Sequestration and the housing market.

[bearishgurl]

[quote=flu][quote=sdduuuude]Actually, my new prediction is – your event horizon will hit the day after I close escrow.[/quote]

add me into the mix on a primary upgrade, and the entire CarmelV will fall into the ocean.[/quote]

flu, you KNOW CarmelV has a ways to go in order to do that ;=)

[paramount]

[quote=toots]

Contractors are either very young renters or have young families that live in places like Temecula, Marietta and Escondido.

I don’t see sequestration having an effect on real estate sales in San Diego.[/quote]

And that’s why Temecula is so much more vibrant than San Diego.

My dad has lived in Point Loma for more than 30 years (near the fresh and easy which used to be lucky’s), and it’s like the walking dead around there.

Inventory levels in Temecula are very low right now, about 70% lower than this time last year (which was already low).

20+ offers on a house in the 250k-300k range not uncommon at all.

Most of my co-workers live in San Diego,a few of us live up in Temecula and beyond. On the other hand, most of my co-workers who do live in Temecula do you have younger families.

Sounds like I may need an exit strategy.

[bearishgurl]

[quote=paramount][quote=toots]

Contractors are either very young renters or have young families that live in places like Temecula, Marietta and Escondido.

I don’t see sequestration having an effect on real estate sales in San Diego.[/quote]

And that’s why Temecula is so much more vibrant than San Diego.

My dad has lived in Point Loma for more than 30 years (near the fresh and easy which used to be lucky’s), and it’s like the walking dead around there.

Inventory levels in Temecula are very low right now, about 70% lower than this time last year (which was already low).

20+ offers on a house in the 250k-300k range not uncommon at all.

Most of my co-workers live in San Diego, a few of us live up in Temecula and beyond. On the other hand, most of my co-workers who do live in Temecula do you have younger families.

Sounds like I may need an exit strategy.[/quote]

paramount, I’m not sure where your work location is (SD County?). If it is, you and some of your co-workers have made a choice to live far from work and commute.

There was never any need to do so as there are plenty of listings (yes, even SFR’s) in SD County which are under $350K. Some were even that cheap during the “millenium boom!”

I take it from your post that you are originally from Pt Loma? I’m very familiar with your dad’s area.

Why do you think it now looks like the “walking dead” around there? When I go there, I see plenty of strollers and youngish families (not particularly Gen Y), especially at Kellogg Beach, OB and Dog Beach. Perhaps some of those families are only visiting for the day or live in the military housing there.

If you were raised there, you must know that PL is a wonderful community to raise a family in! Besides nearby OB, there’s also plenty of organized recreation there for young kids.

Had you purchased a cosmetic-fixer property there 10-12 years ago (when many were still available), you would have likely had far more equity today than you could ever obtain by buying properties in Temecula. PL values were affected very little by the RE crash of 2008 :=]

I always remind myself of these facts but did not have any choice in the matter on where to live at that time :=[

Due to current “low inventory, perhaps you can fetch enough from the sale of your properties in Temecula in 2013/14 to move back down to SD County :=]

[bearishgurl]

[quote=toots] . . . The GS folks are mostly older and/or Navy retirees who got hired on after retirement. They bought their houses when they were affordable.

Contractors are either very young renters or have young families that live in places like Temecula, Marietta and Escondido. . . . [/quote]

Piggs, take a hard look at this “very typical” picture of longtime SD workers.

The GS “boomer” workers (a good portion no doubt current and future “double dippers”) are still working into their sixties and still contributing to FERS and their TSP’s.

Why? To keep OASDI “afloat,” the SSA is trying to convince them (if they’re “healthy”) to delay SS “retirement” until age 70 (for a MUCH higher monthly annuity) but of course, if they do so, they take the chance they will die in the interim and not collect a penny of it :=0

See: http://finance.yahoo.com/news/wondering-when-to-take-social-security–145428605.html

This doesn’t bode well for Gen X Federal workers’ upward mobility in the General Service and Wage Grade trades.

Younger Gen X and Gen Y have been working as “contractors” because as boomers and beyond retired, their positions were likely never filled.

“Contractors” don’t work for the government directly so don’t have a defined benefit pension.

SPAWARS and the old NOSC buildings (foot of Rosecrans) are a l-o-o-o-ng commute from TV. There are MANY areas of SD, East and South County which were and are just as affordable as TV but are located 8-20 miles of these installations. Listings abound in ALL of them.

These SD Federal contract-workers are making their daily lives hell as well as racking up their gasoline bills and auto maintenance/repair expense by commuting over 100 miles per day.

It’s ridiculous and never needed to happen. These SD workers did it to themselves.

Meanwhile, their “boomer” co-workers are living 0-20 miles away in houses most of them likely owned for decades.

