[davelj]

It’s a real mixed bag down there, but most of the bag is not so good. As pointed out above, there are lots of half-completed and half-occupied complexes. But there are also plenty of fully-occupied projects as well, but you do have to be very careful.

Generally, prices have come down about 40%-50% in most places. But there haven’t been many actual foreclosures because most folks put down at least 30% when they bought – because that’s what was required when getting financed down there – and there were a lot of all-cash buyers. The typical buyer took out a $100K line against their house in California or Arizona and used it for a down payment on a $275K condo… and then defaulted on the line against the house but hung onto the condo.

Part of the problem, of course, with knowing exactly what’s going on down in Baja is that there’s no official MLS and the public records aren’t digitalized or readily available. Also, it’s very complicated to foreclose on a home in Mexico. So, it’s not easy to know exactly what’s going on down there.

My advice – worth exactly what you’re paying for it – is only buy if (1) you plan on owning it for at least 15 years, and (2) you’re in a mostly full complex (for HOA reasons). I don’t see much price appreciation down there for many years – Baja got way way overbuilt.

[davelj]

It’s a real mixed bag down there, but most of the bag is not so good. As pointed out above, there are lots of half-completed and half-occupied complexes. But there are also plenty of fully-occupied projects as well, but you do have to be very careful.

Generally, prices have come down about 40%-50% in most places. But there haven’t been many actual foreclosures because most folks put down at least 30% when they bought – because that’s what was required when getting financed down there – and there were a lot of all-cash buyers. The typical buyer took out a $100K line against their house in California or Arizona and used it for a down payment on a $275K condo… and then defaulted on the line against the house but hung onto the condo.

Part of the problem, of course, with knowing exactly what’s going on down in Baja is that there’s no official MLS and the public records aren’t digitalized or readily available. Also, it’s very complicated to foreclose on a home in Mexico. So, it’s not easy to know exactly what’s going on down there.

My advice – worth exactly what you’re paying for it – is only buy if (1) you plan on owning it for at least 15 years, and (2) you’re in a mostly full complex (for HOA reasons). I don’t see much price appreciation down there for many years – Baja got way way overbuilt.

[davelj]

It’s a real mixed bag down there, but most of the bag is not so good. As pointed out above, there are lots of half-completed and half-occupied complexes. But there are also plenty of fully-occupied projects as well, but you do have to be very careful.

Generally, prices have come down about 40%-50% in most places. But there haven’t been many actual foreclosures because most folks put down at least 30% when they bought – because that’s what was required when getting financed down there – and there were a lot of all-cash buyers. The typical buyer took out a $100K line against their house in California or Arizona and used it for a down payment on a $275K condo… and then defaulted on the line against the house but hung onto the condo.

Part of the problem, of course, with knowing exactly what’s going on down in Baja is that there’s no official MLS and the public records aren’t digitalized or readily available. Also, it’s very complicated to foreclose on a home in Mexico. So, it’s not easy to know exactly what’s going on down there.

My advice – worth exactly what you’re paying for it – is only buy if (1) you plan on owning it for at least 15 years, and (2) you’re in a mostly full complex (for HOA reasons). I don’t see much price appreciation down there for many years – Baja got way way overbuilt.

[davelj]

It’s a real mixed bag down there, but most of the bag is not so good. As pointed out above, there are lots of half-completed and half-occupied complexes. But there are also plenty of fully-occupied projects as well, but you do have to be very careful.

Generally, prices have come down about 40%-50% in most places. But there haven’t been many actual foreclosures because most folks put down at least 30% when they bought – because that’s what was required when getting financed down there – and there were a lot of all-cash buyers. The typical buyer took out a $100K line against their house in California or Arizona and used it for a down payment on a $275K condo… and then defaulted on the line against the house but hung onto the condo.

Part of the problem, of course, with knowing exactly what’s going on down in Baja is that there’s no official MLS and the public records aren’t digitalized or readily available. Also, it’s very complicated to foreclose on a home in Mexico. So, it’s not easy to know exactly what’s going on down there.

My advice – worth exactly what you’re paying for it – is only buy if (1) you plan on owning it for at least 15 years, and (2) you’re in a mostly full complex (for HOA reasons). I don’t see much price appreciation down there for many years – Baja got way way overbuilt.

[davelj]

[quote=njtosd][quote=davelj]That the CFA Institute – as an ORGANIZATION – professes to care about ethics should come as no surprise. Much as the American Institute of CPAs also professes to care about ethics, despite the clear conflicts that many CPAs face and often don’t handle particularly well. (Throw the American Bar Association vis-a-vis lawyers in there as well. I could go on.)

