Why is San Diego real estate still so expensive?

[temeculaguy]

Tax credits do not explain the differences in prices between two places that both benefit from the same tax break. In fact, the higher end San Diego areas were ineligible for the tax credit because of income restrictions.

It’s not spin from realtors, look at rich’s graphs, it is now at it’s historical norm. Some San Diego county places have become less affordable because they were “way out” places 10 or 20 years ago but now they are no longer “way out”. I remember when I lived in Tierrasanta and some friends didn’t want to come visit me because I lived in the sticks. I remember Encinitas being considered another time zone, a place you got gas on the way to L.A. They benefited because the population came to them, today’s “way out” place may be tomorrows hot spot. 200k combined income gives you plenty of options, maybe not every house in every town, but probably most houses in most towns. The reason they can’t go buy the best house in the best town is that the other buyers making 200k combined aren’t buying thier first house, they are moving up with the profits from their first house, or they saved a lot over the years.

When something lasts more than 20 years, it’s not because of this or that, it is the norm. I left San Diego 20 years ago because R/E seemed overpriced. I agree that it still seems overpriced, but in those 20 years, through up and down cycles, nothing ever changed much. That makes me think that it wont make any big changes anytime soon.

One other note, if you look at the population of the county and the city in the last 50-60 years, the area outside of city limits has seen the most growth. It lends more validity to the “way out there” theory.

1950 city 333k county 556k
1960 city 573k county 1 mil
1970 city 700k county 1.35 mil
1980 city 875k county 1.8 mil
1990 city 1.1mil county 2.5 mil
2000 city 1.2mil county 2.8 mil
2009 city 1.4mil county 3.2 mil

The city’s population grew 4x in that span but the area outside city limits grew 6x. In 1950 2/3 of the population lived inside the city, now it’s far less than half, it wasn’t until 1980 that the tipping point was reached when more people lived outside the city than inside it. In 1980, highway 15 had stop signs. This explains somewhat why many people have memories of plumbers and teachers buying nice places in Poway or Carlsbad during their childhood, because in 1960, there were only 427k people dividing up everything outside of the city limits. Today there are 1.8 million people dividing it up. That is a market force. If the county population ever hits 6 million, 30 years from now, people will wonder why Santee got so expensive. Actually since they built the 52, that started to happen already. Tell your friends to take their 200k and buy a place that they feel is in the path of progress. 200k does not make the world your oyster, you still have to plan a little, but it can be done.

[KCTxr]

Sounds like this can be a thread where I don’t need data, but a “feels like” would work. That’s good, cause I don’t have the numbers or the time to get the numbers. Plus, if I thought I had numbers, they would be ripped apart.

Feels like….
1. Most everybody I know is busting their behind to stay even. This is different than the perception from other parts of the country about California.
2. I have friends that do very well, but are doing #1. Some are unemployed and barely hanging on, but still doing #1.
3. Prices go up easy, but sticky coming down (probably a quote from this and many other sites over the last few years).
4. Lots of retired friends here, who stay at home alot. Some have worked and saved their entire lives to not have to live in -10F winters. Yep, Mom wants to come out. She can live with us.
5. I wonder if there are fewer dining establishments per capita in SoCal than in KC. We always could eat out in KC, hardly ever here. KC has great BBQ, in smoked meat, sauce and smoker competitions which are a blast.
6. Apples to apples median home prices/quality/amount between here and other parts of the country are not equal.
7. I hate to say it, but dang, I think we are land restricted. A $30K, 1 acre lot in KC is what, $500K here?
8. California is cyclical from kind of expensive to really expensive.
9. There is a diversity of jobs and careers here. I would like to see adding industrial/chemical/food processing, but not at the expense of sliding too much, or at all, on the environmental side. Wife picked up a contract position in pharma. Now there are other listings, but mostly contract. Maybe we are not that far away from transitioning to net full hires and not so much contract? Hope so. That pulls all positions/industry up. Still not enough for everyone, but maybe on the way up, at least a little.
10. I have no idea how that house down the street was purchased for $890 by a nice young family with an SUV and BMW.
11. The market reflects the actions of a small percentage of the population. Homes go on and off all the time, but are generally the homes with relatively high list price. Well prices, value homes do not last long. When a home at a higher price point is sold, it becomes the benchmark. That is just the way it is. I am happy for all parties in that last sale and wish it was us doing the purchase, but then not really. Need to keep the focus on long term finances, health, family, friends and faith.

