Days on market vs. price expectation

[fun4vnay2]

[quote=gzz]I

San Diego has a large number of well-paying jobs, is a favored place for the wealthy to vacation, have second homes, and retire, and has basically run out of nice locations to develop.

I also think it is only a matter of time before mainland Chinese buyers start branching out from their favored UTC-centered buying habits into other areas of San Diego.[/quote]

All the above are facts not fiction.
A lot of people told me the same thing in 2007 when I was exploring real estate in san diego. Per them becaus eof above stated facts, real estate in SD would never go down.

I was not convinced though and finally bought in 2011 🙂

[Coronita]

[quote=rockingtime][quote=gzz]I

San Diego has a large number of well-paying jobs, is a favored place for the wealthy to vacation, have second homes, and retire, and has basically run out of nice locations to develop.

I also think it is only a matter of time before mainland Chinese buyers start branching out from their favored UTC-centered buying habits into other areas of San Diego.[/quote]

All the above are facts not fiction.
A lot of people told me the same thing in 2007 when I was exploring real estate in san diego. Per them becaus eof above stated facts, real estate in SD would never go down.

I was not convinced though and finally bought in 2011 :-)[/quote]

Well then. Since you are looking to upgrade…why haven’t you sold your existing home and just rent if you are so sure prices are going to go down significantly enough? If you are looking to upgrade, and you think prices have peaked, now would be a great time to sell, right? After all, even if prices do fall and you can get a better house later, holding onto your existing primary won’t help because that will go down too.

[fun4vnay2]

I am not looking to upgrade but looking for some investment property. Hence looking at real estate in SD.
I realized I am bit late to the party and current valuations wont give me + cash flow in SD.

[spdrun]

There are properties in the area that will come close, if not cash flow.

e.g., a 2/1.5 condo went contingent last month at $200k. HOA about $250/mo. Landlord insurance, about $15/mo. Taxes about $200/mo.

Market rent is $1600/mo and it’s in an easy area to rent. That’s close to 7% pro forma. Catch was that there was an existing tenant there at $1300/mo, but if one had some patience, they could do well.

[Coronita]

But if you feel home prices are going to come down significantly, why not sell and rent?

[fun4vnay2]

Good question,
I personally feel my house price have peaked out. It would be insane if it goes up any more but you can never underestimate the power of absurdity.

Not selling as I want to rent it out with good + cash flow and move into another house…

Still evaluating things..
I have chunk of cash and I’d like to leverage it somewhere else other than stock..

Right now, the market is very hot for sellers in the areas I’m looking at.
I have been proven wrong many times n thus trying to hedge my bet…

[fun4vnay2]

[quote=spdrun]There are properties in the area that will come close, if not cash flow.

e.g., a 2/1.5 condo went contingent last month at $200k. HOA about $250/mo. Landlord insurance, about $15/mo. Taxes about $200/mo.

Market rent is $1600/mo and it’s in an easy area to rent. That’s close to 7% pro forma. Catch was that there was an existing tenant there at $1300/mo, but if one had some patience, they could do well.[/quote]
Thanks spdrun, If you have any more like this or a good contact, please PM me.

[The-Shoveler]

At the risk of jumping into the fray, I think it very unlikely lower end home prices will crash significantly (say more than 15-20%).

I also agree with flu, the pressure will be on making loans more available to the lower income/mid-income levels.

There is already a lot of talk on how they can do this.

High end I am not so sure but that seems unlikely to me to get hit much either.

Also if your looking to buy rental properties, YOUR part of the reason it is unlikely to fall much in price.

[Coronita]

[quote=rockingtime]Good question,
I personally feel my house price have peaked out. It would be insane if it goes up any more but you can never underestimate the power of absurdity.

Not selling as I want to rent it out with good + cash flow and move into another house…

Still evaluating things..
I have chunk of cash and I’d like to leverage it somewhere else other than stock..

Right now, the market is very hot for sellers in the areas I’m looking at.
I have been proven wrong many times n thus trying to hedge my bet…[/quote]

Well then its good your pragmatic and honest about this. That’s the point. As logical as we want to think home prices will fall (and fall hard as many of you think will happen) no one here is willing to bet their house on it(both figuratively and literally) because even has their doubts. And no one here on this blog appears to be confident enough in their doomsdays opinion to wager their primary home and rent.

I’ll believe it when I see people here starting to make that wager. Despite all the doomsayers of a manor correction I have yet to see an example of people putting their money where their opinion is.

[The-Shoveler]

There is a lot more worry on why we are NOT building enough homes, than there is on prices being too high.

That is where the pressure will be applied IMO (generating more home building) and how to get it going.

[fun4vnay2]

Major correct would need some major event to unfold it..
don’t see it coming, can think of few though
1) water crisis pushing people out ?
2) qcom lays off few K people in san diego ?
3) fed raises the interest rates in next couple of years ?

[an]

[quote=rockingtime]Major correct would need some major event to unfold it..
don’t see it coming, can think of few though
1) water crisis pushing people out ?
2) qcom lays off few K people in san diego ?
3) fed raises the interest rates in next couple of years ?[/quote]
1) Water crisis is here and I don’t see it pushing people out. It would just cause more brown lawn.
2) QCOM have been laying off and spinning off the last year or so. The RE prices have been going the other way.
3) We’ve talked about this before. There have never been strong data to prove rising rates cause price to fall.

[fun4vnay2]

I agree with point #1.
Point#2, qcom has not yet done big lay off in sd so far. They have been doing small lay offs for years

Point#3: This is a wild card. We can be in japan like situation where rates are permanently low

[Coronita]

[quote=The-Shoveler]There is a lot more worry on why we are NOT building enough homes, than there is on prices being too high.

That is where the pressure will be applied IMO (generating more home building) and how to get it going.[/quote]

Just this weekend there was this home we were entertaining in my area. 1 day after open house, 4 offers with 24hrs and no backups accepted.

Some have suggested its going to be more like Irvine and Arcadia RE prices moving forward in Carmel V. I am beginning to think that is the case. Between $1-1.5m homes that sold here recently, 1 out of 3 were purchased by Asian households.

[an]

[quote=flu][quote=The-Shoveler]There is a lot more worry on why we are NOT building enough homes, than there is on prices being too high.

That is where the pressure will be applied IMO (generating more home building) and how to get it going.[/quote]

Just this weekend there was this home we were entertaining in my area. 1 day after open house, 4 offers with 24hrs and no backups accepted.[/quote]
A couple of months ago, I was considering this house in my hood. They didn’t even host an open house yet, we saw it w/in a few days of it hitting the market and it already have an offer with no appraisal contingency. End up selling for ~10% above ask price.

[Author]

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