Why isn’t the San Diego house market imploding

[rb_engineer]

From what I heard from people who are from there, prices in bay area are 2X the SD prices. That is, a townhouse in a Mira Mesa type of area is 700K-800K. A single family tract house in CV type of area is 1.5M to 2M.

[Arraya]

That data I’ve looked at in the past i.e median home/median income it’s no more than 20% so more. Think I’ll look that up now…

[Arraya]

That data I’ve looked at in the past i.e median home/median income it’s no more than 20% so more. Think I’ll look that up now…

[PCinSD]

pabloesqobar

I ran across this South Park unit on Craigslist today:

http://sandiego.craigslist.org/rfs/381431887.html

It sold in January, 2004 for $479,000. Then sold August, 2005 for $635,000. Now it’s bank-owned and listed at $499,900. Not sure if that counts as an implosion (except for the poor girl that bought in 2005), but it’s definitely moving in the right direction.

pabloesqobar

[PCinSD]

pabloesqobar

I ran across this South Park unit on Craigslist today:

http://sandiego.craigslist.org/rfs/381431887.html

It sold in January, 2004 for $479,000. Then sold August, 2005 for $635,000. Now it’s bank-owned and listed at $499,900. Not sure if that counts as an implosion (except for the poor girl that bought in 2005), but it’s definitely moving in the right direction.

pabloesqobar

[DaCounselor]

Good thread. Just a couple of random thoughts regarding afforability:

I often see posts on this site regarding affordability issues that seem to focus (implicitly) only on folks who are first-time buyers with no $$ down. I think it’s important to take into account the number of move-up buyers with alot of equity to roll into the new purchase when considering affordability. I think SDR or sdr posted some North County stats many months ago that highlighted this fact. I’m not saying that there aren’t affordability issues, but I do think a fuller perspective is in order on this topic.

As to % of income applied to housing costs, it’s certainly plausible that higher-income households may be able to devote a higher % of take-home income toward housing costs than lesser earners due to economies of scale. This opens up the can of worms on lifestyle expense, etc, of course, but when looking at the raw numbers alone the higher earners are still going to have considerably more excess income to play with.

Anyway, just some random thoughts.

[DaCounselor]

Good thread. Just a couple of random thoughts regarding afforability:

I often see posts on this site regarding affordability issues that seem to focus (implicitly) only on folks who are first-time buyers with no $$ down. I think it’s important to take into account the number of move-up buyers with alot of equity to roll into the new purchase when considering affordability. I think SDR or sdr posted some North County stats many months ago that highlighted this fact. I’m not saying that there aren’t affordability issues, but I do think a fuller perspective is in order on this topic.

As to % of income applied to housing costs, it’s certainly plausible that higher-income households may be able to devote a higher % of take-home income toward housing costs than lesser earners due to economies of scale. This opens up the can of worms on lifestyle expense, etc, of course, but when looking at the raw numbers alone the higher earners are still going to have considerably more excess income to play with.

Anyway, just some random thoughts.

[HLS]

NYC & SF BAY areas don’t have the vacant land that we still have to build on.
In those areas, you either tear down and rebuild OR you build up.
When the dotcom stocks imploded, amazingly the property market didn’t tank in the bay area.
South of San Fran, a 4 bedroom, 3 bath, 2500 Sq Ft, 40 year old home is in excess of $1 million, and the market isn’t soft. You don’t buy in that area with a minimum wage job!

As discussed, the affordability issue around here will be a major factor to the continuing adjustment of what’s correct, and the market should be flat for a good while once it gets to that level, just like the good old days.

I don’t think that you compare this drop with the 1990’s.
The last drop didn’t have the mass amount of exotic loans and 100% financing that now exists.

Even with down payments, people were upside down…There should be multiples of the losses sustained 12 years ago, and that lasted several years.
This “correction” should last longer. Seems that most of us agree on that.

[HLS]

NYC & SF BAY areas don’t have the vacant land that we still have to build on.
In those areas, you either tear down and rebuild OR you build up.
When the dotcom stocks imploded, amazingly the property market didn’t tank in the bay area.
South of San Fran, a 4 bedroom, 3 bath, 2500 Sq Ft, 40 year old home is in excess of $1 million, and the market isn’t soft. You don’t buy in that area with a minimum wage job!

As discussed, the affordability issue around here will be a major factor to the continuing adjustment of what’s correct, and the market should be flat for a good while once it gets to that level, just like the good old days.

I don’t think that you compare this drop with the 1990’s.
The last drop didn’t have the mass amount of exotic loans and 100% financing that now exists.

Even with down payments, people were upside down…There should be multiples of the losses sustained 12 years ago, and that lasted several years.
This “correction” should last longer. Seems that most of us agree on that.

[Bugs]

I’m pretty sure the average foreclosure “victim” who is watching their home resell for $100,000k less than what they paid 2 years ago has a different viewpoint about SD prices than a lot of Piggington regulars.

These prices just about can’t drop 20% in a single year – there aren’t enough transactions closing to establish the benchmarks necessary to create that kind of expectation among the buyers. A 10-12% drop in a single year would be huge when you consider that our sales volumes are dwindling.

Years – not months.

[Bugs]

I’m pretty sure the average foreclosure “victim” who is watching their home resell for $100,000k less than what they paid 2 years ago has a different viewpoint about SD prices than a lot of Piggington regulars.

These prices just about can’t drop 20% in a single year – there aren’t enough transactions closing to establish the benchmarks necessary to create that kind of expectation among the buyers. A 10-12% drop in a single year would be huge when you consider that our sales volumes are dwindling.

Years – not months.

[PerryChase]

Prices did drop big time in Manhattan. Will it happen again? Time will tell.

http://piggington.com/prices_to_drop_in_1_2_in_manhattan

[PerryChase]

Prices did drop big time in Manhattan. Will it happen again? Time will tell.

http://piggington.com/prices_to_drop_in_1_2_in_manhattan

[JJGittes]

Location location. Plenty of areas in SD are getting hammered. Chula Vista, Escondido, San Marcos etc. Even the prime coastal areas (del mar to carlsbad) I believe have pulled back about 5-10% from 2004-2005 tip top highs. Not a crash, but its significant money. Who knows what will happen in the future, but coastal SD county is, imo, a really great place to live, all things considered, if you can afford it.

[JJGittes]

Location location. Plenty of areas in SD are getting hammered. Chula Vista, Escondido, San Marcos etc. Even the prime coastal areas (del mar to carlsbad) I believe have pulled back about 5-10% from 2004-2005 tip top highs. Not a crash, but its significant money. Who knows what will happen in the future, but coastal SD county is, imo, a really great place to live, all things considered, if you can afford it.

[Author]

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