Under $400,000 market

[recordsclerk]

Not much available under $400k in BG’s area. My friend is having a hard time buying anything with 4 bedrooms under $400K. PUSD is not the only place you can’t buy under $400K. Sure you can by a smaller fixer, but anything with 4 bedrooms over 1700sqft is getting harder to find under $400K.

[bearishgurl]

[quote=recordsclerk]I wouldn’t sell anything right now. I wouldn’t sell anything for at least a couple years.[/quote]

Time will tell but I think you’re probably right, recordsclerk.

[bearishgurl]

[quote=recordsclerk]Not much available under $400k in BG’s area. My friend is having a hard time buying anything with 4 bedrooms under $400K. PUSD is not the only place you can’t buy under $400K. Sure you can by a smaller fixer, but anything with 4 bedrooms over 1700sqft is getting harder to find under $400K.[/quote]

I’m seeing this also in 65+ yo subdivisions, recordsclerk.

I’ve even seen smaller local (recently flipped) previous longtime rental houses recently close at ~$400K.

After all the artificial devaluation in recent years, even clear back to ’99 prices (non-arms-length SS’s), it is now especially heartening to see our values finally nearly approach 2004 prices 🙂

I understand the same is happening in the older, established areas of East County.

It’s time again to focus on home and property improvements!

[SD Realtor]

Desmond that is my point.

Actually there are places to purchase SFRs at or under 400k but they are not places that are in demand because of several reasons. Any places of note with regards to good school districts and high demand are out of the 400’s and making it through the 500’s fairly quickly as well.

[bearishgurl]

[quote=SD Realtor]…Any places of note with regards to good school districts and high demand are out of the 400’s and making it through the 500’s fairly quickly as well.[/quote]

SDR, what do you consider to be the criteria for a “good school district?” Is an elementary school district with several schools having current API’s in the 900’s considered “good” to you? How about a HS District? Are several MS/HS’s in a district with 830+ API scores considered “good” to you? And, of course, you must realize that urban SD has several elem, middle and high schools with the these current API scores … and above, right?

This is taking into consideration that you yourself have stated that you are a property owner in urban SD and all.

I haven’t actually checked myself, but recordsclerk is claiming that 4 br SFR’s (family-sized homes) are selling for more than $400K in central Chula Vista and are apparently now in short supply. What, if anything, does that tell you about family demand for these homes?

In other words, do you think homebuyers with school-aged children in Chula Vista, urban SD or East County have lesser expectations for school performance than those buyers in the PUSD or the similarly-situated I-15 corridor??

Just wondering . . . .

[kev374]

This sounds EXACTLY like a Ponzi scheme reminiscent of the last big bubble and crash. In the last bubble the actors were average Joe’s, in this bubble the actors are investors. In either case there will be a spectacular crash in 2-3 years. Will the taxpayers be picking up the pieces? Who knows.

[bearishgurl]

[quote=kev374]This sounds EXACTLY like a Ponzi scheme reminiscent of the last big bubble and crash. In the last bubble the actors were average Joe’s, in this bubble the actors are investors. In either case there will be a spectacular crash in 2-3 years. Will the taxpayers be picking up the pieces? Who knows.[/quote]

Sorry, kev, but I don’t agree. The last big bubble’s bad actors bought property with “funny money” and had little to no skin in the game.

IF there is a RE bubble in the coming years with “investor actors,” it can’t crash. WHY? If one pays cash, how can they “crash?” A “cash buyer” doesn’t HAVE to sell unless it suits them. If values should decline again, these “investor-actors” will just continue to hold and rent these many thousands of properties out, which is 75% of the reason they are being bought up today. Meanwhile their REIT investors will have nice monthly or quarterly returns on their “investments.” :=]

Your definition and my definition of a “bubble” are likely very different. In many parts of SD County, the residential RE market over-corrected in the last bust, causing many good, improved properties to sell at (or less) than land value. The fundamentals had run amok, due to too many lazy lenders waiting too long to foreclose or accept a short pay. These lazy lenders ended up falling down on their appraisals and taking anything they could get while letting their defaulting trustors squat indefinitely. This was bad for ALL owners and had the impact of severely reducing the values of the majority of thousands of longtime owners who were never in distress.

[earlyretirement]

[quote=bearishgurl][quote=all] . . . it’s all right.[/quote]

Actually, it isn’t “all right” now and is going to be less “all right” later for property owners within the PUSD.

If I owned any kind of property at all within the PUSD, whether residential, multifamily or commercial, I would be listing it for sale NOW, in hopes I could unload it before the SHTF.

This intractable problem can only get uglier as time marches on.

But far be it from me to attempt to burst the fantasy bubble you seem to be living under …[/quote]

Actually I disagree with you BG. Don’t get me wrong. I TOTALLY agree with you that the PUSD was careless and reckless to do those Capital Appreciation bonds. None of those people should ever hold public office again!

Yes, it WILL cost PUSD homeowners in the far future which is unfortunate. However, taking a closer look at the numbers, you’re not talking about huge amounts of money for the typical owner. I think I read somewhere the average homeowner would pay less than $600 to $700 more per year. Maybe I’m wrong on the exact amount so correct me there if I’m wrong. And even homeowners like me that have $1+ million valued houses will probably pay less than $1,800 per year when it’s all said and done.

