Why is San Diego real estate still so expensive?

[an]

Again permabear, what’s your definition of small? Now that you specified the desired zip code, I’m even more skeptical as to your statement of not able to find good big houses for 800k-1M. My definitely of big = 3000+ sq-ft. Here are some examples:

Stonebridge:
http://www.sdlookup.com/MLS-100056104-11558_Carowind_Ct_San_Diego_CA_92131
http://www.sdlookup.com/MLS-100060663-11613_Sweet_Willow_Way_San_Diego_CA_92131
http://www.sdlookup.com/MLS-100051901-14661_Old_Creek_Dr_San_Diego_CA_92131
http://www.sdlookup.com/MLS-100066812-11602_Sweet_Willow_Way_San_Diego_CA_92131

South Pomorado in SR:
http://www.sdlookup.com/MLS-100061046-12280_Semillon_Blvd_San_Diego_CA_92131
http://www.sdlookup.com/MLS-100064371-12255_Spruce_Grove_Pl_San_Diego_CA_92131

92127 doesn’t really have a lot of houses in the 800k-1M range. There are plenty <$800k and plenty > $1M. Are you expecting those $1.4M houses now to drop to $1M? If you are, then that would put these houses at around 2000 nominal prices. Example would be http://www.sdlookup.com/MLS-100068741-16979_Going_My_Way_San_Diego_CA_92127 sold at $1.24M in late 2003 new (assuming price does not include landscaping).

92129 doesn’t really have a lot of houses > $800k. There are some pockets of large houses going for $800k+ but that’s a small portion of 92129.

92064:
http://www.sdlookup.com/MLS-100064351-16224_Orchard_Bend_Rd_Poway_CA_92064 (This property came up before, now listing for $899k for 5800 sq-ft on 1.5 acre). Are you expecting this type of property in 92129/92127/92131?
http://www.sdlookup.com/MLS-100051015-15535_Eastvale_Rd_Poway_CA_92064
http://www.sdlookup.com/MLS-100058553-12256_Berea_Ct_Poway_CA_92064

The bigger question is, how many people looking in the 800k-1M range are looking for 4000+ sq-ft houses? I personally rather get a 2000 sq-ft house in Delmar than 4000 sq-ft in SR. The supply for 4000+ sq-ft houses is not that big and majority of them are geared toward much higher end buyers than those making $200k and don’t have a lot of down payment. Maybe you have tastes of $1.5M+ houses but your budget is only $800k-$1M, that’s why you’re not seeing that many houses that fit the bill.

[paramount]

For whatever one may think of San Diego and how far a 200k salary will go, at least we know the Chargers are done for the year.

How’s that for a data point?

[paramount]

For whatever one may think of San Diego and how far a 200k salary will go, at least we know the Chargers are done for the year.

How’s that for a data point?

[paramount]

For whatever one may think of San Diego and how far a 200k salary will go, at least we know the Chargers are done for the year.

How’s that for a data point?

[paramount]

For whatever one may think of San Diego and how far a 200k salary will go, at least we know the Chargers are done for the year.

How’s that for a data point?

[paramount]

For whatever one may think of San Diego and how far a 200k salary will go, at least we know the Chargers are done for the year.

How’s that for a data point?

[CA renter]

[quote=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…[/quote]

While I understand the point behind this argument, it assumes that landlords on the lower end should be running monthly losses on their “investments.” The renters’ wages/income have to cover the costs of the landlords’ purchases, or else there wouldn’t be any rentals. Yes, many of these rentals were purchased years ago when the market was “normal,” but you can’t really argue that renters don’t play a part in the market.

The wealth and/or incomes of all the people who rent in an area do indeed determine market rents, which are a large part of what determines market price in that segment.

[CA renter]

[quote=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…[/quote]

While I understand the point behind this argument, it assumes that landlords on the lower end should be running monthly losses on their “investments.” The renters’ wages/income have to cover the costs of the landlords’ purchases, or else there wouldn’t be any rentals. Yes, many of these rentals were purchased years ago when the market was “normal,” but you can’t really argue that renters don’t play a part in the market.

The wealth and/or incomes of all the people who rent in an area do indeed determine market rents, which are a large part of what determines market price in that segment.

[CA renter]

[quote=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…[/quote]

While I understand the point behind this argument, it assumes that landlords on the lower end should be running monthly losses on their “investments.” The renters’ wages/income have to cover the costs of the landlords’ purchases, or else there wouldn’t be any rentals. Yes, many of these rentals were purchased years ago when the market was “normal,” but you can’t really argue that renters don’t play a part in the market.

The wealth and/or incomes of all the people who rent in an area do indeed determine market rents, which are a large part of what determines market price in that segment.

[CA renter]

[quote=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…[/quote]

While I understand the point behind this argument, it assumes that landlords on the lower end should be running monthly losses on their “investments.” The renters’ wages/income have to cover the costs of the landlords’ purchases, or else there wouldn’t be any rentals. Yes, many of these rentals were purchased years ago when the market was “normal,” but you can’t really argue that renters don’t play a part in the market.

The wealth and/or incomes of all the people who rent in an area do indeed determine market rents, which are a large part of what determines market price in that segment.

[CA renter]

[quote=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…[/quote]

While I understand the point behind this argument, it assumes that landlords on the lower end should be running monthly losses on their “investments.” The renters’ wages/income have to cover the costs of the landlords’ purchases, or else there wouldn’t be any rentals. Yes, many of these rentals were purchased years ago when the market was “normal,” but you can’t really argue that renters don’t play a part in the market.

The wealth and/or incomes of all the people who rent in an area do indeed determine market rents, which are a large part of what determines market price in that segment.

[sdrealtor]

One word….APARTMENTS

[sdrealtor]

One word….APARTMENTS

[sdrealtor]

One word….APARTMENTS

[sdrealtor]

One word….APARTMENTS

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