Lucera Condo – $199k

[zzz]

To sdnerd’s point that IT is still growing by leaps and bounds, I would have to say based on the number of jobs out there, there is still a lot of demand for IT talent, and people are still moving here for those six figure jobs. Now that’s not to say that the real estate folks aren’t moving out, because they are. But I do agree with sdnerd that there are a lot more 20/30 somethings that have some serious cash. I have also found that SD is filled with a lot of niche businesses that generate a lot of money – and cater to segments that are “less” affected by recessions – meaning that they are doing incredibly well in this market, even better than last year despite the downturn. Very few people I know work for big companies, most work for smaller to mid size firms that have been in business for 10+ years- that are not VC funded. A lot of people I know also work for non SD headquartered businesses – IE bay area companies that have staff down here, or are self employed, own their own companies.

I would also support him that a couple has no problem making 150-200K as a dual income in their mid or late 20’s.
I know many people who worked in other major markets (SF, Chicago, NY) and made 150K+ for many years starting in their mid 20s, early 30s, before moving here. I know its crazy to think some people right out of college made 70-90K at age 21 or 22, but that is the reality in some fields, and often switched jobs every 1-2 years and bumped their pay every time they made a switch.

As SD Realtor has stated many times – there are many reasons why people buy homes. I know of many people in their 30s who are looking to buy in the next year- with substantial cash reserves. They are not looking at their home as an investment opportunity, they simply just want a home. I can’t question the sanity of it, I just happen to agree with sdnerd that there is demand out there – rational or not. I’m not suggesting the demand is great enough to prop up this market – just that it might cause some seasonal or temporary exuberance. I am often surprised by how many people I do know who are willing to buy even though they know the market is going to get worse. Just like I’m often surprised how many people switch luxury cars every 3-5 years despite knowing they lose a substantial portion of the cars value in the first few years. Most people spend their discretionary income on disposable items ( think electronics), entertainment ( eating out, vacations, drinking), or on depreciating assets – is it smart to spend $500-$1000/month of eating out/ drinking – no, but people still do it and so I think people too often apply their own rationality to why others do things. People who make a lot of money want to enjoy the fruits of their labor.

[zzz]

To sdnerd’s point that IT is still growing by leaps and bounds, I would have to say based on the number of jobs out there, there is still a lot of demand for IT talent, and people are still moving here for those six figure jobs. Now that’s not to say that the real estate folks aren’t moving out, because they are. But I do agree with sdnerd that there are a lot more 20/30 somethings that have some serious cash. I have also found that SD is filled with a lot of niche businesses that generate a lot of money – and cater to segments that are “less” affected by recessions – meaning that they are doing incredibly well in this market, even better than last year despite the downturn. Very few people I know work for big companies, most work for smaller to mid size firms that have been in business for 10+ years- that are not VC funded. A lot of people I know also work for non SD headquartered businesses – IE bay area companies that have staff down here, or are self employed, own their own companies.

I would also support him that a couple has no problem making 150-200K as a dual income in their mid or late 20’s.
I know many people who worked in other major markets (SF, Chicago, NY) and made 150K+ for many years starting in their mid 20s, early 30s, before moving here. I know its crazy to think some people right out of college made 70-90K at age 21 or 22, but that is the reality in some fields, and often switched jobs every 1-2 years and bumped their pay every time they made a switch.

As SD Realtor has stated many times – there are many reasons why people buy homes. I know of many people in their 30s who are looking to buy in the next year- with substantial cash reserves. They are not looking at their home as an investment opportunity, they simply just want a home. I can’t question the sanity of it, I just happen to agree with sdnerd that there is demand out there – rational or not. I’m not suggesting the demand is great enough to prop up this market – just that it might cause some seasonal or temporary exuberance. I am often surprised by how many people I do know who are willing to buy even though they know the market is going to get worse. Just like I’m often surprised how many people switch luxury cars every 3-5 years despite knowing they lose a substantial portion of the cars value in the first few years. Most people spend their discretionary income on disposable items ( think electronics), entertainment ( eating out, vacations, drinking), or on depreciating assets – is it smart to spend $500-$1000/month of eating out/ drinking – no, but people still do it and so I think people too often apply their own rationality to why others do things. People who make a lot of money want to enjoy the fruits of their labor.

[(former)FormerSanDiegan]

It seems to me that people like to make up pseudo stats and throw them out there as if they were true.

Please provide data to support the following :

The reality is that only around 3% of the population of SD can afford to buy a home there.

[(former)FormerSanDiegan]

It seems to me that people like to make up pseudo stats and throw them out there as if they were true.

Please provide data to support the following :

The reality is that only around 3% of the population of SD can afford to buy a home there.

[(former)FormerSanDiegan]

It seems to me that people like to make up pseudo stats and throw them out there as if they were true.

Please provide data to support the following :

The reality is that only around 3% of the population of SD can afford to buy a home there.

[(former)FormerSanDiegan]

It seems to me that people like to make up pseudo stats and throw them out there as if they were true.

Please provide data to support the following :

The reality is that only around 3% of the population of SD can afford to buy a home there.

[(former)FormerSanDiegan]

It seems to me that people like to make up pseudo stats and throw them out there as if they were true.

Please provide data to support the following :

The reality is that only around 3% of the population of SD can afford to buy a home there.

