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July 26, 2015 at 4:55 PM #788284July 26, 2015 at 5:08 PM #788285
spdrun
ParticipantI have to say that you’re wrong. Maybe for SFH properties, but condos built in the 60s through 90s also fell hard.
July 26, 2015 at 9:04 PM #788289bearishgurl
Participant[quote=spdrun]I have to say that you’re wrong. Maybe for SFH properties, but condos built in the 60s through 90s also fell hard.[/quote]That’s because of too many units in one complex which were rented causing would-be buyers difficulty in obtaining financing.
The older condo complexes in SD County appeal to 1st time buyers who don’t want to pay Mello Roos and (usually) first-time individual investors for the same reason. Both of these types of buyers typically need mortgage financing as they don’t have the funds to pay all cash.
It’s different in LA County. Since there are few to zero newer condo complexes there (newer than about ’86 to ’92, depending on city), investors of all stripes (including many thousands of foreign investors) typically purchase older condo units for all cash and then go in and do a light rehab (if needed) after COE and before advertising them them for rent. Typical upgrades are bathroom tile, new countertops in kitchen/baths, laminate flooring and wood-look window blinds … stuff that is easy to clean and appeals to everyone.
July 26, 2015 at 10:08 PM #788295fun4vnay2
ParticipantIt’s truly different this time 😉
July 26, 2015 at 10:42 PM #788302Anonymous
Guest[quote=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.
.[/quote]
That’s your argument for why SD real estate cannot go down? You could say the same thing about any city, has nothing to do with prices. There are greater market forces that are driving real estate nationally, San Diego is being buoyed by these same forces.
July 26, 2015 at 10:53 PM #788304an
Participant[quote=rockingtime]It’s truly different this time ;-)[/quote]It truly is different this time. It has always been different every single time, so no point is expecting it to be the same.
July 26, 2015 at 11:22 PM #788306Participant[quote=deadzone][quote=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.
[/quote]That’s your argument for why SD real estate cannot go down? You could say the same thing about any city, has nothing to do with prices. There are greater market forces that are driving real estate nationally, San Diego is being buoyed by these same forces.[/quote]No, deadzone. Actually, SD (and the rest of coastal CA) is NOT “buoyed by the same forces” as the rest of the nation. Not by a long shot.
You’re not taking into account the effects of Prop 13 and its progeny (Props 58 and 193). These sections (still on CA’s books at this late date) are a HUGE disincentive to list property for sale . . . EVER . . . whether residential or commercial. It’s cheap and lucrative to keep it all in the family . . . for generations!
The “Prop 13 phenomenon” keeps inventory chronically low throughout the state which has the effect of keeping priced pumped up. And it’s not “artificial.” It’s the law!
The only areas Prop 13 really doesn’t affect greatly are those areas which were originally built since 2000, and thus the affected owners are paying market rate (or near market-rate) property taxes. Very few of these newer tracts are within 5 miles of the ocean … nearly all are 6-150 miles from the ocean.
There is absolutely no comparison to the residential market along the CA coast versus any out-of-state market … even along the east coast. None at all. It is truly different … both this time and at all other times.
July 27, 2015 at 7:46 AM #788308ParticipantHere is my take: The reasons for bust is always different every time but the boom/bust is always the same
Been following this forum for long time, It is amusing to see the folks here who used to say 8 years back that it is not different this time are now saying it is different this time.
July 27, 2015 at 7:48 AM #788309Participant[quote=bearishgurl]That’s all well and good, rockingtime, but that comes with the caveat of knowing exactly when to “exit.”
I wish you luck :=)[/quote]
I need luck 🙂
Yeah, I usually make 20% profit in few weeks and exit. Served me wellLast time when china was down, I bought ASHR and made 20% in a day n exited.