Yes, just “feels like”…over the last 5.5 years.

[KCTxr]

Sounds like this can be a thread where I don’t need data, but a “feels like” would work. That’s good, cause I don’t have the numbers or the time to get the numbers. Plus, if I thought I had numbers, they would be ripped apart.

Feels like….
1. Most everybody I know is busting their behind to stay even. This is different than the perception from other parts of the country about California.
2. I have friends that do very well, but are doing #1. Some are unemployed and barely hanging on, but still doing #1.
3. Prices go up easy, but sticky coming down (probably a quote from this and many other sites over the last few years).
4. Lots of retired friends here, who stay at home alot. Some have worked and saved their entire lives to not have to live in -10F winters. Yep, Mom wants to come out. She can live with us.
5. I wonder if there are fewer dining establishments per capita in SoCal than in KC. We always could eat out in KC, hardly ever here. KC has great BBQ, in smoked meat, sauce and smoker competitions which are a blast.
6. Apples to apples median home prices/quality/amount between here and other parts of the country are not equal.
7. I hate to say it, but dang, I think we are land restricted. A $30K, 1 acre lot in KC is what, $500K here?
8. California is cyclical from kind of expensive to really expensive.
9. There is a diversity of jobs and careers here. I would like to see adding industrial/chemical/food processing, but not at the expense of sliding too much, or at all, on the environmental side. Wife picked up a contract position in pharma. Now there are other listings, but mostly contract. Maybe we are not that far away from transitioning to net full hires and not so much contract? Hope so. That pulls all positions/industry up. Still not enough for everyone, but maybe on the way up, at least a little.
10. I have no idea how that house down the street was purchased for $890 by a nice young family with an SUV and BMW.
11. The market reflects the actions of a small percentage of the population. Homes go on and off all the time, but are generally the homes with relatively high list price. Well prices, value homes do not last long. When a home at a higher price point is sold, it becomes the benchmark. That is just the way it is. I am happy for all parties in that last sale and wish it was us doing the purchase, but then not really. Need to keep the focus on long term finances, health, family, friends and faith.

Yes, just “feels like”…over the last 5.5 years.

[KCTxr]

Sounds like this can be a thread where I don’t need data, but a “feels like” would work. That’s good, cause I don’t have the numbers or the time to get the numbers. Plus, if I thought I had numbers, they would be ripped apart.

Feels like….
1. Most everybody I know is busting their behind to stay even. This is different than the perception from other parts of the country about California.
2. I have friends that do very well, but are doing #1. Some are unemployed and barely hanging on, but still doing #1.
3. Prices go up easy, but sticky coming down (probably a quote from this and many other sites over the last few years).
4. Lots of retired friends here, who stay at home alot. Some have worked and saved their entire lives to not have to live in -10F winters. Yep, Mom wants to come out. She can live with us.
5. I wonder if there are fewer dining establishments per capita in SoCal than in KC. We always could eat out in KC, hardly ever here. KC has great BBQ, in smoked meat, sauce and smoker competitions which are a blast.
6. Apples to apples median home prices/quality/amount between here and other parts of the country are not equal.
7. I hate to say it, but dang, I think we are land restricted. A $30K, 1 acre lot in KC is what, $500K here?
8. California is cyclical from kind of expensive to really expensive.
9. There is a diversity of jobs and careers here. I would like to see adding industrial/chemical/food processing, but not at the expense of sliding too much, or at all, on the environmental side. Wife picked up a contract position in pharma. Now there are other listings, but mostly contract. Maybe we are not that far away from transitioning to net full hires and not so much contract? Hope so. That pulls all positions/industry up. Still not enough for everyone, but maybe on the way up, at least a little.
10. I have no idea how that house down the street was purchased for $890 by a nice young family with an SUV and BMW.
11. The market reflects the actions of a small percentage of the population. Homes go on and off all the time, but are generally the homes with relatively high list price. Well prices, value homes do not last long. When a home at a higher price point is sold, it becomes the benchmark. That is just the way it is. I am happy for all parties in that last sale and wish it was us doing the purchase, but then not really. Need to keep the focus on long term finances, health, family, friends and faith.

