lay offs

[bearishgurl]

[quote=Gata]Housing market is due for a correction, prices are unsustainable when work is moving to other States/countries. A friend of mine who is a QCT senior engineer is scouting for a home in ATX as a result of this layoff. He is Mr. SD. QCT is hiring in TX, and opening a new design center. I believe many layoffs will come from SD, and hiring will occur in lower cost areas (such as India, ATX).[/quote]

Good luck to your friend, Gata and I hope he has a nice life in TX. I mean that … sincerely.

But you should be aware that IT DOESN’T MATTER how many homes in SD County are vacated and sold (or foreclosed upon) by QC employees/homeowners who have been laid off. They will quickly be resold and life will go on. There are plenty of buyers out there ready to pounce when a new listing comes out in their area of choice.

SD housing (esp vacant housing which is move-in ready) sells very quickly will continue to do so, and will not languish on the market, IMO.

The exception would be if a fairly new housing tract (<10 yrs old) which was situated close to QC (or other local company conducting mass layoffs) was primarily occupied by worker bees affected by current layoffs being conducted. That situation could create a (temporary) glut in that micro market due to too many homes of the same floorplan entering the market at once (the current owners all bought new construction in the year of the same hiring spree/time frame). But this inventory would likely still be absorbed, even if it took a few months longer than usual.

In the well-established areas of the county, a large percentage (50%+?) of single family homes (SFR's) at all price points are typically purchased with all cash and a lesser portion are purchased with 50%+ cash. And the majority of the balance of the long-owned SFRs in these areas which haven't been listed in decades are paid off, as well. So, in SD's most established areas, it doesn’t matter which local companies are currently hiring or laying off because the vast majority of homeowners there are NOT W-2 employees and never will be.

I don’t think ANY area in SD County is due for a correction. I believe that some micro-areas of the county are still a bit undervalued.

[Anonymous]

You are naïve if you think these majority cash buyers are going to keep coming out of the woodworks forever. Perhaps their money source(s) could dry up as housing becomes less appealing (which it already is at current prices) or the economy turns south. If/when interest rates rise, investors will flee real estate like yesterday’s news.

[Coronita]

Well, I won’t try to predict how much home prices will be affected by this anymore. I’ll just patiently wait and see if it does, and if it does, I’ll jump in, since I doubt I’ll be relocating out of SD for the foreseeable future.

In the meantime, I’ll grind away at paying off my primary and my last rental, so that if opportunity comes around, I can take out another loan, and buy another primary, and mortgage my life away again…Lol.

[ltsddd]

I doubt very much that this layoff at Q will have any detectable impact on the housing market in SD.

[bearishgurl]

[quote=deadzone]You are naïve if you think these majority cash buyers are going to keep coming out of the woodworks forever. Perhaps their money source(s) could dry up as housing becomes less appealing (which it already is at current prices) or the economy turns south. If/when interest rates rise, investors will flee real estate like yesterday’s news.[/quote]deadzone, if SD County residential property begins to become “less appealing” to end users, this will happen in inland areas (over 15 miles from the coast). It may never happen in close in and coastal areas, IMO, especially those areas on the west side of I-5.

As far as investors, I don’t believe they will flee ANY areas of the county including inland areas or low income areas (or both). Mortgage interest rates have nothing to do with it as the vast majority pay all cash for residential properties. If a flipper purchased a property in an inland (and/or low income area where there are far less all-cash end-user buyers) with the intent to flip it and mtg interest rates rise so quickly that they can’t easily flip it to an end user, they will simply rent it out until a seller’s market presents itself again.

No harm done. Everyone needs a place to live.

[fun4vnay2]

SD real estate never goes down.
Please push down this mantra your throat.
Of course you’d have to forget the bust which happened in last 35 years as that would never happen 🙂

Anyway, for QCOM, looks like this is just the beginning unless they find some another revenue stream which is strong enough to keep expensive head count in SD.

A lot of my friends working in qcom has stopped looking for house as they realize how vulnerable they are in sd when it comes to finding another opportunity.

Just sold one of my rentals booking 40% profit and invested the money in bubblicious stock market which may crash anytime. I want to make money on the momentum not on the value and am already up 20% in last few weeks. Not bad to get couple of hundreds of grands for a click of a button and have steel of a heart:-)
but my gut feeling is: stock market would correct at least in the coming time along with housing.

The lesson is: Party as long as the music is going on but exit before the music stops 🙂

Sorry, not being available a lot on this because of other commitments.

