Why will Coronado prices continue to rise or will they?

[eagleeye]

I’ve recently talked to several Coronado realtors and residents and they all say Coronado prices continue to rise despite declining prices in the rest of San Diego. They say prices were up 7% in 2006, is this true? They are all trying to convince me to buy now before prices go even higher. How can this be? I had been thinking about renting with the expectation that prices would decline over the next 3-4 years and I would then enter at a better price point. Opinions?

PD, What are you seeing? I’m only interested in the village. Also what are billy boxes in the 500-900 blocks renting for? They’re trying to get $4000 (down from $4500) for 859 I. That seems ridiculous to me.

Thanks.

[PD]

It looks to me like prices are falling. However, I’m not looking at anything over 1.5M. Perhaps the higher priced properties are rising. With such a wide range of prices (850,000 to 16M), you can’t rely on the median.
MLS 060065973 sold last year for 1,050,000 and was recently listed at 999K. It has gone inactive so I guess it is in escrow.

I’m seeing lots of reductions and only the best priced properties are selling fast. There seems to be a disconnect with some sellers. There are a couple of townhomes in the village that are for sale where the seller bought last year and is trying to break even. They are never going to do it as there are a couple of comparable SF homes for similar prices. It certainly looks to me like some billy boxes have gone from 1,750,000 to about 1,300,000.

I know someone who has had their Cays off-water home for sale off and on for a year. It is never going to sell until they lower their price (they had it in escrow last spring but the buyer couldn’t sell their home).
I think Coronado will be one of the last places to really see a big reduction but I think it is coming. I know you are only interested in the village but Cays home prices affect village prices.

Have these realtors provided all comps to you? I would ask to see them as far back as spring 2005 (there aren’t that many homes). That is the only way to get to the truth. I think they are just putting the hard sell on you because they need to pay the bills.

In the last downturn, even the best areas got hurt. Coronado is no different.

[eagleeye]

Thanks PD. Can you offer any advice regarding my rental questions?

Most of my friends in Coronado are homeowners so they have a vested interest in the market so I don’t think they’re being objective. They say real estate in Coronado is an emotional thing. Buyers will fall in love with a property and pay any price to get it. I know this sounds ridiculous but that seems to be the general mentality of owners there.

[PD]

As for rent, I haven’t really been paying a lot of attention but it seems like they have gone down a little in the last few months (not sure, though). Last summer there was a spike in rental demand as all familes were forced to move out of housing on the N.A.B. This increased rental demand so prices went up a lot. However, the new houses on the N.A.B are coming along quickly and may be ready for people to start moving back this summer. When this happens, all the people who were forced to move out will be able to move back in, probably causing an increase in available properties and a decrease in demand. So I don’t think the spike in rental prices from last summer is sustainable.
Rental prices can’t go up any more as there will just not be enough people willing to pay the price. It was one thing to get 2,400 for housing and pay 2,600 – 2,900. It is quite another to get 2,400 for housing and pay 3,000 – 3,500.

[PD]

As for someone falling in love with a property, you can make that argument for any location. We really like Coronado and would like buy a house and stay. However, even with a good chunk in the bank and great credit, the prices are beyond what is reasonable for us. It doesn’t matter how much I love it, I can’t afford it.
It used to be that an officer family could buy a lower end SF here. I don’t know anyone who can buy now. I have not met an officer family who owns here unless they bought before 2005. Prices have to come down before that pent up demand can be captured. In order for prices to be sustainable, you can’t lose demand to other areas (because of lower relative pricing) and you have to replace the demand by military folks who used buy here.

[LookoutBelow]

I have a friend with two newly built (small weird layout) townhomes and neither of them are rented yet…..He's griping about it constantly. He has lowered the price once already. Theyve been on the marlet for 2-1/2 months now….almost 3,000 per month, the phone has only rung for him a couple of times

He told me he would dump them immediately if he could get an offer for what he's got in to them….Yeah, I'll bet he would I thought…..while I bit my tongue 

 

[lostkitty]

lookoutbelow –

In Coronado?

