North park flips… relatistic prices?

[CA renter]

Truce! 🙂

You think prices here are going to hold steady, while I think they are going to drop. We still have our bet and it’s good until the end of 2012.

[handshake and hug]

CAR 🙂
————-

edit: can we all just go drink a beer already?

[sdrealtor]

No I think prices are going to come down some more also. As a matter of fact we are a month away from heading into seasonal weakness. I just dont see a wholesale collapse ahead and believe prices are much more in line with affordability.

We do need a beer;)

[sdrealtor]

No I think prices are going to come down some more also. As a matter of fact we are a month away from heading into seasonal weakness. I just dont see a wholesale collapse ahead and believe prices are much more in line with affordability.

We do need a beer;)

[sdrealtor]

No I think prices are going to come down some more also. As a matter of fact we are a month away from heading into seasonal weakness. I just dont see a wholesale collapse ahead and believe prices are much more in line with affordability.

We do need a beer;)

[sdrealtor]

No I think prices are going to come down some more also. As a matter of fact we are a month away from heading into seasonal weakness. I just dont see a wholesale collapse ahead and believe prices are much more in line with affordability.

We do need a beer;)

[sdrealtor]

No I think prices are going to come down some more also. As a matter of fact we are a month away from heading into seasonal weakness. I just dont see a wholesale collapse ahead and believe prices are much more in line with affordability.

We do need a beer;)

[jstoesz]

SDR, I think you are missing some things about your dated concept. You keep saying that the 3X is dated, but how come it holds true for the vast percentage of America, what makes San Diego so different. I follow your interest rate and tax rate logic, but interest rates are the same all over the country, so this has no bearing on the national value disparity. If anything interest rates are higher in SD because the larger number of jumbo loans. Additionally, the fact that the rates are so low, just provides more reason to believe that the SD market is more volatile.

As to taxes, yes we have lower prop taxes via prop 13, but when you buy a new home your first years rate is much more in line with the rest of the country. It only becomes more reasonable when you have owned your home for many years and there is an appreciation bubble. So this does not help new or repeat buyers from a cash flow standpoint (and buyers set the price of a home, not the sellers)

To your 75th percentile issue, this is not true nationally. The Median income can not responsibly afford the median home, and that is largely a California concept. The reason why the 35+ percent of people rent nationally is not necessarily because they can not afford to buy something on paper, but for a variety of other reasons. People can not save for a down payment, they have horrible credit/debt, they do not want to buy for mobility reasons, and a host of others.

So in conclusion, there is no good reason (other than rampant speculation and government intervention) as to why San Diego is 214th out of 225 metro areas in terms of affordability.

[jstoesz]

SDR, I think you are missing some things about your dated concept. You keep saying that the 3X is dated, but how come it holds true for the vast percentage of America, what makes San Diego so different. I follow your interest rate and tax rate logic, but interest rates are the same all over the country, so this has no bearing on the national value disparity. If anything interest rates are higher in SD because the larger number of jumbo loans. Additionally, the fact that the rates are so low, just provides more reason to believe that the SD market is more volatile.

As to taxes, yes we have lower prop taxes via prop 13, but when you buy a new home your first years rate is much more in line with the rest of the country. It only becomes more reasonable when you have owned your home for many years and there is an appreciation bubble. So this does not help new or repeat buyers from a cash flow standpoint (and buyers set the price of a home, not the sellers)

To your 75th percentile issue, this is not true nationally. The Median income can not responsibly afford the median home, and that is largely a California concept. The reason why the 35+ percent of people rent nationally is not necessarily because they can not afford to buy something on paper, but for a variety of other reasons. People can not save for a down payment, they have horrible credit/debt, they do not want to buy for mobility reasons, and a host of others.

So in conclusion, there is no good reason (other than rampant speculation and government intervention) as to why San Diego is 214th out of 225 metro areas in terms of affordability.

[jstoesz]

SDR, I think you are missing some things about your dated concept. You keep saying that the 3X is dated, but how come it holds true for the vast percentage of America, what makes San Diego so different. I follow your interest rate and tax rate logic, but interest rates are the same all over the country, so this has no bearing on the national value disparity. If anything interest rates are higher in SD because the larger number of jumbo loans. Additionally, the fact that the rates are so low, just provides more reason to believe that the SD market is more volatile.

