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August 11, 2015 at 10:06 PM #788611August 12, 2015 at 12:00 AM #788612paramountParticipant
My understanding is that inventory is pretty low in Temecula. I had very little competition with my listing. Didn’t seem to matter much.
The median home value in Temecula is $395,900. Temecula home values have gone up 1.0% over the past year and Zillow predicts they will rise 3.6% within the next year. The median rent price in Temecula is $1,850, which is higher than the Riverside Metro median of $1,625.
# Homes for Sale 664 9.6% 17.7%
August 12, 2015 at 9:07 AM #788615poorgradstudentParticipantThe thing that confuses me is inventory looks like it was actually lower this Spring, but prices seem to have been rising more rapidly in June/July.
I guess we don’t really have the July data yet so it’s hard to make real comments on July yet.
August 13, 2015 at 12:16 PM #788633bearishgurlParticipant.. .This timely piece just in this morning:
The Death of the Starter Home
Money Talks News
Aug 11th 2015 5:00AM. . . In fact, you could argue — and I will — that starter homes are basically disappearing. They aren’t being built, and those that exist are either falling into functional disrepair (they are old), or more likely, being snapped up by investors to rent to young families.
First, a little housing lesson. Back in the postwar boom, America’s housing industry was on fire. Single-family housing starts jumped an incredible 400 percent during the decade. According to this great housing history, in 1950, the average price was $11,000. For perspective, median income, in real dollars, was about $3,300.
But here’s the number to watch: the average home was 963 square feet. A majority of homes had two bedrooms and one bathroom.
By 1972, prices had jumped to $30,000 while family income was nearly $10,000. Homes, which typically had three bedrooms and at least a bath and a half, now averaged 1,600 square feet. That kind of house can pretty comfortably shelter a family with 2.3 children. . .
[snip]
But that’s why there’s “used” homes, right? Young families are supposed to buy a needs-TLC place in their 20s, fix it up and trade up to their dream home later.
The problem is that cheaper, older starter homes are nearly as hard to find. Here’s one piece of evidence: The folks at RealtyTrac ran the numbers for me, and it turns out that year-to-date sales of sub-$200,000 homes is down this year compared to the last three years. That’s strange, given that sales above $200,000 are up. For example, two years ago, there were 395,000 sub-$200,000 homes sold from January to May. This year, there were only 343,000. Rising prices can’t account for more than a fraction of that drop.
Worse yet, families who would buy cheaper homes are being edged out by investors who buy the homes and rent them out. Nonoccupant buyers of single-family homes hit a record last quarter, according to RealtyTrac. . .
http://www.dailyfinance.com/2015/08/11/death-of-starter-homes/?ncid=engmodusport00000001
This is an excellent article about today’s buiders being unable to make a profit building “starter homes” and millennial first-time buyers (FTB’s) being “too picky” and unwilling to buy an older home is from a nationwide perspective but I still take umbrage with the message it is sending. I don’t believe builders have a “duty” to build “starter homes” or any type of home, for that matter. AFAIK, they can build whatever they can manage to secure permits for in a particular jurisdiction as well as whatever project also pencils out for them, attached or unattached.
I DO believe there are a sufficient number of “starter homes” in any given market (flipped and unflipped) for FTB’s to choose from (except in well-known expensive cities, such as SF and “resort areas”). The problem is that most agents who work with FTB’s carry no listings of their own, have little sales experience and tend to attempt to service buyers over a very wide area (ex: one whole or more large counties instead of a specialized micro-area) in attempt to eek out a living with little to no past referrals. Therefore, these agents don’t have relationships with agents in any particular micro-area and thus aren’t aware of any “pocket listings,” which are typically flipper-team-owned properties (where one “partner” on the team is an agent) or probate properties. THIS is where the “older” starter home inventory can be found and a FTB and/or their newbie agent across town would not know about these listings because they can’t see the sign in the yard of a property not listed on the MLS aggregators. (A CA agent can still write in a commission for themselves in an offer on a pocket listing.)
The article also infers that young dual-income couples today (residing in US real estate markets with a pop of over 500K) with a child and another on the way are now “stuck” in a “one-bedroom apt” essentially because no starter-home tracts are being built in the US today. I believe that presumption is patently false. When their lease is up, no tenant is “stuck” living anywhere. In SD County, these couples can easily go out and rent an older-but-partially-or-fully-remodeled 2-3 bdrm/1-2 bath “starter home” with a fenced backyard for their kid(s) for zero to $400 more a month (depending on area) than they are paying in rent for their “luxury” or “coastal” one-bdrm apt from one of the many buy-and-hold flipper teams around the county. This will accommodate their growing family while they save more downpayment and go through the laborious mental process of “getting real” about the local housing market they live in.
The REAL problem that I see here is that these whining millenial would-be buyers’ current apt often has granite countertops, underground parking, a pool, spa and a gym and this typical luxury apt inhabitant considers it a “downgrade” to rent a “starter SFR” just a bit inland or away from the high-rise hustle-bustle or both. According to the article, this phenomenon is prevalent all over the nation.
In my experience, FTB’s in CA coastal counties have never been “guaranteed” availability of new or newer construction to buy for their first home. Why should it be any different now? To get on the homeownership ladder, everyone has to start somewhere.
August 14, 2015 at 12:18 PM #788653thebazmanParticipantI would be curious to know how many more investors, landlords, and vacation home / pied a terre` owners there are compared to the 50’s when homeowners primarily bought SFR’s for their families. I’m no economist or finance major but I’m sure this must have some effect on supply and demand for starter homes.
Who wouldn’t want to have their home make money for themselves during retirement or instead of 9-5 job?
