Goodbye to San Diego

[sdrealtor]

i found some nice trees. The reason you don’t see the really big ones is the homes are too new. The first guy is still there who planted them. They take 10 to 20 years to get big.

[sdrealtor]

[EconProf]

sdr:  Wow.  Talk about cherry-picking the data! And something called “short-termism”.  What do those dozen or so cities with the biggest price declines in recent months have in common?  They have all doubled or tripled in value in recent years.

Imagine you long ago picked an occupation in great demand where the average salary has doubled in the most recent 5-6 years.  Then a “black swan” event comes along, hurting your industry more than others.  Your income is reduced by 10%.  Did you make a mistake?  Did those who moved to Idaho 5 years ago make a mistake?

The black swan event was, of course, the doubling or tripling of mortgage rates, which apparently most hurt the fastest growing areas of the country.  But the exodus from California continues, and shows every sign of accelerating, even from beautiful San Diego.

[sdrealtor]

I made no comment. None was necessary. The data speaks for itself.

[sdrealtor]

More data on our homesteads

St George up 70% in 5 years.

Median home price down 19% since April 2022

https://www.redfin.com/city/16751/UT/St-George/housing-market

Carlsbad up 72% in 5 years

Median home price down 4% since April 2022

https://www.redfin.com/city/2891/CA/Carlsbad/housing-market

 

 

[sdrealtor]

Sales are up 26% in St George and prices are plummeting due to supply increasing.

Sales are down 25% in Carlsbad and prices are holding due to low supply.

Econ 101. Supply and demand at work. The forces behind both are in place and should continue

And I would argue the Black Swan event was not a return to normalcy for rates. The Black Swan event was ZIRP for decade that resulted in mortgages below 3%. That’s something we’ve never seen in our lifetime and likely wont again.

[Coronita]

Did someone say G59…

 

 

BINGO!

[sdrealtor]

Happy Fourth of July Everyone!

[EconProf]

Good points sdr, and I accept all of your data.  And yes, the unduly low interest rates of 3 years ago could be called a black swan event, which I had not thought of before.  It was, of course, a misguided attempt to goose the economy by the Fed and it goosed prices everywhere.  Glad I locked in a 3% fixed rate on my house.  Now we are in the hangover stage.

A few observations:  supply can increase where land is available and cheap, which is the case in St. George and similar locales.  Coastal San Diego and Carlsbad…nada.  Construction costs also far lower for the same product in the cities you cite.  The far cheaper housing prices in the cities you list will continue to prompt the exodus from CA.  More push/pull comes from the vast difference in taxes, utility costs, homelessness, and decent politicians.  Ready to pay reparations?

BTW, many companies are also choosing to flee, not just people.

Demographics is destiny.

 

 

However

[sdrealtor]

Sorry for slow response but long day at the beach and needed get all the sand out of my britches. And thank you for your quick responses but with the oppressive heat there Im sure you are probably spending your days inside.

I do agree much of the blame lies with JPow and the Fed. The country was in a nice gentile recovery through 2016 until a change of administration pursuing growth at all costs was allowed to run amuck. Through 2019 all we heard was daily tweets about best economy ever, best stock market ever, tax cuts, lowest unemployment ever and more. However, in 2017 it was clear the country had recovered from the Great Recession and the Fed should have started raising rates to keep things on track. I blame JPow for allowing himself to be bullied by a guy who wanted to take credit for a supercharged economy that  ultimately proved to be a disaster for inflationary forces.

I must admit to being confused that you are happy with a 3% mortgage? Isnt the whole point of moving to an isolated town far from any real real job center to have no mortgage? To pay cash for cheap housing with windfall profits from CA. Please dont tell me you moved with Uhaul like my Republican neighbor who left 2 weeks ago for Idaho.

A few observations back at you. When land is available and cheap there is no driver for appreciation. You need high paying jobs in modern industries for that rather than jobs in slaughterhouses and building homes for those slaughterhouse workers.

Here in Coastal San Diego and Carlsbad they are building commercial and residential everywhere! But they are now building mostly higher density. This will provide more affordable homes for our younger resident workers while making single family real estate even more valuable over time. Once again this is simple economics. We have something the destinations of those fleeing here never will. We have tons of high paying jobs in growth industries. I meet plenty of folks who are leaving for the places you hold so dear and unfortunately we are not sending our best. In return those coming here are among the best and brightest. Its tough here and not everyone can make it. Its nice to know there is a place like St George for those that cant.

