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FlyerInHi.
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May 4, 2015 at 1:33 PM #785753May 4, 2015 at 1:45 PM #785755
bearishgurl
Participant[quote=FlyerInHi][quote=Jazzman]
My view is that RE has been highjacked in many places and these places share things in common. They tend to be English or Asian speaking, major metropolitan conurbations, with an industry that drives it and a government that accommodates it. In other words, a culture has been built up around it. [/quote]You’re on to something… but when will it all unravel?
If you’re mobile and retired, then you have more choices… But what if you must live in London or Hong Kong. Your only choice is to live in a closet.[/quote]
The San Gabriel Valley isn’t going to “unravel” any time soon. Most of it is “self contained,” meaning there is an abundance of “mom and pop” and other closely-owned larger businesses there. In addition, there are lots well-paying jobs for its residents within a 20 – 45 min commute (west to LA and south to the OC). And they aren’t all concentrated into just ONE sector (ex: tech).
Of course, the SGV is still fairly reasonable to purchase a house in and never had the intense run-up in “values” (as did Carmel Valley).
The SGV is a great example of good bang for the buck in home values while still living in an inner suburban ring (having reasonable commute times) in a CA coastal county. And a new beautiful Metrolink station was recently finished almost 50 miles inland within the “City of Industry.”
May 4, 2015 at 2:13 PM #785756Participant[quote=FlyerInHi]BG, new construction do not contribute to escalating prices. New houses hold down appreciation of old houses.[/quote]
I don’t think ALL newer-construction tracts are currently escalating in value, FIH. Just a few are, which are either in a particular location or have a particular footprint (~2700 – 3500 sf econobox or Mcmansion) usually situated on a small lot with HOA/MR).
Yes, the presence of newer construction DOES (indirectly) hold down values of adjacent older construction, purely due to increased choices for the buyer, which can be confusing because the older and newer listings are not “apples to apples” comparisons. (I covered this issue.) Just because today’s buyers have more choice doesn’t mean they are actually choosing correctly for their long-term needs.
I think most of them are just “complacent,” as Jazzman stated. They don’t want a house that is not completely “turnkey.” If they do decide to venture into an older area and find a listing that is “turnkey,” if all the surrounding homes don’t appear “turnkey-looking,” they don’t want to make an offer.
In the newer area, everything “appears” more turnkey from the street but many of the backyards are still dirt and in some tracts, plastic shades or sheets still hang in some or all of the windows in some houses a decade after being built. The other invisible issue in some of these tracts is there is a large percentage of homeowners delinquent on HOA dues and their taxes (primarily due to the large MR assessments added to their tax bills) which were never fully budgeted for by the homeowner.
The high delinquency rate for the HOAs of some newer home tracts doesn’t bode well for new buyers.
May 4, 2015 at 2:15 PM #785757FlyerInHi
GuestBG, the San Gabriel Valley is a big place. Carmel Valley, San Diego is just a neighborhood of ~45,000.
If you just go by school API, I believe that Carmel Valley is cheaper.
Show me some listings in SGV to backup your assertions.
May 4, 2015 at 2:18 PM #785758GuestBG, it’s not just turnkey, housing wise.
People want good schools for their kids. They don’t like the older neighborhoods where there’s more riff raffs.
If fact, people may prefer the older neighborhoods, but after factoring in schools and remodel, they opt to buy a new house. Not hard to understand.
May 4, 2015 at 2:22 PM #785759an
ParticipantNot everyone have the cash to buy an older property and upgrade it. You can’t roll the cost of upgrade into a loan like a new house. You can refi, but not every upgrade you do yield higher appraisal price. That is one reason why people prefer new. I’ve seen investors who buy older house, 100% renovate it to move in condition and sell it for a lot more than comparable older house.
May 4, 2015 at 2:23 PM #785760Participant[quote=FlyerInHi]BG, the San Gabriel Valley is a big place. Carmel Valley, San Diego is just a neighborhood of ~45,000.
If you just go by school API, I believe that Carmel Valley is cheaper.
Show me some listings in SGV to backup your assertions.[/quote]
Not sure what you’re asking for here, FIH.
Yes, the SGV is a HUGE place but my point was that Asians will buy a home wherever they feel comfortable doing so. It doesn’t necessarily have to be a newer econobox or McMansion, as is most of the inventory in CV.
What is the percentage of buyers shopping in CV which are only engaging in bidding wars for schools?
Are “schools” the only (or biggest) reason why a homebuyer in CV will repeatedly engage in bidding wars just to (hopefully) have the “winning” bid on any house at all there?
May 4, 2015 at 2:43 PM #785761Guest[quote=AN]Not everyone have the cash to buy an older property and upgrade it. You can’t roll the cost of upgrade into a loan like a new house. You can refi, but not every upgrade you do yield higher appraisal price. That is one reason why people prefer new. I’ve seen investors who buy older house, 100% renovate it to move in condition and sell it for a lot more than comparable older house.[/quote]
That’s pretty much it.
I only buy old condos in good central locations and I remodel everything. I get good rents because my condos are like new.
I definitely understand why people want to buy new. It’s just easier. Not everyone has the inclination, the cash, the knowledge, or time to remodel.
One comparison we could make is brand new Civita in Mission Valley, vs. old/dirty/small place in North Park without AC or the modern appliances/conveniences.
