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EconProf
ParticipantWell said, Svelte
To each his own…
ParticipantCorrect sdr. You know where temperatures are (slightly) hotter than St. George? Las Vegas and Phoenix. Which are also getting an influx of people fleeing CA.
Demographics is destiny.Participantsdr: Stay calm. Breath deeply. Everything will be all right.
I, probably like most Piggs, learned long ago to take with a grain of salt what realtors tell them. Their income depends upon convincing people to “Buy now…the data show…you are going to miss the boat…” C’mon man, as Biden would say.
Your recent posts, actually rants, simply do not correspond to a casual look at the charts shown by Rich at Piggington. Yes, SD prices are up and down, and generally up over the long term. But the PPSF and other indicators belie your rabid and angry accusations. And citing your own taxes, utilities, house appreciation, etc. has little to do with average San Diegans. Good for you… You scored. But then why is San Diego losing population as per latest Census data? People, and increasingly businesses, are looking at the long term trend before they make the big decision to move, and it is not looking good for CA and recently, San Diego.
You will undoubtedly respond childishly to this post with more cherry-picked data. But I’ll probably refrain from further postings. Feel free to declare victory 🙂
Participantsdr: In the rarefied world of Carlsbad and its environs in which you circulate, you are avoiding the picture of greater San Diego, and CA in general. You brag that your tiny slice of San Diego is going up in price, but what about the other 95% or so of San Diego? And what kind of physical house does one get for that $1,432,500 in Carlsbad? Perhaps the same structure that goes for half that here. An ocean view there (rare) will add to that price. Here mountain and red canyon views are a given with any luxury house. Add in the property tax at about 1% of value (mine), utility costs 1/3 of yours, and vastly better schools as measured by all the metrics of student achievement. Been to downtown San Diego lately? Ours is hopping with restaurants, theatres, students from our growing university, and tourists. Zion is a half-hour away, Brian Head for skiers about 3 hours away, Vegas under two hours away. And for ethnic foods, we have all sorts, with about ten Thai restaurants just for sdr to try.
The US is increasingly stratified by income, so the income-elite can afford Carlsbad, and I’m sure it gives them bragging rights with their friends and relatives nationwide. St. George…not so much. But for the other 95% of the population–the ones moving here from CA and San Diego, we will continue to get the influx, as will other similar locations.
You mention we have had 3.5% home appreciation in the last 3 or so years. This ignores the MIX of housing, since we have a lot of condos going up, and perhaps smaller houses which distorts the picture. And yes, the more than doubling in mortgage rates have hurt recent sales prices. Speaking only for myself, Zillow puts my house at $825,000 vs the $550,000 I paid for it 3 years ago. Probably falling lately due to mortgage rates.
ParticipantGood points sdr, and I accept all of your data. And yes, the unduly low interest rates of 3 years ago could be called a black swan event, which I had not thought of before. It was, of course, a misguided attempt to goose the economy by the Fed and it goosed prices everywhere. Glad I locked in a 3% fixed rate on my house. Now we are in the hangover stage.
A few observations: supply can increase where land is available and cheap, which is the case in St. George and similar locales. Coastal San Diego and Carlsbad…nada. Construction costs also far lower for the same product in the cities you cite. The far cheaper housing prices in the cities you list will continue to prompt the exodus from CA. More push/pull comes from the vast difference in taxes, utility costs, homelessness, and decent politicians. Ready to pay reparations?
BTW, many companies are also choosing to flee, not just people.
Demographics is destiny.
However
Participantsdr: Wow. Talk about cherry-picking the data! And something called “short-termism”. What do those dozen or so cities with the biggest price declines in recent months have in common? They have all doubled or tripled in value in recent years.
Imagine you long ago picked an occupation in great demand where the average salary has doubled in the most recent 5-6 years. Then a “black swan” event comes along, hurting your industry more than others. Your income is reduced by 10%. Did you make a mistake? Did those who moved to Idaho 5 years ago make a mistake?
The black swan event was, of course, the doubling or tripling of mortgage rates, which apparently most hurt the fastest growing areas of the country. But the exodus from California continues, and shows every sign of accelerating, even from beautiful San Diego.
Participantsdr: you want numbers instead of personal opinions? OK, let’s start with your numbers.
You claim that I live in a relatively ritzy neighborhood for St. George. Yes, a true statement. As I said previously, we paid $550,000 3 years ago and it is now worth about $825,000, which is below YOUR number of $1 million plus for a mediocre house in Mira Mesa. A million dollars here will get you a real luxury house with view far better than mine.
As for St. George having a lot of houses for sale, true, but let’s remember that St. George has a relatively young population with lot of children (2/3 Mormon) who move a lot into larger houses. And, you are correct that we have a lot of building going one here, thus the larger inventory of homes for sale.
Yes, the big cities you mention that have received the fleeing Californians are tapering off, I suspect because of the jump in interest rates. But please, Mr. numbers guy, clarify what your numbers are suggesting–certainly not a population decline.
ParticipantSvelte, sorry to hear about your accident. I hope it wasn’t with that St. George truck in your picture. No injuries I hope.
sdr, thanks for the lengthy response.
And I am not surprised with your data showing a lot of people moving to St. George from the Salt Lake City area. Probably motivated by our better winter weather and, like us, the small city ambience as opposed to big city atmosphere and costs. And, one can add to that their smog, a problem due to their terrain and prevailing winds.