[bearishgurl]

[quote=ltsdd]I doubt very much that this layoff at Q will have any detectable impact on the housing market in SD.[/quote]I agree but not for the reason JTR mentioned of affected homeowners being able to avail themselves of loan modifications and/or squatting indefinitely, like what happened in the past.

[fun4vnay2]

Most of the qcom engineers won’t have any issue with paying mortgages
don’t think they’d default….

[bearishgurl]

That’s all well and good, rockingtime, but that comes with the caveat of knowing exactly when to “exit.”

I wish you luck :=)

[Anonymous]

[quote=bearishgurl][quote=deadzone]You are naïve if you think these majority cash buyers are going to keep coming out of the woodworks forever. Perhaps their money source(s) could dry up as housing becomes less appealing (which it already is at current prices) or the economy turns south. If/when interest rates rise, investors will flee real estate like yesterday’s news.[/quote]deadzone, if SD County residential property begins to become “less appealing” to end users, this will happen in inland areas (over 15 miles from the coast). It may never happen in close in and coastal areas, IMO, especially those areas on the west side of I-5.

As far as investors, I don’t believe they will flee ANY areas of the county including inland areas or low income areas (or both). Mortgage interest rates have nothing to do with it as the vast majority pay all cash for residential properties. If a flipper purchased a property in an inland (and/or low income area where there are far less all-cash end-user buyers) with the intent to flip it and mtg interest rates rise so quickly that they can’t easily flip it to an end user, they will simply rent it out until a seller’s market presents itself again.

No harm done. Everyone needs a place to live.[/quote]

bg you are obviously ignorant of basic economics. The reason people are paying cash for properties is due to the simple fact that there is nothing else to invest their money into given zero interest rate policies since 2009. If interest rates go up, the investing landscape changes entirely.

[bearishgurl]

[quote=deadzone][quote=bearishgurl][quote=deadzone]You are naïve if you think these majority cash buyers are going to keep coming out of the woodworks forever. Perhaps their money source(s) could dry up as housing becomes less appealing (which it already is at current prices) or the economy turns south. If/when interest rates rise, investors will flee real estate like yesterday’s news.[/quote]deadzone, if SD County residential property begins to become “less appealing” to end users, this will happen in inland areas (over 15 miles from the coast). It may never happen in close in and coastal areas, IMO, especially those areas on the west side of I-5.

As far as investors, I don’t believe they will flee ANY areas of the county including inland areas or low income areas (or both). Mortgage interest rates have nothing to do with it as the vast majority pay all cash for residential properties. If a flipper purchased a property in an inland (and/or low income area where there are far less all-cash end-user buyers) with the intent to flip it and mtg interest rates rise so quickly that they can’t easily flip it to an end user, they will simply rent it out until a seller’s market presents itself again.

No harm done. Everyone needs a place to live.[/quote]

bg you are obviously ignorant of basic economics. The reason people are paying cash for properties is due to the simple fact that there is nothing else to invest their money into given zero interest rate policies since 2009. If interest rates go up, the investing landscape changes entirely.[/quote]That “landscape” doesn’t change overnight, deadzone. Are we talking about a jumbo CD being paid 2.5% instead of <1% here? What if the initial rate hikes tank the economy and the rates end up going back down (the Federal Funds rate maybe not going all the way back to "0%" but down to 1%)?

If one can pay $340K for a "flipper" SFR and flip it in 60 days to where it is "worth" $475K (in a "0%" rate environment) but is unable to make this profit in a 1-2% environment, then they can just rent it for at $2K to $2400 per month and wait for another day to put it back on the market. The rate of return on a $340K investment + $60K added to it in materials and labor for a total of $400K invested equals rental income of $26,400 yr or 6-7% (not including vacancies).

I can tell you that that is CERTAINLY better than what banks would pay and is a relatively "safe" investment (like bank deposits). The only drawback is that rental property is much more labor intensive than having bank deposits. And most other passive investments are riskier than owning investment RE, imho.

I don't see banks raising their interest rates on deposits above 4% for a long, long time, if ever.

[phaster]

[quote=ltsdd]I doubt very much that this layoff at Q will have any detectable impact on the housing market in SD.[/quote]

catching up on some newspapers and thought I’d drop in and see what others thought about qcom news of this past week

a few weeks ago went to a lunch meeting to be “enlighten” about tax benefits of net-triple-leases, and Delaware statutory trusts for individuals with real estate holdings.

the take away I got from talking to various speakers is there is lots of equity/money from the boomer generation that looking for place to be invested/sheltered.

