Experts say…

[XBoxBoy]

San Diego Real Estate Market Nearing Bubble

Zillow Panel: San Diego Real Estate Market Nearing Bubble

I have no idea if this Zillow survey is on to something or just media hype, but notice this about 3/4’s of the way down the article:

[quote]In fact, more than a third of the experts who answered about San Diego saw no danger of a bubble over the next five years, and Zillow noted that there is “significant disagreement among experts” about potential bubble conditions.[/quote]

Another interesting thing is that the article claims that in 2017 we will pass previous peak pricing. But from what I see in La Jolla, we are already well past 2006/2007 prices. Must be all those Chinese buyers.

[kev374]

There is no real estate bubble, infact things are going to get even higher I think because money is flying out of China and the rest of the world into the US and real estate is the target of that money. That phenomenon is here to stay.

Compared to the rest of the world real estate in the US is still incredibly cheap, even in hot areas like LA and SFO.

I can easily see the median price of a home in San Diego approach $1 million in the next few years just due to influx of foreign money.

[bearishgurl]

[quote=kev374]There is no real estate bubble, infact things are going to get even higher I think because money is flying out of China and the rest of the world into the US and real estate is the target of that money. That phenomenon is here to stay.

Compared to the rest of the world real estate in the US is still incredibly cheap, even in hot areas like LA and SFO.

I can easily see the median price of a home in San Diego approach $1 million in the next few years just due to influx of foreign money.[/quote]

LOL, I haven’t seen any “Chinese buyers” interested in Chula Vista yet … at least not in the close-in older parts.

Maybe I ought to “hang on for the ride” until at least 2017 to see where this goes. Having seen all the fluctuations in value around here (which were not of our own making), I’m very, very cautiously optimistic.

I don’t see the typical Chinese buyer suddenly becoming interested in older areas in SD County (such as LJ or Chula Vista) unless they finally get wise to how much the carrying costs actually are in the newer areas (with added MR/HOA dues). That is, since they end up leasing out a great many of the properties they buy instead of occupying them.

This group is only interested in older properties in LA, SC, SM and SF Counties because they don’t have any choice … that’s all there is to choose from.

[Anonymous]

[quote=kev374]There is no real estate bubble, infact things are going to get even higher I think because money is flying out of China and the rest of the world into the US and real estate is the target of that money. That phenomenon is here to stay.
[/quote]

That is one heck of a bubble-ish statement.

[Anonymous]

You do realize that the last real estate bubble was also caused by foreign money, desperate for yield, being pumped into U.S. real estate. The only difference was that in that bubble the money was pumped into mortgage derivative products vs. purchasing property directly.

[The-Shoveler]

IMO there maybe micro bubbles but SoCal in general is not in a bubble yet.
Even if you have a bubble it is very unlikely to come close to the one we had in 2005-7.
There are still a few relative bargain areas in SoCal, just maybe not in coastal SD county.
Anyway IMO.

After taking a tour through AZ and NM, to be honest I would be a lot more nervous buying a 600k tract home there than a 1-Million home in say Carlsbad.

[poorgradstudent]

There are zip codes that are above bubble levels and zip codes still below. From a very broad perspective higher end zip codes seem to have bounced back more forcefully than areas like Santee/Chula Vista.

If prices go up another 5-10% in the next year I’ll start talking “bubble”, but for now I’m sticking with prices being “relatively high”, but not a true bubble. The peak of a normal cycle isn’t a bubble, it’s only when prices overshoot “normal” highs significantly it becomes a bubble with high risk of popping.

I feel like it’s a great time to sell, and buyers should exercise extreme caution.

[bearishgurl]

[quote=The-Shoveler]IMO there maybe micro bubbles but SoCal in general is not in a bubble yet.
Even if you have a bubble it is very unlikely to come close to the one we had in 2005-7.
There are still a few relative bargain areas in SoCal, just maybe not in coastal SD county.
Anyway IMO.