As to taxes, yes we have lower prop taxes via prop 13, but when you buy a new home your first years rate is much more in line with the rest of the country. It only becomes more reasonable when you have owned your home for many years and there is an appreciation bubble. So this does not help new or repeat buyers from a cash flow standpoint (and buyers set the price of a home, not the sellers)

To your 75th percentile issue, this is not true nationally. The Median income can not responsibly afford the median home, and that is largely a California concept. The reason why the 35+ percent of people rent nationally is not necessarily because they can not afford to buy something on paper, but for a variety of other reasons. People can not save for a down payment, they have horrible credit/debt, they do not want to buy for mobility reasons, and a host of others.

So in conclusion, there is no good reason (other than rampant speculation and government intervention) as to why San Diego is 214th out of 225 metro areas in terms of affordability.

[jstoesz]

SDR, I think you are missing some things about your dated concept. You keep saying that the 3X is dated, but how come it holds true for the vast percentage of America, what makes San Diego so different. I follow your interest rate and tax rate logic, but interest rates are the same all over the country, so this has no bearing on the national value disparity. If anything interest rates are higher in SD because the larger number of jumbo loans. Additionally, the fact that the rates are so low, just provides more reason to believe that the SD market is more volatile.

As to taxes, yes we have lower prop taxes via prop 13, but when you buy a new home your first years rate is much more in line with the rest of the country. It only becomes more reasonable when you have owned your home for many years and there is an appreciation bubble. So this does not help new or repeat buyers from a cash flow standpoint (and buyers set the price of a home, not the sellers)

To your 75th percentile issue, this is not true nationally. The Median income can not responsibly afford the median home, and that is largely a California concept. The reason why the 35+ percent of people rent nationally is not necessarily because they can not afford to buy something on paper, but for a variety of other reasons. People can not save for a down payment, they have horrible credit/debt, they do not want to buy for mobility reasons, and a host of others.

So in conclusion, there is no good reason (other than rampant speculation and government intervention) as to why San Diego is 214th out of 225 metro areas in terms of affordability.

[jstoesz]

SDR, I think you are missing some things about your dated concept. You keep saying that the 3X is dated, but how come it holds true for the vast percentage of America, what makes San Diego so different. I follow your interest rate and tax rate logic, but interest rates are the same all over the country, so this has no bearing on the national value disparity. If anything interest rates are higher in SD because the larger number of jumbo loans. Additionally, the fact that the rates are so low, just provides more reason to believe that the SD market is more volatile.

As to taxes, yes we have lower prop taxes via prop 13, but when you buy a new home your first years rate is much more in line with the rest of the country. It only becomes more reasonable when you have owned your home for many years and there is an appreciation bubble. So this does not help new or repeat buyers from a cash flow standpoint (and buyers set the price of a home, not the sellers)

To your 75th percentile issue, this is not true nationally. The Median income can not responsibly afford the median home, and that is largely a California concept. The reason why the 35+ percent of people rent nationally is not necessarily because they can not afford to buy something on paper, but for a variety of other reasons. People can not save for a down payment, they have horrible credit/debt, they do not want to buy for mobility reasons, and a host of others.

So in conclusion, there is no good reason (other than rampant speculation and government intervention) as to why San Diego is 214th out of 225 metro areas in terms of affordability.

[sdrealtor]

Some good points to address. First off, SD is one of the places that has traditionally been more expensive just like SF, LA and NYC. There is something known as Glamour Cities (someone with lots of degrees put out a paper on it) where things sell at a premium. Given the choice of equal home prices most people would pay a premium to live in SD over Paducah, KS.

2nd, the 3X measure being outdated has to do with affordability and people are willing to pay a premium to live here if they can afford it. We are also a higher cost area and get the benefit of low interest rates on higher mortgage amounts (up to $697,500) that many parts of the country do not.

3rd, tax rates in CA are lower and in many cases much lower than other parts of the country. Back east where I grew up tax rates are several times greater on a givne assessed value. Additionally repeat buyers over 55 can transfer their tax basis so your point that it doesnt help repeat buyers is incorrect also.

