[DaCounselor]

“Condos:

> little control over costs (HOA, special assessments)
> more influenced by distress sales (for example, in an SFR you can argue that you have a better lot, better sunlight, etc than the distressed property across the street that just closed escrow for $50K less than your asking price – when the condo three doors down from you with the exact same floorplan sells for $50K less than yours, try telling a buyer how your condo is so much better than the distressed one and how that low-ball comp should not be considered)
> HOA tells you how to live (no junk on the balcony or patio, landscaping must be approved, no parking in the driveway, etc)
> common walls – I love hearing my neighbors {fill in the blank}
> poor construction – condos are the main reason destruction defect litigation exists
> lifestyle – looks and feels like an apartment complex

Anyone care to add to the list?”
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These are all good and valid points, many of which can be argued both ways. With respect to a lack of control over costs, however, every homeowner can be as involved as they would like regarding HOA decisions. Everything from meeting attendance to actual board membership is possible. I believe (as the owner of 3 attached units) that the apathy amongst homeowners is evidence of a desire to not have to make the decisions regarding $$ – it is far easier to just write the check and not delve deeper and just live your life. And folks enjoy the benefit of the HOA when it comes to landscaping, exterior maintenance, roofs, etc. It’s a trade-off and not necessarily a negative.

Regarding distress sales, I would argue that a SFR in a planned community is no more immune from a low comp than an attached unit. Condos can also be differentiated by location within the complex (end unit, top floor, view, etc.) the same way a SFR in a planned community can be.

Condo owners must abide by varying degrees of HOA rules, which some folks find restrictive while others enjoy. Many folks don’t want to look out their window and see junk crammed onto their neighbors’ balcony, cars on blocks on the front lawn, a neon purple house across the street, etc.

I can assure you that poor construction is not limited to condos. There have been a large number of single family home tracts that have been slapped together and have been the subject of construction defect litigation.

As for lifestyle, we’re talking apples and oranges. Many folks like the lower maintenance lifestyle that condo living affords. Some condos are nothing more than apartments and some are very, very nice. And it’s often possible to get oneself into a better area for less money with a condo versus a SFR. That is one of the real benefits I see. And I think that probably plays into the discussion of price depreciation – ie – what will happen to the $600K coastal condo versus the $600K house in North Park (or the like)? I guess we’ll see.

Oh, and when I’m talking about condos, I’m including in my head townhomes. Just a disclaimer. Anyway, I believe most folks prefer SFRs and with good reason. My only point is that condo ownership/living is not all bad and has actually worked out quite well for me and numerous other folks in my circle. I beleive condo ownership in a great location trumps SFR ownership in a less-than-great location. The end.

[DaCounselor]

“Condos:

> little control over costs (HOA, special assessments)
> more influenced by distress sales (for example, in an SFR you can argue that you have a better lot, better sunlight, etc than the distressed property across the street that just closed escrow for $50K less than your asking price – when the condo three doors down from you with the exact same floorplan sells for $50K less than yours, try telling a buyer how your condo is so much better than the distressed one and how that low-ball comp should not be considered)
> HOA tells you how to live (no junk on the balcony or patio, landscaping must be approved, no parking in the driveway, etc)
> common walls – I love hearing my neighbors {fill in the blank}
> poor construction – condos are the main reason destruction defect litigation exists
> lifestyle – looks and feels like an apartment complex

Anyone care to add to the list?”
__________________________________

These are all good and valid points, many of which can be argued both ways. With respect to a lack of control over costs, however, every homeowner can be as involved as they would like regarding HOA decisions. Everything from meeting attendance to actual board membership is possible. I believe (as the owner of 3 attached units) that the apathy amongst homeowners is evidence of a desire to not have to make the decisions regarding $$ – it is far easier to just write the check and not delve deeper and just live your life. And folks enjoy the benefit of the HOA when it comes to landscaping, exterior maintenance, roofs, etc. It’s a trade-off and not necessarily a negative.

Regarding distress sales, I would argue that a SFR in a planned community is no more immune from a low comp than an attached unit. Condos can also be differentiated by location within the complex (end unit, top floor, view, etc.) the same way a SFR in a planned community can be.

Condo owners must abide by varying degrees of HOA rules, which some folks find restrictive while others enjoy. Many folks don’t want to look out their window and see junk crammed onto their neighbors’ balcony, cars on blocks on the front lawn, a neon purple house across the street, etc.

I can assure you that poor construction is not limited to condos. There have been a large number of single family home tracts that have been slapped together and have been the subject of construction defect litigation.

As for lifestyle, we’re talking apples and oranges. Many folks like the lower maintenance lifestyle that condo living affords. Some condos are nothing more than apartments and some are very, very nice. And it’s often possible to get oneself into a better area for less money with a condo versus a SFR. That is one of the real benefits I see. And I think that probably plays into the discussion of price depreciation – ie – what will happen to the $600K coastal condo versus the $600K house in North Park (or the like)? I guess we’ll see.

Oh, and when I’m talking about condos, I’m including in my head townhomes. Just a disclaimer. Anyway, I believe most folks prefer SFRs and with good reason. My only point is that condo ownership/living is not all bad and has actually worked out quite well for me and numerous other folks in my circle. I beleive condo ownership in a great location trumps SFR ownership in a less-than-great location. The end.

[DaCounselor]

“There is no more equity in homes because people spent all their equity living well beyond their means for the past 5+ years.”
________________________

This a pretty incredible blanket allegation. Is there really “no more equity in homes”?? Please provide data. Thanks.

[DaCounselor]

“There is no more equity in homes because people spent all their equity living well beyond their means for the past 5+ years.”
________________________

This a pretty incredible blanket allegation. Is there really “no more equity in homes”?? Please provide data. Thanks.