It is down today as well, probably more opportunity..July 27, 2015 at 11:25 AM #788315Participant[quote=rockingtime]Here is my take: The reasons for bust is always different every time but the boom/bust is always the same
Been following this forum for long time, It is amusing to see the folks here who used to say 8 years back that it is not different this time are now saying it is different this time.[/quote]Every boom/bust reasons and timing and severity is different. To say boom/bust is always the same is like saying when you flip a coin, you’ll get a head.
July 27, 2015 at 11:35 AM #788316Guest[quote=bearishgurl][quote=deadzone][quote=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.
[/quote]That’s your argument for why SD real estate cannot go down? You could say the same thing about any city, has nothing to do with prices. There are greater market forces that are driving real estate nationally, San Diego is being buoyed by these same forces.[/quote]No, deadzone. Actually, SD (and the rest of coastal CA) is NOT “buoyed by the same forces” as the rest of the nation. Not by a long shot.
You’re not taking into account the effects of Prop 13 and its progeny (Props 58 and 193). These sections (still on CA’s books at this late date) are a HUGE disincentive to list property for sale . . . EVER . . . whether residential or commercial. It’s cheap and lucrative to keep it all in the family . . . for generations!
The “Prop 13 phenomenon” keeps inventory chronically low throughout the state which has the effect of keeping priced pumped up. And it’s not “artificial.” It’s the law!
The only areas Prop 13 really doesn’t affect greatly are those areas which were originally built since 2000, and thus the affected owners are paying market rate (or near market-rate) property taxes. Very few of these newer tracts are within 5 miles of the ocean … nearly all are 6-150 miles from the ocean.
There is absolutely no comparison to the residential market along the CA coast versus any out-of-state market … even along the east coast. None at all. It is truly different … both this time and at all other times.[/quote]
What does any of this have to do with your contention that there is an unlimited supply of buyers willing to shell out all cash?
July 27, 2015 at 6:09 PM #788333Participant[quote=deadzone][quote=bearishgurl][quote=deadzone][quote=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.
[/quote]That’s your argument for why SD real estate cannot go down? You could say the same thing about any city, has nothing to do with prices. There are greater market forces that are driving real estate nationally, San Diego is being buoyed by these same forces.[/quote]No, deadzone. Actually, SD (and the rest of coastal CA) is NOT “buoyed by the same forces” as the rest of the nation. Not by a long shot.
You’re not taking into account the effects of Prop 13 and its progeny (Props 58 and 193). These sections (still on CA’s books at this late date) are a HUGE disincentive to list property for sale . . . EVER . . . whether residential or commercial. It’s cheap and lucrative to keep it all in the family . . . for generations!
The “Prop 13 phenomenon” keeps inventory chronically low throughout the state which has the effect of keeping priced pumped up. And it’s not “artificial.” It’s the law!
The only areas Prop 13 really doesn’t affect greatly are those areas which were originally built since 2000, and thus the affected owners are paying market rate (or near market-rate) property taxes. Very few of these newer tracts are within 5 miles of the ocean … nearly all are 6-150 miles from the ocean.
There is absolutely no comparison to the residential market along the CA coast versus any out-of-state market … even along the east coast. None at all. It is truly different … both this time and at all other times.[/quote]
What does any of this have to do with your contention that there is an unlimited supply of buyers willing to shell out all cash?[/quote]
It’s not the same argument, deadzone. This particular “argument” supports my assertion that chronic limited inventory all over the state keeps CA RE prices from cratering and will continue to do so as long as Props 13, 58 and 193 remain on its books. And yes, listing inventory is also extremely limited in CA towns with <15K population. I know because I've been doing cursory checks online for about 18 months in different (rural) zip codes that I was exploring for retirement purposes.
July 27, 2015 at 6:31 PM #788334GuestThose may be valid reasons for low inventory but they are unrelated to the larger macro-economic reality that higher interest rates will hurt the housing market across the board, read Rich’s latest article you may learn something.
July 27, 2015 at 10:25 PM #788344flyer
ParticipantAlways enjoy the articles Rich writes. I definitely think it will be interesting (and fun) to see which way things go wrt real estate in the coming decade or so.
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