. . .
[/quote]

I don’t know about the CFA Institute, but the American Bar Association is a voluntary group that is primarily educational in nature. It has no ability to enforce anything. Attorneys take state bar exams; professional ethics inquiries are handled by an office of the state (may or may not be the state bar association, depending on whether it’s an integrated bar). In any event, these organizations take ethics charges VERY SERIOUSLY, but they only investigate issues that are brought to their attention. So although there are lots of crooked lawyers out there, it is not the result of inattention by their bar associations (or equivalent). It’s the result of people not reporting problems (frequently because the clients who know about the transgressions aren’t squeaky clean either).[/quote]

I would say that’s a good description of how the CFA Institute operates as well. The problem being that they only have any authority whatsoever (which is minimal) over actual charterholders. And the percentage of folks who hold a charter is a tiny percentage (2%?) of the total number of financial services professionals. So, despite their best efforts, the CFA Institute’s ability to enforce ethics in the financial services industry at large is… practically nil.

[davelj]

[quote=njtosd][quote=davelj]That the CFA Institute – as an ORGANIZATION – professes to care about ethics should come as no surprise. Much as the American Institute of CPAs also professes to care about ethics, despite the clear conflicts that many CPAs face and often don’t handle particularly well. (Throw the American Bar Association vis-a-vis lawyers in there as well. I could go on.)

. . .
[/quote]

I don’t know about the CFA Institute, but the American Bar Association is a voluntary group that is primarily educational in nature. It has no ability to enforce anything. Attorneys take state bar exams; professional ethics inquiries are handled by an office of the state (may or may not be the state bar association, depending on whether it’s an integrated bar). In any event, these organizations take ethics charges VERY SERIOUSLY, but they only investigate issues that are brought to their attention. So although there are lots of crooked lawyers out there, it is not the result of inattention by their bar associations (or equivalent). It’s the result of people not reporting problems (frequently because the clients who know about the transgressions aren’t squeaky clean either).[/quote]

I would say that’s a good description of how the CFA Institute operates as well. The problem being that they only have any authority whatsoever (which is minimal) over actual charterholders. And the percentage of folks who hold a charter is a tiny percentage (2%?) of the total number of financial services professionals. So, despite their best efforts, the CFA Institute’s ability to enforce ethics in the financial services industry at large is… practically nil.

[davelj]

[quote=njtosd][quote=davelj]That the CFA Institute – as an ORGANIZATION – professes to care about ethics should come as no surprise. Much as the American Institute of CPAs also professes to care about ethics, despite the clear conflicts that many CPAs face and often don’t handle particularly well. (Throw the American Bar Association vis-a-vis lawyers in there as well. I could go on.)

. . .
[/quote]

I don’t know about the CFA Institute, but the American Bar Association is a voluntary group that is primarily educational in nature. It has no ability to enforce anything. Attorneys take state bar exams; professional ethics inquiries are handled by an office of the state (may or may not be the state bar association, depending on whether it’s an integrated bar). In any event, these organizations take ethics charges VERY SERIOUSLY, but they only investigate issues that are brought to their attention. So although there are lots of crooked lawyers out there, it is not the result of inattention by their bar associations (or equivalent). It’s the result of people not reporting problems (frequently because the clients who know about the transgressions aren’t squeaky clean either).[/quote]

I would say that’s a good description of how the CFA Institute operates as well. The problem being that they only have any authority whatsoever (which is minimal) over actual charterholders. And the percentage of folks who hold a charter is a tiny percentage (2%?) of the total number of financial services professionals. So, despite their best efforts, the CFA Institute’s ability to enforce ethics in the financial services industry at large is… practically nil.

[davelj]

[quote=njtosd][quote=davelj]That the CFA Institute – as an ORGANIZATION – professes to care about ethics should come as no surprise. Much as the American Institute of CPAs also professes to care about ethics, despite the clear conflicts that many CPAs face and often don’t handle particularly well. (Throw the American Bar Association vis-a-vis lawyers in there as well. I could go on.)

. . .
[/quote]

I don’t know about the CFA Institute, but the American Bar Association is a voluntary group that is primarily educational in nature. It has no ability to enforce anything. Attorneys take state bar exams; professional ethics inquiries are handled by an office of the state (may or may not be the state bar association, depending on whether it’s an integrated bar). In any event, these organizations take ethics charges VERY SERIOUSLY, but they only investigate issues that are brought to their attention. So although there are lots of crooked lawyers out there, it is not the result of inattention by their bar associations (or equivalent). It’s the result of people not reporting problems (frequently because the clients who know about the transgressions aren’t squeaky clean either).[/quote]

I would say that’s a good description of how the CFA Institute operates as well. The problem being that they only have any authority whatsoever (which is minimal) over actual charterholders. And the percentage of folks who hold a charter is a tiny percentage (2%?) of the total number of financial services professionals. So, despite their best efforts, the CFA Institute’s ability to enforce ethics in the financial services industry at large is… practically nil.

