[quote=poorgradstudent][quote=The-Shoveler]I am not saying that home prices are not silly right now but I will say they are not and have not been building near enough homes.
I was hearing that resale inventory (below 800K in price) is down about 28% from last year and it was even low then.[/quote]
Yeah, it seems like all the building that is happening is in the 2000+ sq ft range. I’ll admit I don’t know areas like Santee, Chula Vista and San Marcos that well, which may have building activity that is more in line with starter homes.
It sort of feels like builders just want young families to buy condos for their first home :P[/quote]
I don’t know about SM or Santee (both “inland” cities) but, as far as I know, Chula Vista, a “coastal” (bayfront) city, doesn’t have any building going on, unless it is a very small spec/infill project. Builders don’t get to decide what 1st time buyers and/or “young families” get to buy in SD County. There are plenty of SFRs currently available in at least a dozen zip codes in metro/south/east county (and likely in a dozen-plus zip codes in north county) which meet the criteria of a “starter home” (for 1st timers/young families) and priced under $400K.
And no, these SFR’s generally aren’t anywhere near “new” or “newer.” I honestly don’t understand why millenials tend to shy away from older homes in SD County. They certainly don’t in LA County (where there has been next to zero SFR tracts built in the last 25 years) or the SF Bay Area (where there has been next to zero new SFR tracts built in the last 15-20 years, depending on micro area). It doesn’t make sense.
Yes, a “newer” (<15 yrs old) condo can be had for under $400K in SD County today (even well under $400K) but with that purchase, the buyer typically has 12-25 more miles driving distance to work centers (one way, amounting to $200+ month higher gas/maintenance expense for daily commuters) and HOA dues and Mello Roos tacked onto its property tax bill. PITI + HOA dues + MR amounts to several hundred dollars more per month than a comparably-sized (older) SFR would cost them in PITI alone. For that extra $500 - $750 per month, the new homebuyer of a (dated) older home can make incremental improvements to it, selecting top-notch materials to their own taste, ESPECIALLY if they can DIY some of those improvements! And in the months they don't want to spend money on improvements, they have the flexibility not to.
Not so with monthly HOA/MR (whether the buyer actually uses the community facilities or not).
What's the point of buying a condo with no yard and a single garage or carport when a FTB can get a nice backyard AND double-car garage for the same price or less than a comparable-sized condo (but NOT "newer") and not grow out of their home immediately when kids are born and are not allowed to play anywhere close to their condo's front door (so they can be supervised by a parent or other caregiver working in the home)?
SD millenial-homebuyers' sense of entitlement for newer construction doesn't make sense to me. Their housing choices in SD County are cutting off their noses to spite their faces.