After taking a tour through AZ and NM, to be honest I would be a lot more nervous buying a 600k tract home there than a 1-Million home in say Carlsbad.[/quote]

shoveler, I haven’t toured any housing in those states but have driven through them and stayed overnight in them numerous times.

I agree with you re: every AZ/NM locale except for the PHX eastern suburbs. I think the market is shaky in the rest of the locales in those states. Even in Tucson and ABQ. My reasoning is due to lack of a solid job base and lower than average pay. A good portion of Santa Fe and Flagstaff’s residents are moneyed retirees but there isn’t much of a job base in either city except tourism. And overall, both of those states have lower household incomes, mainly due to their being inhospitable (environment-wise) and the proliferation of Native Americans living on their own land. I don’t think RE in either state is a good investment unless one is purchasing their final home for retirement purposes. And even then, it wouldn’t really be an “investment,” but a forever home for the end-user.

[bearishgurl]

[quote=poorgradstudent]There are zip codes that are above bubble levels and zip codes still below. From a very broad perspective higher end zip codes seem to have bounced back more forcefully than areas like Santee/Chula Vista.

If prices go up another 5-10% in the next year I’ll start talking “bubble”, but for now I’m sticking with prices being “relatively high”, but not a true bubble. The peak of a normal cycle isn’t a bubble, it’s only when prices overshoot “normal” highs significantly it becomes a bubble with high risk of popping.

I feel like it’s a great time to sell, and buyers should exercise extreme caution.[/quote]

poorgradstudent, I don’t feel that the older areas of Chula Vista have “bounced back” that well. At least not yet. And Santee RE is cheaper overall than Chula Vista’s and that city is much smaller. An apples to apples comparison cannot really be made with the two cities.

I agree that the rapid appreciation of the past two years needs to be examined on a case-by-case basis. It varies wildly among micro-markets.

[bewildering]

[quote]I feel like it’s a great time to sell, and buyers should exercise extreme caution.[/quote]

Where would you live if you sold? Rents are crazy. It is cheaper for me to pay my mortgage than rent (even a lesser property), and we only bought at the beginning of 2014.

[joec]

[quote=bewildering][quote]I feel like it’s a great time to sell, and buyers should exercise extreme caution.[/quote]

Where would you live if you sold? Rents are crazy. It is cheaper for me to pay my mortgage than rent (even a lesser property), and we only bought at the beginning of 2014.[/quote]

I mentioned this before as well. Do your own numbers…If it’s cheaper to buy where you rent (assuming 20% down and tax benefits), then I wouldn’t be too concerned with bubble talk.

I feel the main people who are calling it as this or that fall in 2 camps:

1) Renting and sad, can’t find what they want and waiting to buy, have cash or want to buy even more: IT’S A BUBBLE! PRICES ARE CRAZY, NO ONE CAN AFFORD THIS!

2) Own, living their lives, raising their kids in the school they want/like: No bubble here, rents are insane and more than my rent, until rent goes down, homes can’t/won’t go down.

Seriously, in many areas, rents are just crazy.

It also isn’t the same as in 2005-2007 when people and loan brokers lied a lot on mortgage apps and EVERYONE got approved, even dead people.

This was due to loan brokers wanting to package and sell the loans since they get paid for it each time.

I knew brokers who were purposely getting higher mortgage rates so they can keep refi-ing themselves and friends for more commish and getting cash back.

[The-Shoveler]

IMO the real issue is not enough new housing being built to meet the household formation current occurring.

Os I guess is kind of an anti-building bubble.

[PCinSD]

http://www.sandiegouniontribune.com/news/2015/dec/10/housing-bubble-zillow-study/

Next time go with the porno ‘stache’, or the Fu Man Chu.

[Rich Toscano]

[quote=PCinSD]http://www.sandiegouniontribune.com/news/2015/dec/10/housing-bubble-zillow-study/

Next time go with the porno ‘stache’, or the Fu Man Chu.[/quote]

Ha! 😉

That picture is literally a decade old. I have no facial hair any more, porn or otherwise. I also look a good bit more… shall we say… grizzled? (Though leaner now… I was a bit of a porkchop back in the day).

[Author]

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