It doesn’t matter what they paid for them. I can assure you that these workers were paid MUCH LESS when they first bought them with mortgages at MUCH HIGHER interest rates than today! It’s ALL relative. All you need to do is carefully take notice that they’re NOT MOVING and ask yourselves why a 55-yo 1550 sf house with a knotty-pine kitchen on a 5000 sf lot in Serra Mesa was good enough for THEM to raise their families in and also good enough for THEM to retire in but NOT good enough for later Gen X and Gen Y to do same.

Values and expectations have changed so much that today’s younger family-raising cohort wouldn’t be caught dead making offers in the same “middle-class” SD neighborhoods that their coworkers senior to them have lived in for decades. They want *newer* and *larger* straight out of the gate. So much so, that one or both parents in a household will drive 100++ miles round trip to work every day.

Hard to believe, but true. I believe this phenomenon of very high expectations among young parents is a direct cause of the “sequestration” we’re seeing in coastal CA counties. They’re doing it to themselves because they have so much “choice” and many are now “transplants” and don’t have any local family to advise them when they are about to make a big mistake (such as buying a primary home out-of-county when your job(s) are located in SD) :=0

[flyer]

Not that it would really effect me, but glad to hear from the professionals that sequestration will, most likely, not become an issue that will negatively effect the housing market in San Diego.

BG, you make some very good points, and it’s always interesting how almost every thread becomes a “Battle of the Neighborhoods.” We all have neighborhoods we “wouldn’t be caught dead in,” but that’s not good or bad, it’s just preferences.

For example, one of our preferences is not being more than 10 minutes or so from the ocean–and that factors into where we chose to live in RSF.

If people are overextending themselves to keep up with their peers, or for any other reason–that’s another story. I just hope they can take care of themselves and their families if it all hits the fan–that would be my only REAL concern.

[bearishgurl]

[quote=flyer]Not that it would really effect me, but glad to hear from the professionals that sequestration will, most likely, not become an issue that will negatively effect the housing market in San Diego.

BG, you make some very good points, and it’s always interesting how almost every thread becomes a “Battle of the Neighborhoods.” We all have neighborhoods we “wouldn’t be caught dead in,” but that’s not good or bad, it’s just preferences.

For example, one of our preferences is not being more than 10 minutes or so from the ocean–and that factors into where we chose to live in RSF.

If people are overextending themselves to keep up with their peers, or for any other reason–that’s another story. I just hope they can take care of themselves and their families if it all hits the fan–that would be my only REAL concern.[/quote]

flyer, I’m not really partial to any ONE area or “neighborhood” in SD. I was just trying to make a point that previous generations of workers purchased their homes in SD, stayed long-term and became part of their communities while a very LARGE percentage of newer generations of workers fled … some as far as they could and still get to work within ~90(+) minutes or so.

There was never any reason to flee urban or suburban SD to purchase a home (if that is where one works) and there isn’t now.

As I previously stated, the wholesale “fleeing” while shunning available properties in numerous close-in zip codes in SD County is what is causing the “sequestration,” IMHO.

Meanwhile, many are “whining” about “lack of inventory.”

Many of those same “whiners” could live closer to their jobs and have MUCH more inventory to choose from.

But the majority don’t WANT to. They want to shop further away from work, and, in doing so, make their own beds when they find themselves “freeway-dependent” twice every weekday in a long line of like-minded people :=)

I agree with you regarding homeowners (possibly inadvertently) “overextending themselves,” especially those with minor children still at home. This often happens when the home they chose has high monthly HOA dues PLUS high Mello-Roos to pay (on top of PITI). The monthly carrying costs eventually become too high with all the rest of the family needs. For some, this occurs MUCH SOONER than later.

Again, this is a byproduct of “fleeing” the urban cores and close-in communities and suburbs in favor or distant suburbia, exurbia or out-of-county.

I also agree that even though the younger generations in “family-raising-mode” fleeing the cities and close-in communities causes “sequestration,” this phenomenon, in and of itself, is not likely to affect the housing market in CA coastal counties.

This is due to PLENTY of buyers of every stripe from everywhere (a good portion with ALL CASH) who have no reservations at all about buying properties in SD’s close-in areas, whether for a personal residence or rental investment :=]

[spdrun]

But some of the close-in areas (read: downtown) seem to also have annoyingly high charges on condos. 400-500/mo carrying charges alone on a smallish one-bedroom may fly in NYC (where heat, hot water, and possibly electricity are included), but not so much in SD.