Yes, just “feels like”…over the last 5.5 years.

[KCTxr]

Sounds like this can be a thread where I don’t need data, but a “feels like” would work. That’s good, cause I don’t have the numbers or the time to get the numbers. Plus, if I thought I had numbers, they would be ripped apart.

Feels like….
1. Most everybody I know is busting their behind to stay even. This is different than the perception from other parts of the country about California.
2. I have friends that do very well, but are doing #1. Some are unemployed and barely hanging on, but still doing #1.
3. Prices go up easy, but sticky coming down (probably a quote from this and many other sites over the last few years).
4. Lots of retired friends here, who stay at home alot. Some have worked and saved their entire lives to not have to live in -10F winters. Yep, Mom wants to come out. She can live with us.
5. I wonder if there are fewer dining establishments per capita in SoCal than in KC. We always could eat out in KC, hardly ever here. KC has great BBQ, in smoked meat, sauce and smoker competitions which are a blast.
6. Apples to apples median home prices/quality/amount between here and other parts of the country are not equal.
7. I hate to say it, but dang, I think we are land restricted. A $30K, 1 acre lot in KC is what, $500K here?
8. California is cyclical from kind of expensive to really expensive.
9. There is a diversity of jobs and careers here. I would like to see adding industrial/chemical/food processing, but not at the expense of sliding too much, or at all, on the environmental side. Wife picked up a contract position in pharma. Now there are other listings, but mostly contract. Maybe we are not that far away from transitioning to net full hires and not so much contract? Hope so. That pulls all positions/industry up. Still not enough for everyone, but maybe on the way up, at least a little.
10. I have no idea how that house down the street was purchased for $890 by a nice young family with an SUV and BMW.
11. The market reflects the actions of a small percentage of the population. Homes go on and off all the time, but are generally the homes with relatively high list price. Well prices, value homes do not last long. When a home at a higher price point is sold, it becomes the benchmark. That is just the way it is. I am happy for all parties in that last sale and wish it was us doing the purchase, but then not really. Need to keep the focus on long term finances, health, family, friends and faith.

Yes, just “feels like”…over the last 5.5 years.

[KCTxr]

Sounds like this can be a thread where I don’t need data, but a “feels like” would work. That’s good, cause I don’t have the numbers or the time to get the numbers. Plus, if I thought I had numbers, they would be ripped apart.