[(former)FormerSanDiegan]

According to the census bureau about 25.5% of San Diego households had income that exceeds 100K. Nearly 11% of households have incomes exceeding 150K.

With the median price in the 450K range or so, I believe that the number of households who can afford the median house must be somewhere between 12-15%, assuming conservative DTIs.

The pseudo stat 3% number thrown around above is off by at least a factor of 4.

[(former)FormerSanDiegan]

According to the census bureau about 25.5% of San Diego households had income that exceeds 100K. Nearly 11% of households have incomes exceeding 150K.

With the median price in the 450K range or so, I believe that the number of households who can afford the median house must be somewhere between 12-15%, assuming conservative DTIs.

The pseudo stat 3% number thrown around above is off by at least a factor of 4.

[(former)FormerSanDiegan]

According to the census bureau about 25.5% of San Diego households had income that exceeds 100K. Nearly 11% of households have incomes exceeding 150K.

With the median price in the 450K range or so, I believe that the number of households who can afford the median house must be somewhere between 12-15%, assuming conservative DTIs.

The pseudo stat 3% number thrown around above is off by at least a factor of 4.

[(former)FormerSanDiegan]

According to the census bureau about 25.5% of San Diego households had income that exceeds 100K. Nearly 11% of households have incomes exceeding 150K.

With the median price in the 450K range or so, I believe that the number of households who can afford the median house must be somewhere between 12-15%, assuming conservative DTIs.

The pseudo stat 3% number thrown around above is off by at least a factor of 4.

[(former)FormerSanDiegan]

According to the census bureau about 25.5% of San Diego households had income that exceeds 100K. Nearly 11% of households have incomes exceeding 150K.

With the median price in the 450K range or so, I believe that the number of households who can afford the median house must be somewhere between 12-15%, assuming conservative DTIs.

The pseudo stat 3% number thrown around above is off by at least a factor of 4.

[EJ]

I guess I misinterpreted the statement:

“a LOT of 20-30 year olds who’ve had 6 figure incomes the last 8 years”

It sounds like individuals … I agree a greater percentage of households in this age range will have incomes > $100k

About 30% of all households make more than 100k in SD county.
http://factfinder.census.gov/

About 20% of population is 20-30.
http://www.qolsandiego.net/PDF/table_SDCo_demograph.pdf

So assuming that 20-30 are at average incomes this means 6% of population is in that age range and making more than $100k. This is erring in benefit of your point … peak earning years are not until your 50’s.

There are several problems with assuming that this 6% has been saving and is ready to buy. What percent of this age group is married and wanting to buy? Overall, 50% of SD is married, I couldn’t find any marriage data by age but I would guess the percentage is much lower for 20-30 year olds (go to PB on the weekend). Anyhoo, assume 50% for lack of better data, now the contribution of HH in this age/income bracket who would be interested in buying is about 3% of the population.

Now the question is, how many of these people want to pay 300k for a small 2 bedroom apartment in UTC? Even with the conservative assumptions stated, I still don’t see much demand coming from that age group.

[EJ]

I guess I misinterpreted the statement:

“a LOT of 20-30 year olds who’ve had 6 figure incomes the last 8 years”

It sounds like individuals … I agree a greater percentage of households in this age range will have incomes > $100k

About 30% of all households make more than 100k in SD county.
http://factfinder.census.gov/

About 20% of population is 20-30.
http://www.qolsandiego.net/PDF/table_SDCo_demograph.pdf

So assuming that 20-30 are at average incomes this means 6% of population is in that age range and making more than $100k. This is erring in benefit of your point … peak earning years are not until your 50’s.

There are several problems with assuming that this 6% has been saving and is ready to buy. What percent of this age group is married and wanting to buy? Overall, 50% of SD is married, I couldn’t find any marriage data by age but I would guess the percentage is much lower for 20-30 year olds (go to PB on the weekend). Anyhoo, assume 50% for lack of better data, now the contribution of HH in this age/income bracket who would be interested in buying is about 3% of the population.

Now the question is, how many of these people want to pay 300k for a small 2 bedroom apartment in UTC? Even with the conservative assumptions stated, I still don’t see much demand coming from that age group.

[EJ]

I guess I misinterpreted the statement:

“a LOT of 20-30 year olds who’ve had 6 figure incomes the last 8 years”

It sounds like individuals … I agree a greater percentage of households in this age range will have incomes > $100k

About 30% of all households make more than 100k in SD county.
http://factfinder.census.gov/

About 20% of population is 20-30.
http://www.qolsandiego.net/PDF/table_SDCo_demograph.pdf

So assuming that 20-30 are at average incomes this means 6% of population is in that age range and making more than $100k. This is erring in benefit of your point … peak earning years are not until your 50’s.

There are several problems with assuming that this 6% has been saving and is ready to buy. What percent of this age group is married and wanting to buy? Overall, 50% of SD is married, I couldn’t find any marriage data by age but I would guess the percentage is much lower for 20-30 year olds (go to PB on the weekend). Anyhoo, assume 50% for lack of better data, now the contribution of HH in this age/income bracket who would be interested in buying is about 3% of the population.

Now the question is, how many of these people want to pay 300k for a small 2 bedroom apartment in UTC? Even with the conservative assumptions stated, I still don’t see much demand coming from that age group.

[Author]

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