Demographics truly is destiny.

Sadly, I fear you have let your political biases get the better of your financial well being.

[sdrealtor]

One last data point before heading to the neighbors for cocktails and a swim.

Please allow me to roll some tape to when this all started. In late Feb 2021 you began this thread announcing you were about to leave. Its now just under 2 1/2 years later so lets see how we’ve both fared.

March 2021 the median home price in SG was $482,500

May 2023 the median home price in SG is $499,000

You have seen 3.5% appreciation since then falling far behind inflation.

In real terms you’ve gotten slaughtered!

 

March 2021 the median home price in Carlsbad was $1,041,500

May 2023 the median home price in Carlsbad is $1,432,500

I have seen 37.5% appreciation far outpacing inflation.

In real terms out of the park!

 

You let your politics get the better of your finances. Had you stayed put you’d have realized gains in excess of 30% in SD. This is based upon validated data not some political agenda

[EconProf]

sdr:  In the rarefied world of Carlsbad and its environs in which you circulate, you are avoiding the picture of greater San Diego, and CA in general.  You brag that your tiny slice of San Diego is going up in price, but what about the other 95% or so of San Diego?  And what kind of physical house does one get for that $1,432,500 in Carlsbad?  Perhaps the same structure that goes for half that here.  An ocean view there (rare) will add to that price.  Here  mountain and red canyon views are a given with any luxury house.  Add in the property tax at about 1% of value (mine), utility costs 1/3 of yours, and vastly better schools as measured by all the metrics of student achievement.  Been to downtown San Diego lately?  Ours is hopping with restaurants, theatres, students from our growing university, and tourists.  Zion is a half-hour away, Brian Head for skiers about 3 hours away, Vegas under two hours away.  And for ethnic foods, we have all sorts, with about ten Thai restaurants just for sdr to try.

The US is increasingly stratified by income, so the income-elite can afford Carlsbad, and I’m sure it gives them bragging rights with their friends and relatives nationwide.  St. George…not so much.  But for the other 95% of the population–the ones moving here from CA and San Diego, we will continue to get the influx, as will other similar locations.

You mention we have had 3.5% home appreciation in the last 3 or so years.  This ignores the MIX of housing, since we have a lot of condos going up, and perhaps smaller houses which distorts the picture.  And yes, the more than doubling in mortgage rates have hurt recent sales prices.  Speaking only for myself, Zillow puts my house at $825,000 vs the $550,000 I paid for it 3 years ago.  Probably falling lately due to mortgage rates.

[sdrealtor]

I avoided nothing. San Diego proper is up 30%! Face it you blew it. SG has flat pricing, downward momentum and has fallen far behind considering inflation. The place you continue to bash has blossomed even more with a future even brighter 😎. Yet you continue to lean in on politics all the whole suffering financial losses

[sdrealtor]

I’m downtown often. Catch concerts at Rady Shell (neil young next week), broadway plays (Six this week) and pro sports often none of which you have access to. I hope you enjoy those views through windows because with todays 110 heat only a fool would go out.

My utilities this month for 5 br house

Electricity $0 solar long paid off

Gas $30

Water $55

there’s no way you are at 1/3rd of that.

and stop talking about taxes. All you had to do was stay put long term in this paradise and you would’ve enjoyed taxes as low or lower than you do there. Your real estate taxes are already much higher than mine. They will continue going up and mine will not.

And there you go, cherry, picking a single anecdotal data point when it serves your purposes after trying to chastise me for selecting the city, I reside in with a population nearly 50% larger than yours. But of course I did not “the appreciation in my city for you, but rather for San Diego, which was roughly 30% and much higher than Saint George, which has nothing but head winds ahead of it.

You constantly lean in on this political nonsense. Get over it it’s outside of your control. Make good decisions for yourself. the last 10 years the data does not reflect that you have with your real estate investments which would’ve far out performed Had you just left them in place here.

[sdrealtor]

Lastly, it constantly amazes me that you fail to grasp even the most basic of real estate concepts. When you buy real estate, you are not just buying a house! The house depreciates, and it is the land where the greatest value and opportunity lies. In a place like Saint George people trying to resell Homes will be competing with builders for decades, because there is no shortage of land. Look at what has happened in riverside county. When there are downturns it gets crooshed! Here in Southern California what you get for $1.5m is a very very valuable piece of land that is a limited commodity.

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