Feels like….
1. Most everybody I know is busting their behind to stay even. This is different than the perception from other parts of the country about California.
2. I have friends that do very well, but are doing #1. Some are unemployed and barely hanging on, but still doing #1.
3. Prices go up easy, but sticky coming down (probably a quote from this and many other sites over the last few years).
4. Lots of retired friends here, who stay at home alot. Some have worked and saved their entire lives to not have to live in -10F winters. Yep, Mom wants to come out. She can live with us.
5. I wonder if there are fewer dining establishments per capita in SoCal than in KC. We always could eat out in KC, hardly ever here. KC has great BBQ, in smoked meat, sauce and smoker competitions which are a blast.
6. Apples to apples median home prices/quality/amount between here and other parts of the country are not equal.
7. I hate to say it, but dang, I think we are land restricted. A $30K, 1 acre lot in KC is what, $500K here?
8. California is cyclical from kind of expensive to really expensive.
9. There is a diversity of jobs and careers here. I would like to see adding industrial/chemical/food processing, but not at the expense of sliding too much, or at all, on the environmental side. Wife picked up a contract position in pharma. Now there are other listings, but mostly contract. Maybe we are not that far away from transitioning to net full hires and not so much contract? Hope so. That pulls all positions/industry up. Still not enough for everyone, but maybe on the way up, at least a little.
10. I have no idea how that house down the street was purchased for $890 by a nice young family with an SUV and BMW.
11. The market reflects the actions of a small percentage of the population. Homes go on and off all the time, but are generally the homes with relatively high list price. Well prices, value homes do not last long. When a home at a higher price point is sold, it becomes the benchmark. That is just the way it is. I am happy for all parties in that last sale and wish it was us doing the purchase, but then not really. Need to keep the focus on long term finances, health, family, friends and faith.

Yes, just “feels like”…over the last 5.5 years.

[sdrealtor]

Permabear,
Time to clear up a simple misonception again which is based on statisitics. You said “If you’re making 200k, you’re in the top 5% of earners for any of those areas. That means you should be able to afford the top 5% of homes.”

That simply doesnt compute. Home ownership rates are roughly 50% and the renters skew to lower incomes. So under normal conditions a buyer with a top 5% income should be able to buy what a top 5% income homewoner (not resident) can. That pull it down close to a top 7 or 8% home. The we hit Prop 13 and the so called “perfect” weather. Homeowners stay in place because of the substantial tax benefit to doing so. Which means a buyer with a top 5% income isnt even competeing with the top 5% of homeowners they are competing with the Top 5% of homebuyers. The you toss in all the buyers out there who have significant cash to put down from prior homes they sold. At the end of the day after you factor in all those things in a so called “glamour city” like SD, someone with a $200K income without a big cash position should be buying around the 20 to 25% of homes.

It is what it is…

[sdrealtor]

Permabear,
Time to clear up a simple misonception again which is based on statisitics. You said “If you’re making 200k, you’re in the top 5% of earners for any of those areas. That means you should be able to afford the top 5% of homes.”

That simply doesnt compute. Home ownership rates are roughly 50% and the renters skew to lower incomes. So under normal conditions a buyer with a top 5% income should be able to buy what a top 5% income homewoner (not resident) can. That pull it down close to a top 7 or 8% home. The we hit Prop 13 and the so called “perfect” weather. Homeowners stay in place because of the substantial tax benefit to doing so. Which means a buyer with a top 5% income isnt even competeing with the top 5% of homeowners they are competing with the Top 5% of homebuyers. The you toss in all the buyers out there who have significant cash to put down from prior homes they sold. At the end of the day after you factor in all those things in a so called “glamour city” like SD, someone with a $200K income without a big cash position should be buying around the 20 to 25% of homes.

It is what it is…

[sdrealtor]

Permabear,
Time to clear up a simple misonception again which is based on statisitics. You said “If you’re making 200k, you’re in the top 5% of earners for any of those areas. That means you should be able to afford the top 5% of homes.”

That simply doesnt compute. Home ownership rates are roughly 50% and the renters skew to lower incomes. So under normal conditions a buyer with a top 5% income should be able to buy what a top 5% income homewoner (not resident) can. That pull it down close to a top 7 or 8% home. The we hit Prop 13 and the so called “perfect” weather. Homeowners stay in place because of the substantial tax benefit to doing so. Which means a buyer with a top 5% income isnt even competeing with the top 5% of homeowners they are competing with the Top 5% of homebuyers. The you toss in all the buyers out there who have significant cash to put down from prior homes they sold. At the end of the day after you factor in all those things in a so called “glamour city” like SD, someone with a $200K income without a big cash position should be buying around the 20 to 25% of homes.

