[quote=pemeliza]CAR your logic is starting to get a bit convoluted here.
People buying in the areas with the best locations, weather, schools, etc. that are paying 20-30% down likely have enough cash to buy in 99% of the country yet they choose not to because they want the best of everything and have the incomes to afford it at these price points and interest rate levels. Prices in Oceanside, Escondido, etc. don’t matter to these buyers because they likely would not live there if someone gave them a house. If people are buying in topflight areas and putting down a large chunk of their own money then the value is there for them. As far as the government “stalling” deflation in the mid-high to high ends I respectively disagree. You yourself have provided some evidence on this board to the contrary.
I also think you are putting too much emphasis on this idea that every area in San Diego country should have the same relative value as it did 20 years ago. As time marches on some areas shine and others wither.[/quote]
Okay, let’s say there are ten buyers, each with $700K CASH who want to buy a nice house in a nice area.
If these buyers were presented with a nice house/area for $625K in Escondido, and a nice (fairly equivalent) house/area for $700K in Encinitas, they would all probably choose the $700K house in Encinitas.
However, if that same house in Escondido was being offered for $450K, while the Encinitas house was still being offered for $700K, I’d bet good money that at least three or four of those buyers would consider the Escondido house, and at least 2-3 would indeed buy there.
That’s the case with us. We have always actively looked in Escondido as we prefer the lots, houses, general feel, etc. to the coastal area. We prefer the coast only because of the commute, as we don’t want to have to deal with Del Dios every day. That being said, if a great house came on the market in Escondido at a significant enough discount relative to coastal prices, we’d jump on it.
It’s the price compression that makes us focus more out here on the coast. If that price compression dissipates, we’ll move. I know many other people who feel exactly the same. At some point the cost/benefit analysis shows that it makes much better sense to buy in a “less desirable” area. Right now, that’s not the case for us.
Hope that clarifies things a bit.
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BTW, if you think that all the manipulation is not affecting prices, then why do you think they’re so insistent upon forcing rates to artificial lows, buying up mortgages, paying people to buy houses, backstopping the entire mortgage market (as ~90% of our mortgage market is supported by the govt), etc.?