The wildcard factor will be if the PUSD remains an excellent school district. Because if it does, then parents will gladly continue to pay the higher tax rates to live in the area. (Heck, even without kids, I’d pay the higher tax rates to live in the area I do…it’s amazing).

I bought where we did in large part to being in the PUSD and I don’t regret living here for a second. In fact, we love love love the area. Mello Roos wasn’t fun but even on those we have pre-paid off. I find it totally worth it to pay the taxes and live in the area and send our kids to the schools here.

It’s not like you’re not getting something for the high taxes we pay. So it all will depend on how viable the PUSD stays in the future, IMHO.

BG, just out of curiosity, why are you so down on this area? I haven’t been around too long on this board but even before I bought it seems like you always looked poorly on much of North County. Is there some personal bias against it?

I don’t think anyone can argue against all the positives of the area/school districts but you seem to be down on it quite a bit so I was just curious about that. You seem to prefer/push Chula Vista. I don’t know much about Chula Vista other than the fact that I’d never have any interest/desire to live there. I know many other like minded families that probably have the same opinion.

But is your preference and comments just based on the fact you live there, it’s more expensive here, and the taxes are lower there? I was just curious about that part.

[all]

WRT PUSD bond – the bond is issued because non-MR areas wanted MR-level schools. It was voted for and it is supposed to be paid for by people who do not live in mello-roos areas. Of course the things can get complicated, but it still makes more sense than federal taxpayers paying $180K to elevate a house in Norfolk, VA.

[livinincali]

[quote=bearishgurl]
IF there is a RE bubble in the coming years with “investor actors,” it can’t crash. WHY? If one pays cash, how can they “crash?” A “cash buyer” doesn’t HAVE to sell unless it suits them. If values should decline again, these “investor-actors” will just continue to hold and rent these many thousands of properties out, which is 75% of the reason they are being bought up today. Meanwhile their REIT investors will have nice monthly or quarterly returns on their “investments.” :=]
[/quote]

I don’t think we’re in a bubble with regards to real estate, but I’d be willing to bet a lot of that hedge fund investor cash is really some kind of leverage debt. That’s what hedge funds do, they leverage investment dollars in order to produce better returns. Some investor in real estate is bound to over leverage them self and get in trouble. It always happens. The only question will be are they big enough to have an impact or not. In San Diego maybe not, Las Vegas or Phoenix it certainly seems possible.

The thing to worry about is when these investors decide to exit. They are going to liquidate quickly and there isn’t going to be any emotional attachment. They aren’t going to care if their bulk selling drive prices down in your hood. They just care if they can get their investment out and into something else that looks more appealing. They’ll even take a loss if it means they can chase the next hot money investment.

It’s going to suck if you have to compete with them when you want to sell.

[earlyretirement]

[quote=livinincali][quote=bearishgurl]
IF there is a RE bubble in the coming years with “investor actors,” it can’t crash. WHY? If one pays cash, how can they “crash?” A “cash buyer” doesn’t HAVE to sell unless it suits them. If values should decline again, these “investor-actors” will just continue to hold and rent these many thousands of properties out, which is 75% of the reason they are being bought up today. Meanwhile their REIT investors will have nice monthly or quarterly returns on their “investments.” :=]
[/quote]

I don’t think we’re in a bubble with regards to real estate, but I’d be willing to bet a lot of that hedge fund investor cash is really some kind of leverage debt. That’s what hedge funds do, they leverage investment dollars in order to produce better returns. Some investor in real estate is bound to over leverage them self and get in trouble. It always happens. The only question will be are they big enough to have an impact or not. In San Diego maybe not, Las Vegas or Phoenix it certainly seems possible.

The thing to worry about is when these investors decide to exit. They are going to liquidate quickly and there isn’t going to be any emotional attachment. They aren’t going to care if their bulk selling drive prices down in your hood. They just care if they can get their investment out and into something else that looks more appealing. They’ll even take a loss if it means they can chase the next hot money investment.

It’s going to suck if you have to compete with them when you want to sell.[/quote]

I wouldn’t worry too much about these “hedge fund investors”. Most of the hedge funds I’ve invested in have had minimum accredited net worth levels of $1 to $2 million+ (besides your primary home).

What is going on this go around is much different vs. the last bubble when banks/lenders were giving anyone with a heartbeat a loan to buy/refinance.

The last go around I personally knew many people that were buying multiple houses with the banks money. This time around, I know many people that are buying multiple properties with their OWN money (many of them paying cash).

Last time many people were buying to flip. This time many people are buying and holding for cash flow via rentals. I’m certainly not saying the market won’t/can’t go down again. Because things move in cycles and it certainly can. But people shouldn’t confuse what happened then vs. what is going on now.

[no_such_reality]

[quote=Happs]I was reading this article about investors buying houses and turning them into rentals and the second paragraph about the great number of houses under $400,000 in Orange County purchases by investors was startling. Do regular upper middle class workers not have the savings to be able to qualify for a mortgage on a $400,000 house? [/quote]

Regular upper income people don’t want a $400K house, they want a $800K house and a BMW on the driveway.

[Author]

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