Price war on my street

[santeeman]

I must be missing something here. Are you saying that
if the median price for a home in San Diego is $499,000,and the decline seen is 50%, or down to 250k, folks with a median income of approximately 65k cannot afford to own their home?

[no_such_reality]

At $250,000, with a 6% loan and 10% down, the annual PITI is just above the recommended 30% of income guideline.

So basically, yes, that’s the point, at current income levels (which are currently inflated by home bubble profits), cutting the current median in half, just barely makes it affordable if the present very low loan rates remain.

[santeeman]

I alone make over that. I don’t know but, I have a feeling that most folks who buy or have bought a home are a two income family. Everyone I know in Santee, a blue collar, middle class area, makes more than that/are a 2 income family. That’s seem’s real unrealistic to me. Folks don’t seem to worried about losing their homes. Factor in that rents in my area alone for a sfh are mostly 1800 plus, at least(Santee is a pretty cheap area) and you have a good profit, for renting out the house you bought for 250k. Doesn’t seem too likely to me. I do feel personally, they’re coming close to that though. More like 300kish, or more.

[no_such_reality]

Santee is a high income zone. 🙂

Chalk it up to the median math. The median county wide will be $250,000. That means places like La Jolla hypotethically are still $700K, Santee is $350K and National City are $150K. Keep in mind the median is a mix of condos, SFHs, townhouses including both the good and bad areas.

Santee has a 2005 median household (family) income of $73.8K

San Diego (City) is lower at $62.1K

San Diego County is a little higher at $64.3K

National city lower still at approx $41K

At least to the local Association of Governments.

[(former)FormerSanDiegan]

n_s_r –

Your reasoning for home prices comparing median income to median home prices using lender qualifications is flawed.
The problem : Median income is based on ranking ALL households. Homeowners make up ~60% or less of households in San Diego.

Therefore the folks in the median income range are at the very bottom portion of the home buying chain. Think starter condos when comparing to median incomes.

[santeeman]

Dang, didn’t know that, thought it was the 65k someone referenced. According to the “Sperlings Best Places to live”, Santee, has absolutely NO houses vacant, yet houses here are cheaper than other areas,I thought that was interesting. I am sure someone will tell me why that list is not accurate though.

FSD

I am not an expert, by any means, but I was thinking the same thing,younger/less money= condo.

[Californiabrownbear]

Santee does have vacant homes. I purchased a fixer upper 6 months ago that was vacant for 2-3 years (probate). I have taken walks through our neighborhood and seen several vacant homes for sale. They are all fixer uppers, and flippers would have jumped on these 1 year ago.

[no_such_reality]

FSD, baloney. So me the stats that show non-home owners have substantially less income.

Median income is the appropriate comparison because it tells you where the middle of the pile is. Similarly, median home price shows you where the middle of the home pile is.

[santeeman]

CA brown bear

Just outta curiosity,where abouts is this home located?Don’t get me wrong, I am not out to argue this point, just curious. It might be the reason they are empty is that they are in a less desirable area, haven’t seen any myself. The areas I frequent are the more desirable parts of town.

[Californiabrownbear]

Santeeman,
The homes I’m referring to are east of Magnolia and north of Mast. These are older homes built in the 70’s.

Without getting too specific, the home we purchased 6 months ago is in a nice little neighborhood near Santana High and the house was vacant for so long due to a long probate fight between family members of the deceased. It had 2 or 3 buyers before us and fell out of escrow due to the seemingly endless probate. We purchased for $75k less than one of the previous buyers, and in fact our home inspector made a bid on our home (intending to flip it), but was outbid by another buyer during the frenzy of ’04.

[powayseller]

#1 lowered their price to $440K – $470K and is now in escrow.

#2 lowered their price to $515K last week and having an Open House every other Sunday from 1-4pm.

#3 is having lots of Open Houses.

A fourth home, 300 sq ft smaller than these three, closed escrow last month at $440K. That home was also a corner lot, but 10 years newer, with new roof and new exterior paint. What would be the increased value of the 300 sq ft, and deducting for the very old cracked shake shingle roofs for #1 – #3?

[Author]

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