[DaCounselor]

“I remember a pretty nice house in Bird Rock going to the court house steps at 165k. I don’t know what it went for but those were indeed crazy times.”
_________________________

I doubt anything sold for anywhere near that amount in Bird Rock in the mid-90’s trough. Too low. I was perusing homes in the area during that time frame in the $400-500K range – 3/2, less than 2000 sq. ft., modest and in need of some sprucing up. I don’t doubt that some fixers sold for under $400K.

Looking at let’s say $450K in the mid-90’s – that probably equates to about $600K today. Jumbo mortgages back then were pressing 9%. I haven’t run the numbers, but I would guess that a trough of around $800K today would equate to an estimated $450K trough in the mid-90’s – conventional financing, apples to apples of course.

[DaCounselor]

“looks like a recent relist:
http://www.trulia.com/property/1039427022-11238-Pepperview-Ter-San-Diego-CA-92131

a swift 100k haircut. I wonder what caused them to suddenly take the rose-tinted spectacles off.”
___________________________

I don’t understand the “haircut” reference here. The link provided shows an ’03 purchase for $545K and a list price of $799K. Even if they sell considerably down off of list, doesn’t it appear as if they will take a very nice profit on this deal? What does a “haircut” mean in this scenario?

[DaCounselor]

“How does one distinguish Bay Ho from Bay Park?”
________________________

I believe Bay Ho is north of Balboa and Bay Park is south of Balboa. Both are on the western edge of Clairemont.

[DaCounselor]

Nor_LA-Temcu-SD-Guy,

I would not buy my primary residence now for the price that the last comp sold for. Prices are still a bit too high in my neighborhood. If prices slip about 5-10% from the last sale, I would buy.

[DaCounselor]

Who are you when you are up and dressed, anyway? What type of counsel do you provide? Are we talking social worker, here, or what?
_________________________

I provide legal counsel.

NLTSD Guy – I am neither a buyer or seller, but an owner. Regarding consumer credit, I really don’t know enough about the input data to draw any conclusions. I do know that many financially savvy folks take on debt when and where it makes sense and reduce debt when and where it makes sense, for whatever that’s worth.

[DaCounselor]

“Buyers are much more optimistic right now despite all the dooom and gloom of the bloggers.”
_______________________

I would suggest that 99% of the local population spends oh, about 0% of their time surfing housing blogs. I haven’t found a single friend or acquaintance who has even heard of this site (no offense, Rich). The folks I know who have purchased recently or are looking to purchase now are focused on their own financial picture, not what bloggers are “predicting” is going to unfold in the SD housing market.

I think most folks are too busy attending to life’s daily requirements, including making money, to pay any mind to these types of blogs. That being said, I enjoy surfing through here from time to time to see some good stats, some misleading stats, some interesting discussions, some ridiculous screaming sky is falling rhetoric, some good analysis, some poor analysis, a whole lot of chrystal ball gazing and indeed some very sour grapes. It’s a nice diversion, isn’t it? But surely only a fool would allow a miniscule community of faceless prognosticating bloggers to drive their financial decisions. That’s a recipe for disaster if you ask me.

[DaCounselor]

Yeah, what davelj said…

In addition, this article smacks of someone who perhaps, despite his allegations otherwise, really cannot afford to buy a home he would like, so he is therefore constructing an argument in favor of lifetime renting. Regardless, his poor math and his omission of the power of leverage completely undercut any credibility.

Excellent point by sduuude as well. Furthermore, with focus and determination it is very possible to pay off that mortgage in well less than 30 years.

[DaCounselor]

Ozzie – the folks that take joy in others losses in this context, in my opinion, are attempting to offset and obscure the fact that many, many others have made incredible sums of money in a short period of time. It makes them feel better about “missing the boat”.

RiU – excellent example of folks who are cashing in HUGE in a mere 8 years. Wow.

Bugs – your projected $65K loss is based on nothing but speculation – akin to the speculation that the originator of this thread was operating under when proclaiming this deal was a “bloodbath”. You can speculate as you wish and attempt to spin this deal any way you desire – no matter, without some cold, hard facts in support there is simply no way to characterize this deal as a “bloodbath”. And that is my only reason for chiming in on this thread – to point out that the thread was initiated with a screaming, sensational and inflammatory headline that now appears to have fizzled into a “uh…never mind.”

[DaCounselor]

According to a friend who lives in the neighborhood, this home sold for $681K in a few weeks. Not exactly the “bloodbath” that the original post so proudly and excitably proclaims.

Anyone developing an appetite for a little crow?

[DaCounselor]

“The listing agent increased the list price to $675K. Went into Pending after 19 days on the market.”
______________________________

Thanks RiU. I’m certainly interested to learn what the sales price was so we can all see the level of “bloodbath” on this deal.

[DaCounselor]

“Bug never said it’s the same. He said a 30% premium won’t become a 100% premium. I agree with that statement. I was the one who said it’s the same. Let me take that back and say that I agree with Bug’s statement. You’re nit picking at the tree and fail to see the forest.”
_______________________

I don’t equate wanting to see and analyze supporting data with “nit-picking”. But now that asianautica has withdrawn the “tends to stay the same” argument, it’s irrelevant.

As for my request for a response from Bugs, that was only intended to solicit further analysis regarding the Zillow data posted. I did not mistake Bugs as the author of the “tends to stay the same” argument, am aware of Bugs position and generally agree that there is not likely to be a massive increase (aka 100%) in premiums paid.

My position has been and remains that the most desireable areas of SD will weather the downturn better than the less desireable areas. That’s it.

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