and most of that is due to high interest rates. What are the investors doing with all those homes they bought?
