CV effect on SD RE

[gzz]

1. Rent is the last thing people pay late. Credit cards, utilities, student loans are all lower priority. People who are 1 paycheck away from disaster and don’t qualify for UI are not a major share of the rental market.

2. Relative value suffers. The 6% returns on rentals doesn’t look so great when catching the bottom of the stock market could be a 50% return.

3. If the crisis gets substantially worse, we’ll print our way out. Nominal housing prices will go up fast, our mortgages will remain fixed. This won’t lead to higher rates, since the big print will be aimed at buying long-date treasuries and GSE bonds.

[gzz]

Balancing these factors together, SD RE is one of the better places to have your money.

[FlyerInHi]

Real estate is not easy to get out of, so there’s not much choice but I stick with it.
It helps a lot to buy at the right time so you weather the recessions.

[The-Shoveler]

If these drastic measures continue beyond 2 months or so IMO we would be looking at a 75-80% drop in stock markets, public pension failures, maybe 25-50% drop in RE depending on location.

Anyway we will all be wondering if it was worth it IMO.

[sdduuuude]

Does anyone have any sense of whether or not real-estate deals have been entering escrow this week ?

I spoke with a couple of general contractors and they are continuing to work.

Construction is not shut down in SF.

[Coronita]

[quote=sdduuuude]Does anyone have any sense of whether or not real-estate deals have been entering escrow this week ?

I spoke with a couple of general contractors and they are continuing to work.

Construction is not shut down in SF.[/quote]

Someone I know closed a sales but that was already pending. Redfin sent out a letter saying no open houses, by appt only and only small groups.

What Hobbie posted was also interesting. I wonder how many UCSD, SDSU, USD students are going to walk away from their leases.

[Coronita]

I don’t know , but I’d say property that people are using for an Airbnb/vrbo is pretty much screwed in the short term.

Basically, this virus is most likely going to last until July/August. That is most of this summer. San Diego is about to announce a stay-at-home order like SF. People aren’t going to come here to vacation. This summer will be a write-off. And it could last longer because psychologically people are already thinking about a second wave of the virus.

Some of the homes were bought by companies an individuals or companies to try to run a hotel out of a home specifically built for residential usage and were counting on high hotel like room price to pay for an otherwise high mortgage for an expensive home that probably can’t pencil out normally as a residential rental. Can’t say I feel sorry for them. In some neighborhoods, they were a source of a lot of problems.

[Anonymous]

[quote=sdduuuude]Does anyone have any sense of whether or not real-estate deals have been entering escrow this week ?

I spoke with a couple of general contractors and they are continuing to work.

Construction is not shut down in SF.[/quote]

Yes, I was told so far so good though it is slowing down both on new escrows and new listings. In a market I watch 10 houses between one and 3 million went into escrow this week. The two major remodels going on down the street haven’t skipped a beat

[FlyerInHi]

[quote=Coronita]I don’t know , but I’d say property that people are using for an Airbnb/vrbo is pretty much screwed in the short term.[/quote]

Especially in areas like Pacific Beach where the properties would not pencil out unless they were used as a short term rentals.

[Anonymous]

[quote=FlyerInHi][quote=Coronita]I don’t know , but I’d say property that people are using for an Airbnb/vrbo is pretty much screwed in the short term.[/quote]

Especially in areas like Pacific Beach where the properties would not pencil out unless they were used as a short term rentals.[/quote]

those properties tend to be under very very long-term ownership they will be fine for the most part. Come summer the folks from Arizona will still come to escape the heat. The beach will always be desirable long-term. Barren deserts offering only dying industries are at much higher risk

[FlyerInHi]

If they are under long term ownership that means the owners are not that leveraged. They will be fine.
But recently lots of transactions in PB were preconditioned on the airbnb model. We shall see…

[gzz]

Duuuude,

92107 pendings and closings are at their normal pace.

Closings make sense, hard to back out at the last minute.

But the number of listings that go to “pending” sale you’d think would take a hit. Not yet.

[Anonymous]

[quote=FlyerInHi]If they are under long term ownership that means the owners are not that leveraged. They will be fine.
But recently lots of transactions in PB were preconditioned on the airbnb model. We shall see…[/quote]

And you know this how? Please bring actual data not more empty words

[FlyerInHi]

And what’s your data?
What’s your data on AZ visitors to SD? Don’t ask unless you put up first.

[Anonymous]

[quote=FlyerInHi]And what’s your data?
What’s your data on AZ visitors to SD? Don’t ask unless you put up first.[/quote]

Seriously? If you Google Arizona visitors to SD you get countless hits. I know a few dozen people including family that are coming no matter what. No one in their right mind would dispute that San Diego gets major tourism from AZ in Summer. San Diego had over 35m visitors in 2019. Industry statistics say about 15% of that comes from Arizona mostly over the summer. that’s most of over 5 million visitors.

You brought up something that has no basis in common sense, common knowledge or reality it’s purely hearsay. If not made up by you. Prove it dumbass

[Author]

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