[bearishgurl]

[quote=spdrun]But some of the close-in areas (read: downtown) seem to also have annoyingly high charges on condos. 400-500/mo carrying charges alone on a smallish one-bedroom may fly in NYC (where heat, hot water, and possibly electricity are included), but not so much in SD.[/quote]

I agree, spdrun. I wasn’t advocating that young parents should move their children into these (mostly high-rise) condos. I was speaking of SFR’s in the various close-in urban “communities” of SD and close-in suburbs of east and south county. Many of these properties have much bigger lots than those in exurbia and the very established ones in metro SD (south of I-8) and south county are NOT freeway dependent to the urban core. Even the “north city” communities of SD (from MM down to I-8) are close to many industrial and office parks without having to use a freeway.

[paramount]

BG: I agree (and appreciate) with your comments, but also understand the Temecula proposition. In my case I work about 35-40 minutes from work (Tem to RB), and I rationalize that by so cal standards that’s not a horrible commute.

But in Temecula you get good schools, affordable real estate (basically texas prices 20 miles from the coast), decent AQ, low crime and newer houses – that’s the reward for the commute.

Before I bought my current house, I looked hard in RB, San Marcos and SEH. In my price range (rent or buy) we were looking at 1500 sq ft, we barely fit in our new 2400 sq ft house…

On top of that, the commute from San Marcos or SEH to RB is not that much better than from Temecula.

Having said all of that, I have been seriously considering selling this summer into a strong market and moving closer to work.

[patb]

http://www.washingtonpost.com/business/capitalbusiness/contractors-readying-for-more-cuts-to-workforce-facilities/2013/02/01/e48802e4-6a5d-11e2-95b3-272d604a10a3_story.html?hpid=z3

[Coronita]

“What sequester?”

http://finance.yahoo.com/news/obama-seeks-avoid-sequester-short-161751334.html

come on, did you really think we would go on real austerity???

So… no sequester, no impact on housing market…lol…

Yeah, I know…Kicking the can down the road can only go so far….True… But we’ve started kicking the can on I-5 starting down here in San Diego…It’s a long way to go all the way to along the west coast before we hit canada…Especially if we’re kicking the can a few feet each time…. See you in the next lifetime…..

[SK in CV]

[quote=flu]”What sequester?”

http://finance.yahoo.com/news/obama-seeks-avoid-sequester-short-161751334.html

come on, did you really think we would go on real austerity???

[/quote]

Do you think that austerity would be any benefit to the economy???

[Coronita]

[quote=SK in CV][quote=flu]”What sequester?”

http://finance.yahoo.com/news/obama-seeks-avoid-sequester-short-161751334.html

come on, did you really think we would go on real austerity???

[/quote]

Do you think that austerity would be any benefit to the economy???[/quote]

That wasn’t my point of the post. I was responding to “will sequestoring impact the housing market”…

My answer is

(1) no, even if it did happen.

and now

(2) and no, since it’s unlikely that it can impact the housing market it it never happens…

Besides, I think you misunderstood me.

I’m totally flip-flopped on this spend spend spend gravy train now… i get it… As long as my assets are rising ahead along with this spending, I don’t care… If things blow up in the future, it’s not my concern anyway, since chances are by then, I’m already dead when it happens.

I manage my money much better than other people, and it’s always easier to make more money if everyone else is in the spending mood and I don’t spend versus if no one is in the spending mood. I need people to buy those fancy smartphones, tablets, pay for higher rent, etc.. I won’t be wasting my money, but I sure as well welcome other people to do it…And the more they do, the less money they will have available to buy more meaningful things like investment property…So, please, I hope more people spend away. I need more people to be permanent renters because they can’t afford to live in their own homes.

Meanwhile, I love buying the cheapest thing on the markets these days… Made overseas of course…

[Coronita]

[quote=paramount][quote=toots]

Contractors are either very young renters or have young families that live in places like Temecula, Marietta and Escondido.

I don’t see sequestration having an effect on real estate sales in San Diego.[/quote]

And that’s why Temecula is so much more vibrant than San Diego.

My dad has lived in Point Loma for more than 30 years (near the fresh and easy which used to be lucky’s), and it’s like the walking dead around there.

Inventory levels in Temecula are very low right now, about 70% lower than this time last year (which was already low).

20+ offers on a house in the 250k-300k range not uncommon at all.

Most of my co-workers live in San Diego,a few of us live up in Temecula and beyond. On the other hand, most of my co-workers who do live in Temecula do you have younger families.

Sounds like I may need an exit strategy.[/quote]

Don’t mess with your primary home… Unless of course you already have another one that is your primary or gonna be your primary….Look at all the people who don’t have a primary, waited for the longest time for the “magical bottom”, watched it whiz right by…. A primary (reasonably purchased) even if not idea imho still is better than no primary…

Same sort of people that are gonna self-convince themselves everything is a “bad idea” and watch things whiz right by there too…Like bonds a few years ago (the bond scare).. Like the stock market (the equity implosion scare)… Like metals… Like oil/gas (remember all that nonsense about talking about hitting “peak oil”)….

[Author]

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