[PD]

Here are some Coronado properties to compare:

MLS 060089745 – 1,395,000
445 E Ave
3/3 SF with 1800 sq ft
This house looks really nice from the outside.

MLS 060083537 – 1,195,000 – 1,350,000
4/3 with 2,100 sq ft and a 4,500 sq ft lot
This house looks really nice but does have traffic issues.

MLS 060065153 1,174,000
355 Alameda Blvd
3/2 2,291 sq ft 3,500 lot
This house is ugly from the outside and needs some work on the inside. There are also traffic issues (which will get better when North Island completes their main entrance changes). However, it has a nice size lot and space inside. It is certainly in the running for a family who wants some space a some yard. It has potential and could be made to look nice from the street with a few cosmetic changes.

MLS 060053438 – 1,185,000
340 I Ave
3/3 2,033 sq ft 3484 lot
This house probably needs some work. But it is a SF with a nice lot.

MLS 060072389 – 1,395,000
576 E Ave
3/2 1700 sq ft 3,500 sq ft lot
This Historic house is beautiful! It is right next to the high school, so there is some traffic. This location would be a negative to some people but a positive for families with high school students. It looks great from the street and seems to be well maintained. You get a small property tax break because it is historic – about 2k a year? I would not think twice about choosing this house over the next two properties.

Two townhouses I think are underwater:
MLS 06074572 – 1,325,000
940 E Ave #1
3/2 1,600 sq ft No lot size listed because it is a townhome
It looks nice from the outside and the pictures look good on the inside but it’s a TOWNHOUSE. You can’t ever tear it down to rebuild and you are sharing a wall with someone else. Plus you have HOA dues!
Paid 1,200,000 on 3/05
They would be lucky to sell this place for what the paid. Plus they have selling costs. Why would you buy this when there are nice SF homes for the same price are cheaper?

MLS 060052787 – 1,375,000
862 G Ave
3/2 1,640 sq ft
It looks nice from the outside and pictures inside look good. But it is a townhouse with HOA dues of $190. Sorry, but there is NO WAY I would buy a townhouse when I could have a SF for the same price or better.
Paid 1,200,000 on 6/05 This place is empty and has been on the market for over 200 days (or longer?)

[eagleeye]

Thanks PD,

I’m familiar with most of those places. I’m not interested in the 300 block. Actually I’d like to be in the 500 block on.

We’re leaning toward renting for a while to see how prices shake out.

We can only afford $1.4-$1.5M right now. We will be able to go up $300K or so in a couple of years. I’m hoping that something that is $2.3M now may be in the $1.7-$1.8M range in 3-4 years. Am I being unrealistic?

[lindismith]

You have nothing to lose by waiting. Those agents are SALES PEOPLE! They are praying on your fear of ‘losing out in a hot market.’ Guess what? It’s cooled down considerably. PD is right – ask them to show you comps from last year. You can even look prices up on Zillow, and Zip. You’ll soon start to get a clear picture. Things are going to continue to go down. Coronado’s no different.

[eagleeye]

The (wishful) thinking in Coronado is no matter what happens anywhere else they will be fine.

PD, Are you thinking of buying or are you just watching?

[PD]

I am watching with an eye toward buying in the future. We will not buy, however, if prices do not fall about 30% from the peak. We will move elsewhere.

[eagleeye]

I’m with you PD but sitting on the sidelines will be tough. Do you have any thoughts on my rental questions? Also do you think there is a stigma attached to being a renter rather than an owner?

[PD]

There is a bit of a stigma attached to being a renter. It doesn’t matter to some people but you can tell that others are a little snooty about it (and try to hide it).

[PD]

Per Ziprealty, listings in Coronado (92118) hit 200 today! I’ve been getting emails from them daily with new listings in my search range. That is a lot of inventory for this small town. I couldn’t find the thread with the active/pending/sold numbers for this zip. Can anyone direct me there? Months of inventory has got to be well over 8 months.

[Author]

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