[davelj]

[quote=njtosd][quote=davelj]That the CFA Institute – as an ORGANIZATION – professes to care about ethics should come as no surprise. Much as the American Institute of CPAs also professes to care about ethics, despite the clear conflicts that many CPAs face and often don’t handle particularly well. (Throw the American Bar Association vis-a-vis lawyers in there as well. I could go on.)

. . .
[/quote]

I don’t know about the CFA Institute, but the American Bar Association is a voluntary group that is primarily educational in nature. It has no ability to enforce anything. Attorneys take state bar exams; professional ethics inquiries are handled by an office of the state (may or may not be the state bar association, depending on whether it’s an integrated bar). In any event, these organizations take ethics charges VERY SERIOUSLY, but they only investigate issues that are brought to their attention. So although there are lots of crooked lawyers out there, it is not the result of inattention by their bar associations (or equivalent). It’s the result of people not reporting problems (frequently because the clients who know about the transgressions aren’t squeaky clean either).[/quote]

I would say that’s a good description of how the CFA Institute operates as well. The problem being that they only have any authority whatsoever (which is minimal) over actual charterholders. And the percentage of folks who hold a charter is a tiny percentage (2%?) of the total number of financial services professionals. So, despite their best efforts, the CFA Institute’s ability to enforce ethics in the financial services industry at large is… practically nil.

[davelj]

[quote=pfflyer]I understand the concept- but isn’t there an enforcement arm that can strip those who act unethically and cause them to possibly lose their career?[/quote]

Yes, there’s a professional conduct committee that hears various complaints about CFA charterholders from various quarters, and then rules on them. The punishments range from suspension from the Institute to losing one’s charter permanently. I would imagine that if you lost your charter, you would have done something that probably did irreparable harm to your career. But it isn’t the CFA Institute’s mission to kick bad actors out of the field of finance altogether, rather merely to disallow their use of the charter.

This is how most “professional certification” bodies work. If you lose your CPA license, you can still practice accounting – you just can’t use the CPA designation or do audits or a handful of other things that require the CPA designation. If you get disbarred, you can still work at a law firm, lobby, be a paralegal, etc. But you can’t do certain things that require being a member of the bar. The CFA designation isn’t a license – it’s a charter (which is a fancy term for a certification). All the CFA Institute can do is not allow you to use the charter or be a member of the Institute.

FINRA and the SEC are the real enforcement arms of the brokerage and securities industries. Now, if you’re unhappy with the job they’ve done in the recent crisis (which is a very reasonable position to take), then by all means bitch and moan about them… but the CFA Institute is more like a guild than an enforcement agency.

[davelj]

[quote=pfflyer]I understand the concept- but isn’t there an enforcement arm that can strip those who act unethically and cause them to possibly lose their career?[/quote]

Yes, there’s a professional conduct committee that hears various complaints about CFA charterholders from various quarters, and then rules on them. The punishments range from suspension from the Institute to losing one’s charter permanently. I would imagine that if you lost your charter, you would have done something that probably did irreparable harm to your career. But it isn’t the CFA Institute’s mission to kick bad actors out of the field of finance altogether, rather merely to disallow their use of the charter.

This is how most “professional certification” bodies work. If you lose your CPA license, you can still practice accounting – you just can’t use the CPA designation or do audits or a handful of other things that require the CPA designation. If you get disbarred, you can still work at a law firm, lobby, be a paralegal, etc. But you can’t do certain things that require being a member of the bar. The CFA designation isn’t a license – it’s a charter (which is a fancy term for a certification). All the CFA Institute can do is not allow you to use the charter or be a member of the Institute.

FINRA and the SEC are the real enforcement arms of the brokerage and securities industries. Now, if you’re unhappy with the job they’ve done in the recent crisis (which is a very reasonable position to take), then by all means bitch and moan about them… but the CFA Institute is more like a guild than an enforcement agency.

[davelj]

[quote=pfflyer]I understand the concept- but isn’t there an enforcement arm that can strip those who act unethically and cause them to possibly lose their career?[/quote]

Yes, there’s a professional conduct committee that hears various complaints about CFA charterholders from various quarters, and then rules on them. The punishments range from suspension from the Institute to losing one’s charter permanently. I would imagine that if you lost your charter, you would have done something that probably did irreparable harm to your career. But it isn’t the CFA Institute’s mission to kick bad actors out of the field of finance altogether, rather merely to disallow their use of the charter.

This is how most “professional certification” bodies work. If you lose your CPA license, you can still practice accounting – you just can’t use the CPA designation or do audits or a handful of other things that require the CPA designation. If you get disbarred, you can still work at a law firm, lobby, be a paralegal, etc. But you can’t do certain things that require being a member of the bar. The CFA designation isn’t a license – it’s a charter (which is a fancy term for a certification). All the CFA Institute can do is not allow you to use the charter or be a member of the Institute.