It is what it is…

[sdrealtor]

Permabear,
Time to clear up a simple misonception again which is based on statisitics. You said “If you’re making 200k, you’re in the top 5% of earners for any of those areas. That means you should be able to afford the top 5% of homes.”

That simply doesnt compute. Home ownership rates are roughly 50% and the renters skew to lower incomes. So under normal conditions a buyer with a top 5% income should be able to buy what a top 5% income homewoner (not resident) can. That pull it down close to a top 7 or 8% home. The we hit Prop 13 and the so called “perfect” weather. Homeowners stay in place because of the substantial tax benefit to doing so. Which means a buyer with a top 5% income isnt even competeing with the top 5% of homeowners they are competing with the Top 5% of homebuyers. The you toss in all the buyers out there who have significant cash to put down from prior homes they sold. At the end of the day after you factor in all those things in a so called “glamour city” like SD, someone with a $200K income without a big cash position should be buying around the 20 to 25% of homes.

It is what it is…

[sdrealtor]

Permabear,
Time to clear up a simple misonception again which is based on statisitics. You said “If you’re making 200k, you’re in the top 5% of earners for any of those areas. That means you should be able to afford the top 5% of homes.”

That simply doesnt compute. Home ownership rates are roughly 50% and the renters skew to lower incomes. So under normal conditions a buyer with a top 5% income should be able to buy what a top 5% income homewoner (not resident) can. That pull it down close to a top 7 or 8% home. The we hit Prop 13 and the so called “perfect” weather. Homeowners stay in place because of the substantial tax benefit to doing so. Which means a buyer with a top 5% income isnt even competeing with the top 5% of homeowners they are competing with the Top 5% of homebuyers. The you toss in all the buyers out there who have significant cash to put down from prior homes they sold. At the end of the day after you factor in all those things in a so called “glamour city” like SD, someone with a $200K income without a big cash position should be buying around the 20 to 25% of homes.

It is what it is…

[HomeShopping]

“If you’re making 200k, you’re in the top 5% of earners for any of those areas. That means you should be able to afford the top 5% of homes.”

Permabear, the fallacy of your argument has been exposed. Consider Rancho Santa Fe: average income – $245,631, median home sale price – $2,585,000.

You have neglected to consider the segment of buyers that have substantial downpayments. While the absolute numbers are small, these buyers form a significant percentage of the buyers of homes $1 million and up.

http://en.wikipedia.org/wiki/Rancho_Santa_Fe,_California

[HomeShopping]

“If you’re making 200k, you’re in the top 5% of earners for any of those areas. That means you should be able to afford the top 5% of homes.”

Permabear, the fallacy of your argument has been exposed. Consider Rancho Santa Fe: average income – $245,631, median home sale price – $2,585,000.

You have neglected to consider the segment of buyers that have substantial downpayments. While the absolute numbers are small, these buyers form a significant percentage of the buyers of homes $1 million and up.

http://en.wikipedia.org/wiki/Rancho_Santa_Fe,_California

[HomeShopping]

“If you’re making 200k, you’re in the top 5% of earners for any of those areas. That means you should be able to afford the top 5% of homes.”

Permabear, the fallacy of your argument has been exposed. Consider Rancho Santa Fe: average income – $245,631, median home sale price – $2,585,000.

You have neglected to consider the segment of buyers that have substantial downpayments. While the absolute numbers are small, these buyers form a significant percentage of the buyers of homes $1 million and up.

http://en.wikipedia.org/wiki/Rancho_Santa_Fe,_California

[HomeShopping]

“If you’re making 200k, you’re in the top 5% of earners for any of those areas. That means you should be able to afford the top 5% of homes.”

Permabear, the fallacy of your argument has been exposed. Consider Rancho Santa Fe: average income – $245,631, median home sale price – $2,585,000.

You have neglected to consider the segment of buyers that have substantial downpayments. While the absolute numbers are small, these buyers form a significant percentage of the buyers of homes $1 million and up.

http://en.wikipedia.org/wiki/Rancho_Santa_Fe,_California

[Author]

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