May 4, 2015 at 2:46 PM #785764
CoronitaParticipantThis is awesome. I’m glad the pigg resident real estate experts are now finally talking about homes in San Gabriel Valley, with equal conviction as homes in North County without (1) living there (2) doing business there and (3) having purchased/rented there. I’ll now watch and learn what experts on SGV say now. and learn from it……by thinking completely the opposite. That appears to be more an accurate pulse of what really happens, based on previous track records of expert advice from LETDLITA’s!!!… Carry on !
May 4, 2015 at 2:49 PM #785765Participant[quote=flu]This is awesome. I’m glad the pigg resident real estate experts are now finally talking about homes in San Gabriel Valley, with equal conviction as homes in North County without (1) living there (2) doing business there and (3) having purchased/rented there. I’ll now watch and learn what experts on SGV say now. and learn from it……by thinking completely the opposite. That appears to be more an accurate pulse of what really happens, based on previous track records of expert advice from LETDLITA’s!!!… Carry on ![/quote]
No need to worry, flu. Those listings in the SGV (although a much better deal than CV) aren’t your “direct competition.”
You can breathe easier, now.
May 4, 2015 at 3:14 PM #785766Guest[quote=bearishgurl]
I prefer beige, pink or turquoise Dal-tile in the bathroom to match the (well-preserved) American Standard fixtures of the era. Black seahorse tiles interspersed would be a bonus.My mom had an electric blue American Standard bathroom in her mid-century rancher and I loved it! Lot size was nearly 13K sf!
I don’t care much about the appls, either, spdrun. Coppertone is my favorite color of (older) appliance. Downdraft gas range with covers a bonus. However, I would not use a frig more than 15 years old as they use up too much energy.
[/quote]
BG, you do know that mid-century design was ahead of its time, right? The manufacturing/construction available at the time was not able to produce the clean lines the designs demanded.
Today’s productions that follow mid-century modern designs are much better.May 4, 2015 at 3:15 PM #785767ParticipantFolks, I want to know exactly how much $$ your kid(s) right to attend particular public schools is worth to you (per kid). Let’s assume one in first grade, one in K and and any other kids are not in school yet so let’s assume 2 kids, for discussion purposes.
Let’s break it down here:
What is a “good school” . . . say 9 to 10 on Great Schools) “worth” to a parent today (over and above a similar-sized home situated in an area costing much less with a 7 – 8 school score on Great Schools)?
Another option is: where should a parent of two school-age children today put their homebuying funds based upon what they can afford? Examples:
Elem school 10
Middle school 9
High school 8House cost will be $850K, rent will be $3500 mo;
Elem school 9
Middle school 8
High school 8Same house will cost $650K; rent will be $3000 mo, OR:
Elem school 8
Middle school 7
High school 8Same house will cost $550K; rent will be $2500 mo.
******
Food for thought: What would the right to attend a particular HS with a “9” score be worth to a parent who has, say, only a 13 and 14 yo the time of home purchase?
Use money, please, i.e. “I would spend $150K more ($75K per kid for two kids) for a home located in an “8” high school attendance area than I would pay for a similar home situated in “7” HS attendance area” (all other factors being equal). Thanks.
May 4, 2015 at 3:18 PM #785768GuestOf course, the most expensive house, if you can afford it, or even sacrifice by stretching for your kids.
The reason is simply in the thinking that the extra value in the house will be always be there.May 4, 2015 at 3:32 PM #785770Jazzman
Participant[quote=FlyerInHi][quote=Jazzman]
My view is that RE has been highjacked in many places and these places share things in common. They tend to be English or Asian speaking, major metropolitan conurbations, with an industry that drives it and a government that accommodates it. In other words, a culture has been built up around it. [/quote]You’re on to something… but when will it all unravel?
If you’re mobile and retired, then you have more choices… But what if you must live in London or Hong Kong? Your only choice is to live in a closet.[/quote]
Yes, that is right and I make that point. My view is rent is a better all round choice. If listings are still only 50% of what they were in peak times, then choice, or lack thereof, alone would be an incentive to wait. On the other hand, there must be a good choice of rentals now.
When will it unravel? Everyone is terrified of trying to answer that question. Nobody wants to look stupid. There is huge vested interest in not letting it unravel, and many talk of the new normal; low rates, high price earnings etc and I’ll admit you don’t hear many convincing arguments to oppose this view. But that doesn’t mean there aren’t any. It might just mean we don’t know what the causes will be. Pure psychology, insurers suffering prolonged low rates, Grexit, Ukraine/Nato escalation, bond bubble, China housing/stock market crash, inflation/sharp rate rise, or something else we haven’t been keeping an eye on. However, to capitulate to forces when you know them to be wrong will not serve you well in life. If markets continue to climb, or even settle at current levels and you remain ‘priced-out’, you cannot blame yourself. You used the information available to you and made a rational choice. You are a normal, sensible human being. Strike that, You are a smart individual.
One final point I would make is that we have become accustomed to comparing current valuations with the bubble. After a tsunami a 20′ swell might seem like a ripple. The bubble was an extraordinary event. If it hadn’t happened, and we still found ourselves where we are today, would we be yelling “crazy bubble'” prices? I think we might very well be.
May 4, 2015 at 3:53 PM #785771Guestjazzman, compared to the rest of the world, US housing is still relatively cheap.
If there’s a crash, wouldn’t it happen in China first? Or maybe in the UK? Or New Zealand or Canada?
We should have some warning before the crash hits our shores?
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