4th, Prop 13 has a huge impact here because long time owners dont get re-assessed every year. Back where I grew up, tax are re-assessed each year. Eventually they get excessive for the retirees who move. When I think back to where I grew up, within 5 years of their last child graduating from college I cant think of a single parent that stayed in their homes located in the high tax rate prime school districts. Around here they stay because the taxes are low which keeps inventory constrained to a degree not found in other states.

5th, the weather and the beaches. Back east its not just the taxes but the harsh weather. As soon as they are able most retire to a warm climate like FLA. In SD they are already in a warm climate and have the added benfit of low real estate taxes. One of the reasons I moved here was knowing that when it came time to retire I wouldnt need or want to go elsewhere. I hate moving.

I know folks will say the weather has always been great here but dont underestimate the impact of the combination of Prop 13 (which hasnt always been here and took several decades to truly mainfest itself) and the weather. Many of the prime neighborhoods around here were sold to young families in the 60’s and 70’s. Most of the long time owners of these homes would have moved on in the 1990’s and 2000’s but stay on because the weather is fine for retirement and the low taxes cant be beat.

The idea that the reason why people dont buy isnt highly corrolated to not being able to afford it is utter nonsense. I never said it was a one-to-pne relationship but the corrolation must be off the charts.

Lastly, why shouldnt SD be one of the 10 most expensive metro areas on a relative basis. Its one of the 10 most desireable metro areas and better things always sell for more than less desireable things. Why is that so hard to beleive?

This of course begs the obvious question. If its not worth paying more to live here, why are YOU here?

[sdrealtor]

Some good points to address. First off, SD is one of the places that has traditionally been more expensive just like SF, LA and NYC. There is something known as Glamour Cities (someone with lots of degrees put out a paper on it) where things sell at a premium. Given the choice of equal home prices most people would pay a premium to live in SD over Paducah, KS.

2nd, the 3X measure being outdated has to do with affordability and people are willing to pay a premium to live here if they can afford it. We are also a higher cost area and get the benefit of low interest rates on higher mortgage amounts (up to $697,500) that many parts of the country do not.

3rd, tax rates in CA are lower and in many cases much lower than other parts of the country. Back east where I grew up tax rates are several times greater on a givne assessed value. Additionally repeat buyers over 55 can transfer their tax basis so your point that it doesnt help repeat buyers is incorrect also.

4th, Prop 13 has a huge impact here because long time owners dont get re-assessed every year. Back where I grew up, tax are re-assessed each year. Eventually they get excessive for the retirees who move. When I think back to where I grew up, within 5 years of their last child graduating from college I cant think of a single parent that stayed in their homes located in the high tax rate prime school districts. Around here they stay because the taxes are low which keeps inventory constrained to a degree not found in other states.

5th, the weather and the beaches. Back east its not just the taxes but the harsh weather. As soon as they are able most retire to a warm climate like FLA. In SD they are already in a warm climate and have the added benfit of low real estate taxes. One of the reasons I moved here was knowing that when it came time to retire I wouldnt need or want to go elsewhere. I hate moving.

I know folks will say the weather has always been great here but dont underestimate the impact of the combination of Prop 13 (which hasnt always been here and took several decades to truly mainfest itself) and the weather. Many of the prime neighborhoods around here were sold to young families in the 60’s and 70’s. Most of the long time owners of these homes would have moved on in the 1990’s and 2000’s but stay on because the weather is fine for retirement and the low taxes cant be beat.

The idea that the reason why people dont buy isnt highly corrolated to not being able to afford it is utter nonsense. I never said it was a one-to-pne relationship but the corrolation must be off the charts.

Lastly, why shouldnt SD be one of the 10 most expensive metro areas on a relative basis. Its one of the 10 most desireable metro areas and better things always sell for more than less desireable things. Why is that so hard to beleive?

This of course begs the obvious question. If its not worth paying more to live here, why are YOU here?

[sdrealtor]

Some good points to address. First off, SD is one of the places that has traditionally been more expensive just like SF, LA and NYC. There is something known as Glamour Cities (someone with lots of degrees put out a paper on it) where things sell at a premium. Given the choice of equal home prices most people would pay a premium to live in SD over Paducah, KS.

2nd, the 3X measure being outdated has to do with affordability and people are willing to pay a premium to live here if they can afford it. We are also a higher cost area and get the benefit of low interest rates on higher mortgage amounts (up to $697,500) that many parts of the country do not.