IMHO the magnitude of equity/money from the boomer generation combined w/ the fed and other central banks around the world printing $$$ combined with relative affordability of housing here in the USA

http://www.demographia.com/dhi.pdf

are the dominant factors for rising prices (here in the USA) of prime real estate (for the time being)

the reason I have this feeling is because last week listened to a pod cast on this american life about a seemingly unrelated topic about a joint GM and Toyota auto plant (in the bay area)

http://www.thisamericanlife.org/radio-archives/episode/561/nummi-2015

looking at the big picture, we americans have become too insulated w/ business as usual and don’t understand the big picture

for example here in California, most people in cities just pay lip service to the drought

yesterday for example was in la jolla visiting family and the big concern was only watering the grass before 10AM while in the mean time ground water levels in the central valley have dropped 200 feet in the past few years

http://www.cbsnews.com/news/depleting-the-water/

personally I see BIG trouble ahead with too many issues being kicked down the road hoping somehow problems will somehow fix itself

like too much unproductive workforce at qcom given global market forces, GM ignoring for too long the bad build quality of their auto (as described in the pod cast I listened to last week), issues with using ground water to support an unsustainable water intensive landscaping lifestyle/economy

http://www.npr.org/sections/money/2015/07/22/425392169/episode-640-the-bottom-of-the-well

and even though for the time being local public pension mismanagement seems have gone away

http://blogs.wsj.com/moneybeat/2015/07/17/san-diego-county-pension-says-goodbye-to-controversial-strategy/

I don’t think its wise to ignore all these various problems (if your goal is to survive)

Give ya a personal example, just happens one neighbor is a lawyer who had the “crow” case which sadly involved a homicide of a 12 year old girl and touched upon section 1983 (civil rights law)

http://www.kpbs.org/news/2011/oct/21/7-million-settlement-reached-stephanie-crowe-murde/

Basically the case involved section 1983 (a “civil rights” violation which might be applicable to an “issue” I inherited) because in that case was told after the “police interviewed a witness in prison and then, because they didn’t like what the witness said, tried to bury the report.”

https://onedrive.live.com/view.aspx?resid=B4A61592A33514F4!120

AND IMHO might be one reason TPTB wanted to delete various eMails

http://www.utsandiego.com/news/2014/jul/31/jan-goldsmith-records-lawsuit-legal-defense/

Looking back one of the only things my six figures in legal bills got me was the engineers report (which I only got when I was sued for quiet title and the significants of which was pointed out to me not too long ago)

See the highlighted comment to the city:

“I understand from the property owner that the sewer line will be deactivated and rerouted within a 3 month period and that this issue will ultimately be moot”

https://onedrive.live.com/redir?resid=B4A61592A33514F4%21114

Have a feeling that all along the city and the owner of the property were trying to cover their backside from what the data points to is a way to game the tax system (by classifying a property as “historic”)

https://onedrive.live.com/view.aspx?resid=B4A61592A33514F4!110

Sadly I’ve learned the hard way that this city is basically very corrupt/mis-managed and there is no incentive to be honest at try and take care of problems when they are small and thus should be more manageable

Looking at the bigger picture, news of layoffs at Q this past week (and even existing RE prices in the local market which are too often unaffordable by too many living in the area) are just a symptoms of a global system that is way out of balance

[bearishgurl]

deadzone, you must be aware that most longtime property owners whose properties are along the CA coast don’t have to sell and have never been in a position to be forced to sell!

They can hang indefinitely into their nineties (with a property mgr who is paid or unpaid). If their heirs don’t want to deal with tenants and don’t want to occupy any of the properties when they pass, THEY are free to put them on the market.

In the well-established areas, there are still a lot of “vacant” homes with furniture or the owner(s) storage inside, either which haven’t been occupied in more than a decade or are used by relatives when they come to SD for a visit. The owners are charged the baseline for utilities and their taxes are next to nothing so THEY DON’T CARE if they EVER have any rental income from it because they have very, very little carrying costs.

If you’re waiting for coastal CA RE to crash (so you can make purchase(s) yourself?) you may be waiting a lo-o-o-ong time, IMO.

[spdrun]

Yet the 2008-2012 crash happened despite those owners.

[flyer]

As with all things, life eventually boils down to “survival of the fittest.”

[Author]

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