FYI I had my chance to buy one in 2010. I’m sure there are many others who were too picky like myself and didn’t realize what a good opportunity that would be to combat rising rent prices in the future.
August 17, 2015 at 3:01 AM #788707CA renterParticipant[quote=thebazman]I would be curious to know how many more investors, landlords, and vacation home / pied a terre` owners there are compared to the 50’s when homeowners primarily bought SFR’s for their families. I’m no economist or finance major but I’m sure this must have some effect on supply and demand for starter homes.
Who wouldn’t want to have their home make money for themselves during retirement or instead of 9-5 job?
FYI I had my chance to buy one in 2010. I’m sure there are many others who were too picky like myself and didn’t realize what a good opportunity that would be to combat rising rent prices in the future.[/quote]
We’ve been hearing about highly unusual numbers of “investors” in the RE market ever since the downturn began (technically, since the late 90s, which led to the beginning of the housing bubble). There are markets where the majority of sales are going to non-owner-occupiers.
This is not what housing should be used for, but it’s a manifestation of the highly manipulated credit and currency markets — which affect every other market.
But now that there is turmoil in currencies, commodities, and international bond and stock markets, we’ll get to see how leveraged some of these positions have been and how this might affect other types of markets around the world. It’s entirely possible that much of it is interconnected.
August 19, 2015 at 11:22 PM #788759JazzmanParticipantI had to check the date on this post to make sure it wasn’t an echo from the past. Are home prices silly right now? No. What’s silly, even absurd if the mood takes you, is that buyers remain prepared to pay silly prices. I’m continuously informed that I’m the silly one for thinking such nonsense. The logic is that if buyers continue to buy homes, they must be affordable. How is that silly (double entendre)?
August 20, 2015 at 9:54 PM #788778EscoguyParticipantThink we have some room to run if LA is a proxy for San Diego
http://www.latimes.com/opinion/op-ed/la-oe-0818-yu-la-housing-bubble-20150819-story.html?ref=yfp
August 20, 2015 at 11:35 PM #788779scaredyclassicParticipantthe house next door to me just sold for about 3x what i paid for mine. that is too much.
August 24, 2015 at 4:59 AM #788882CA renterParticipant[quote=CA renter]
But now that there is turmoil in currencies, commodities, and international bond and stock markets, we’ll get to see how leveraged some of these positions have been and how this might affect other types of markets around the world. It’s entirely possible that much of it is interconnected.[/quote]
Stuff like this…how interconnected is it? A short-term blip, or is this a sign that things are about to get really interesting?
——————
“World stocks and oil prices plunged Monday as a global sell off accelerated on worries about the health of China’s huge economy.
China stocks crashed and all Asian markets suffered major losses. Europe’s major indexes opened about 3% down before trimming those losses slightly.
Oil slumped 3.5% to a new six-year low of just over $39 a barrel.
China’s benchmark Shanghai Composite index declined 8.5%, wiping out all gains made this year. Many companies, including some large state-owned firms, fell by the maximum daily limit of 10%. The index is now down 38% since its June peak.
The smaller Shenzhen Composite lost 7.7%.
Related: China’s stock crash … in 2 minutes
In Japan, the Nikkei closed down 4.6%. Germany’s DAX shed 2.7%, as did the FTSE 100 in London. And Wall Street was poised for another sharp drop on Monday.”
http://money.cnn.com/2015/08/23/investing/world-stock-markets/
August 24, 2015 at 7:12 AM #788884livinincaliParticipant[quote=CA renter]
Stuff like this…how interconnected is it? A short-term blip, or is this a sign that things are about to get really interesting?
[/quote]Subprime was contained right. Biggest lesson I learn from the housing bubble is that there’ no such thing as decoupling. Not sure when it’s going to matter (well maybe today?), but it’s going to matter at some point.
August 24, 2015 at 10:05 AM #788887CA renterParticipant[quote=livinincali][quote=CA renter]
Stuff like this…how interconnected is it? A short-term blip, or is this a sign that things are about to get really interesting?
[/quote]Subprime was contained right. Biggest lesson I learn from the housing bubble is that there’ no such thing as decoupling. Not sure when it’s going to matter (well maybe today?), but it’s going to matter at some point.[/quote]
It’s crazy how they never learn, isn’t it?
August 24, 2015 at 11:48 AM #788891FlyerInHiGuestLearn what, CAr? The economy is now well above precious peak. Houses were built but we still have a shortage. It’s not like houses are sitting empty.
Overall, we are better off. Until we are worse off, there’s nothing to learn but to do things better.
It’s might be better to have booms and busts but overall higher growth over decades.
August 24, 2015 at 11:56 AM #788892bearishgurlParticipant[quote=FlyerInHi]Learn what, CAr? The economy is now well above precious peak. Houses were built but we still have a shortage. It’s not like houses are sitting empty.
Overall, we are better off. Until we are worse off, there’s nothing to learn but to do things better.[/quote]
Actually, FIH, houses ARE sitting empty. Sometimes up to 3 on each block! Many are still in disrepair and some of them have had household goods stored in them for up to 12 years. Some have landscapers visit periodically to keep the weeds down so the property won’t be cited. They’re not distressed and no one is in any hurry to sell. Why? The biggest reason is that it costs the owners almost nothing to keep them . . . in any case, much, much less than a storage unit would cost them. Hence, my (now tired) arguments against Props 58/193 on the public housing thread :=0
August 24, 2015 at 12:27 PM #788893fun4vnay2ParticipantMarket is swinging wildly.
As a big investor in market, I just saved myself from a big save though could not completely avoid it.It’d be interesting to see how things turn out as the stock valuations are still historically quite high despite this correct.
Don’t think bad stock market or economy or thousands of lay offs in sd qualcomm would have any adverse impact for local san diego economy or housing..
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