3rd, tax rates in CA are lower and in many cases much lower than other parts of the country. Back east where I grew up tax rates are several times greater on a givne assessed value. Additionally repeat buyers over 55 can transfer their tax basis so your point that it doesnt help repeat buyers is incorrect also.

4th, Prop 13 has a huge impact here because long time owners dont get re-assessed every year. Back where I grew up, tax are re-assessed each year. Eventually they get excessive for the retirees who move. When I think back to where I grew up, within 5 years of their last child graduating from college I cant think of a single parent that stayed in their homes located in the high tax rate prime school districts. Around here they stay because the taxes are low which keeps inventory constrained to a degree not found in other states.

5th, the weather and the beaches. Back east its not just the taxes but the harsh weather. As soon as they are able most retire to a warm climate like FLA. In SD they are already in a warm climate and have the added benfit of low real estate taxes. One of the reasons I moved here was knowing that when it came time to retire I wouldnt need or want to go elsewhere. I hate moving.

I know folks will say the weather has always been great here but dont underestimate the impact of the combination of Prop 13 (which hasnt always been here and took several decades to truly mainfest itself) and the weather. Many of the prime neighborhoods around here were sold to young families in the 60’s and 70’s. Most of the long time owners of these homes would have moved on in the 1990’s and 2000’s but stay on because the weather is fine for retirement and the low taxes cant be beat.

The idea that the reason why people dont buy isnt highly corrolated to not being able to afford it is utter nonsense. I never said it was a one-to-pne relationship but the corrolation must be off the charts.

Lastly, why shouldnt SD be one of the 10 most expensive metro areas on a relative basis. Its one of the 10 most desireable metro areas and better things always sell for more than less desireable things. Why is that so hard to beleive?

This of course begs the obvious question. If its not worth paying more to live here, why are YOU here?

[sdrealtor]

Some good points to address. First off, SD is one of the places that has traditionally been more expensive just like SF, LA and NYC. There is something known as Glamour Cities (someone with lots of degrees put out a paper on it) where things sell at a premium. Given the choice of equal home prices most people would pay a premium to live in SD over Paducah, KS.

2nd, the 3X measure being outdated has to do with affordability and people are willing to pay a premium to live here if they can afford it. We are also a higher cost area and get the benefit of low interest rates on higher mortgage amounts (up to $697,500) that many parts of the country do not.

3rd, tax rates in CA are lower and in many cases much lower than other parts of the country. Back east where I grew up tax rates are several times greater on a givne assessed value. Additionally repeat buyers over 55 can transfer their tax basis so your point that it doesnt help repeat buyers is incorrect also.

4th, Prop 13 has a huge impact here because long time owners dont get re-assessed every year. Back where I grew up, tax are re-assessed each year. Eventually they get excessive for the retirees who move. When I think back to where I grew up, within 5 years of their last child graduating from college I cant think of a single parent that stayed in their homes located in the high tax rate prime school districts. Around here they stay because the taxes are low which keeps inventory constrained to a degree not found in other states.

5th, the weather and the beaches. Back east its not just the taxes but the harsh weather. As soon as they are able most retire to a warm climate like FLA. In SD they are already in a warm climate and have the added benfit of low real estate taxes. One of the reasons I moved here was knowing that when it came time to retire I wouldnt need or want to go elsewhere. I hate moving.

I know folks will say the weather has always been great here but dont underestimate the impact of the combination of Prop 13 (which hasnt always been here and took several decades to truly mainfest itself) and the weather. Many of the prime neighborhoods around here were sold to young families in the 60’s and 70’s. Most of the long time owners of these homes would have moved on in the 1990’s and 2000’s but stay on because the weather is fine for retirement and the low taxes cant be beat.

The idea that the reason why people dont buy isnt highly corrolated to not being able to afford it is utter nonsense. I never said it was a one-to-pne relationship but the corrolation must be off the charts.

Lastly, why shouldnt SD be one of the 10 most expensive metro areas on a relative basis. Its one of the 10 most desireable metro areas and better things always sell for more than less desireable things. Why is that so hard to beleive?

This of course begs the obvious question. If its not worth paying more to live here, why are YOU here?

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