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Thanks.

Some thread on NextDoor was talking about the properties and said that 5/6 of the 1st phase are gone. Although that was a couple of weeks ago. One other comment on NextDoor said that the base price gets very low-end fixtures. Although I am not sure if that is believable as NextDoor gets really, really odd comments from people.

The houses are definitely high priced for that neighborhood, and the HOA is a very non-Clairemont feature. The rep claimed this was not Bay Ho, but Clairemont. I guess Bay Ho is quite an undefined area – the east boundary could either be Clairemont drive or Moraga. These homes are assigned to the same school as my house, but no one in the area seems to want to send their kids to Cadman. And I was surprised that they said ‘excellent’ schools in the advertising…

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[quote=millennial]So if the median person in San Diego can’t qualify for a conventional loan I’m assuming the majority of San diegans are renters.[/quote]

Retired folks might have a low income but own their home. They just bought a long time ago. The big advantage of buying a house is that a fixed mortgage ignores inflation.

I would actually love to see the median price ‘paid’ for all SFH in San Diego (Both nominal and real median price). I imagine the median ‘paid’ price for SFH would be in the low 200s.

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What would have to happen for San Diego prices to drop 15%?

Runaway inflation as in 1978? This would not affect nominal prices. The 500,000 house is not reduced in price – it just costs less because the value of a dollar is reduced.

Increased interest rates? Unlikely. Rich has shown that interest rates do not correlate well with house prices in the USA. I think this due to the 30 year fixed mortgages available in the USA. In the United Kingdom, house prices are very sensitive to interest rate changes because there are no fixed 30-year mortgages. (Funnily enough, the UK and Canada have more expensive houses than the USA despite the absence of fixed mortgages)

Regulatory changes? Maybe. Say Trump kills Fannie and Freddie and the FHA. I think prices would drop due to market shock in the short term. But look at Canada and the UK – they do bubbles even without Fannie and Freddie and the FHA.

Tax changes? Possible. If Trump kills the mortgage interest deduction while increasing the standard deduction I think the luxury house market will fall at least 15%. Many wealthy people use mortgages as part of their tax strategy. But I doubt the sub-$1,000,000 market would be affected. If California got rid of Prop 13 then house prices might fall 15%, but i see expensive houses in states without Prop 13.

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There is zero chance of a 50% drop in house prices. There is a link between house prices and rent prices. Unless rent prices collapse then house prices will not fall by 50%.

Think about it. Even with a 20% drop in San Diego prices, it makes financial sense to buy a property and rent it out.

‘Nominal’ rental costs have never fallen in San Diego and demand for rentals remains high: http://www.deptofnumbers.com/rent/california/san-diego/

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Flat tax. Increased standard deduction combined with removal of mortgage interest deduction and various other deductions. Value Added Tax (VAT) on imports so essentially a federal sales tax.

The mortgage interest deduction never made any sense to me even though I benefit from it.

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[quote=gzz]

Problems at Qualcomm

[/quote]

Qualcomm is killing it. It has the best chips by far. The way to spot a successful company is the many attempts at shitty lawsuits.

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I suspect that Trump will impose an employer tax on H1B visas. For example, the company has to pay the Fed the equivalent of 25% of the employee’s wage. That will sort out the ‘cheap’ labor but still provide the visa to companies that really do need the expertise.

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[quote=spdrun]Parking in San Diego is a cakewalk as compared to most similarly-sized US cities. OMG, you might have to walk a block after finding a spot![/quote]

North Park is pretty bad in my experience.

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I suspect the CA Republican party will slowly change to centrist positions to attract more voters.

We need some sort of supportable opposition to Democrats. I am a little worried that CA might end up like Chicago/Illinois. With tribal politics and corrupt backroom deals to decide which Democrat will head the gravy train.

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I hate truncated graphs. And what was the point in truncating this particular graph?
https://en.wikipedia.org/wiki/Misleading_graph#Truncated_graph

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[quote=mixxalot]True but it is a bubble and I’d rather buy stocks and wait the bubble out til it pops in few years. It crashed before and will again once the speculators are out.[/quote]

From the Shiller PE Ratio the stock market is more overvalued than housing. Bonds are also historically overvalued. Maybe Rich can weigh in but everything seems historically overvalued. In my opinion housing looks better value than stock at the moment for home owners (maybe not investors).

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[quote=mixxalot]In same boat and have decided to wait. Prices are sky high right now and inventory supply poor. I don’t see much under 800k in decent areas.[/quote]

From your post history you seem to have waited for the past 6 years, which in hindsight seems a mistake. We can get caught up with monetary value too much forget about life. The OP wants a bigger place for a family, can afford the new place easily, and will be settled.

It is hard to time the market unless there is an really obvious overvaluation (2005-2007). And we are homeowners, not investors. As Rich has pointed out, the market might be 10% overpriced at the moment, but it is nowhere near like 2005-2007. If the OP is staying forever then 10% extra today is meaningless over 15-30 years.

ps To the OP. We have two kids. It is about 1000/month for each child. San Diego is actually very cheap for daycare/preschool. My friends in Boston are paying 2000 for one child.

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[quote=Panderso]
Bewildering – yeah, we’ve considered child-care in our budget. That’s why we have a cap on what we’ll buy. It is expensive and unfortunately we don’t have immediate family in the area so no free day care. :([/quote]

Our daycare/preschool bill is about the same as our principal and interest. It would be great to have any family around.

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My house just appraised for 40% higher than when i bought it in 2014. Seems a bit crazy to me, but I think it is driven by two factors: the rental market is insanely expensive and interest rates are ridiculously low.

The rental market is a mystery to me, have rents ever fallen? Do present rental prices provide a floor for house prices?

For interest rates. If interest rates rise then house prices might go down, but you will be paying a higher payment because of the higher interest rate.

If interest rates fall then house prices will go higher.

One left of field factor: have you factored in child care prices? Can get pricey.

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[quote=ltsdd]

Instead of making up stuff and wild-ass guesses. Here’s a good site for some data.

http://www.city-data.com/county/San_Diego_County-CA.html

Some key stats:
migration – outflow slightly more than inflow
births is >2x deaths
industries: 92% is non-scientific/technical[/quote]

The migration data on that site is 11 years out of date.

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