FINRA and the SEC are the real enforcement arms of the brokerage and securities industries. Now, if you’re unhappy with the job they’ve done in the recent crisis (which is a very reasonable position to take), then by all means bitch and moan about them… but the CFA Institute is more like a guild than an enforcement agency.

[davelj]

[quote=pfflyer]I understand the concept- but isn’t there an enforcement arm that can strip those who act unethically and cause them to possibly lose their career?[/quote]

Yes, there’s a professional conduct committee that hears various complaints about CFA charterholders from various quarters, and then rules on them. The punishments range from suspension from the Institute to losing one’s charter permanently. I would imagine that if you lost your charter, you would have done something that probably did irreparable harm to your career. But it isn’t the CFA Institute’s mission to kick bad actors out of the field of finance altogether, rather merely to disallow their use of the charter.

This is how most “professional certification” bodies work. If you lose your CPA license, you can still practice accounting – you just can’t use the CPA designation or do audits or a handful of other things that require the CPA designation. If you get disbarred, you can still work at a law firm, lobby, be a paralegal, etc. But you can’t do certain things that require being a member of the bar. The CFA designation isn’t a license – it’s a charter (which is a fancy term for a certification). All the CFA Institute can do is not allow you to use the charter or be a member of the Institute.

FINRA and the SEC are the real enforcement arms of the brokerage and securities industries. Now, if you’re unhappy with the job they’ve done in the recent crisis (which is a very reasonable position to take), then by all means bitch and moan about them… but the CFA Institute is more like a guild than an enforcement agency.

[davelj]

[quote=pfflyer]I understand the concept- but isn’t there an enforcement arm that can strip those who act unethically and cause them to possibly lose their career?[/quote]

Yes, there’s a professional conduct committee that hears various complaints about CFA charterholders from various quarters, and then rules on them. The punishments range from suspension from the Institute to losing one’s charter permanently. I would imagine that if you lost your charter, you would have done something that probably did irreparable harm to your career. But it isn’t the CFA Institute’s mission to kick bad actors out of the field of finance altogether, rather merely to disallow their use of the charter.

This is how most “professional certification” bodies work. If you lose your CPA license, you can still practice accounting – you just can’t use the CPA designation or do audits or a handful of other things that require the CPA designation. If you get disbarred, you can still work at a law firm, lobby, be a paralegal, etc. But you can’t do certain things that require being a member of the bar. The CFA designation isn’t a license – it’s a charter (which is a fancy term for a certification). All the CFA Institute can do is not allow you to use the charter or be a member of the Institute.

FINRA and the SEC are the real enforcement arms of the brokerage and securities industries. Now, if you’re unhappy with the job they’ve done in the recent crisis (which is a very reasonable position to take), then by all means bitch and moan about them… but the CFA Institute is more like a guild than an enforcement agency.

[davelj]

[quote=CA renter]
What about all the units that were converted to rentals when the developers were unable to sell them? I’d guess that as soon as the prices rise to a certain point, these will come back on the market as “for sale” inventory. I’m guessing the developers/builders are in the red every month on a lot of these units, and they’d be happy to off-load them ASAP.

You know the downtown market far better than I; what are your observations regarding these units and the possibility that the developers are losing money every month if they are being rented out?[/quote]

The only downtown developments I’m aware of that were originally intended to be condos, but subsequently turned into rentals, are Vantage Point, Smart Corner and Broadway Lofts. Vantage Point was sold to Zell’s Equity Residential Properties and are now operated as apartments. As ERP is a wholesaler and not a retailer, these won’t come onto the market for decades, if ever. ERP rarely sells and has never retailed. So, they would have to sell the building to some other operator who would then retail the units out. Given ERP’s m.o. I just don’t see that happening. Broadway Lofts (~80 units if memory serves) could come on the market eventually as I think that group would like to sell one day. Smart Corner is selling all of the non-studio units, and renting out the studio units. So, one would think that those studio units will one day also be for sale. Other than that, however, there aren’t a lot of these units out there as a percentage of the total, so I don’t see much of an impact there.

There were a lot of busted condo deals getting sold and re-financed in ’08 and ’09 in other parts of SD. My bank financed one in ’09 in which the new owners bought the units for $110K/door (in RB). We recently asked them if their long-term plan was to sell the units as condos if the market ever came back and their response was, “No, because then we’d have to replace the cash flow economics of the deal we have, which would be very difficult.” So, they’re planning on holding the units as apartments indefinitely. I think there’s a lot of that going on, particularly with the extremely favorable rates that many folks were able to get from Fannie/Freddie on apartment loans. If you bought well and locked in low-rate, long-term financing… you’ll be hard-pressed to replace that combination again, so why sell?

[Author]

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