When we meet newcomers, which is quite common in Brio, our new development, our first question is where are you from. The most common answer is usually a big CA coastal city. The second is somewhere in Utah. Seldom is it the Midwest, and never the big cities of the east coast, who are reportedly moving to Florida.
I have often said here that San Diego is the best west coast city if one wants to live near the ocean, which may be why SD gets so many people in your area from the LA and Bay area. When I taught economics long ago at SDSU, on the first day of class I would sometimes ask where the students were they were from. When I mentioned “the San Francisco area”, a third of the hands would shoot up. I suspect they wanted to get away from Mom and Dad, still pay in-state tuition, and party-on in Surf City, USA.
San Diego was quite liveable then, with decent schools, normal RE prices, good government, and Proposition 13 taxes. So we rode the growing RE appreciating rental market until landlording became more attractive than teaching. But age and CA’s deteriorating trends made us look elsewhere. (OK, sdr, the capital gains we enjoyed were a factor too).
What deteriorating trends? An increasingly expensive and dysfunctional government, crazy environmental rules, homelessness, poor schools, high taxes, traffic congestion, a stasi-like one-party government (reparations anyone?), and no likelihood these trends would change.
So moving to St. George which my son and family had also picked seemed like a natural. And given that CA was losing population and St. George growing exponentially, it seemed like a better location for my RE investments, a bet that has paid off.
sdr, you can point to the amenities of your ritzy neighborhood and count the cranes to predict the future of RE trends, but I am a numbers guy, and we all know CA has been losing population at an increasing rate, and cities like Phoenix, Vegas, Austin are gaining those people. Thus my prediction that RE prices will follow. And contrary to what you are seeing in your unique neighborhood, they are high-income, high tax-bracket techies who learned from COVID they can work from home and don’t have to endure the long commutes of previous years. As you know, AZ and UT have low income taxes, and NV and Texas have none.
So the flight from CA continues, and lately even San Diego has recently lost population. As for some high income LA and San Francisco choosing to move to a more attractive CA coastal city like SD, this is no surprise. It is the least dirty shirt in the closet.
ParticipantOK, so why are people leaving CA in droves? And increasingly in San Diego? And what does that portend for your RE values?
ParticipantThank you sdr for the request.
We are still glad we moved to St. George, UT from San Diego for all the reasons I have cited. But as you have pointed out, its not for everyone. I miss the weather, the big city cultural attractions, the ocean, etc. But the growth in population here vs. California’s decline has made our RE market more profitable, and our house and three condos have appreciated accordingly. Admittedly, part of the reason for our move was the small city friendliness, our son and his family, and the culture that is Utah. The latter results in a clean and efficient government, low taxes and remarkably low utility rates, proximity to everything, and scenery–we can see snow-capped mountains from our back yard. Last Saturday we had our Ironman competition with participants from all over the world–2.4 mile swim, 112 bike distance, 26 mi. run.
Admittedly, much of our reason for moving was our age–we’re old! But I remember fondly our time in San Diego, and appreciate our gain in net worth as we invested in houses, apts, and commercial properties in the 80’s 90’s and up to 2015. Best wishes to all my Pigg colleagues.
Participant[quote=sdrealtor]That makes sense. Its easier for large but not densely populated states to grow percentagewise than small densely populated ones[/quote]
You are correct sdr, as usual.
FWIW, I just got a condo vacancy, 3Br 2 Ba, 2-car garage. Will charge $1700, which will be highest rent in the complex. Potential renters beating down the door to see it. No one puts up For Rent signs here–just put the word out to acquaintances.
Our housing price future is uncertain because of two opposing forces: The jump in interest rates vs. influx of people and businesses.
ParticipantWhoops! I meant this to be the start of a new OT thread. Either I goofed up or, Rich T. informs me by text that they are “migrating the site to a new host”, whatever that means.
Anyway, apologies to sdr, and to all my fellow Piggs, happy holidays. Hope this “warms the cockles of your heart”.
Best,
EconProfParticipantA Landlord’sTale
Here is a true story about a series of events I went through some two to three decades ago in San Diego. It should make for good cheer in this Christmas season.
It happened in several phases, and I’ll start toward the end.
I walked into a “tenants attorney” office with a someone else’s tenant and paid a sleaze-ball attorney (SBA) several hundred dollars in cash to defend against an eviction.
How do I know he was a SBA? I had gone against him months ago in an eviction from one of my buildings, a 4-plex in Santee. The SBA was known for defending every kind of tenant with any means possible, no matter how egregious the tenants’ actions (OK, that’s our legal system–everyone needs needs legal representative), and no matter what dirty tactics he had to use in the process.
In my Santee case, the tenant–a family of four with two kids under ten years old–was a druggie doing great harm to the apartment, the other tenants, and probably his family. He said he would use SBA To stop or greatly delay the eviction so he seemingly had used him in the past. The last time I had tried to collect his overdue rent he was lying on a sofa in the living room with his family, high as a kite, with his legs shaking from his drug high. Of course, he scared my other three tenants. He said he was a carpenter and if he were to be evicted he would take a framing hammer to all the sheetrock in the apartment. I ended up with a “cash for keys” ($500) outcome plus ten days more possession.
Back to the middle of this tale. A year or so later, I was having a McDonalds lunch at their El Cajon Avenue and (about) about 27th Street location. I at a long table amongst several other customers, including a mixed-race female in her late twenties while I read the paper and ate. Finished up, drove to a Home Depot store to buy landlord’s supplies and at the check-out counter discovered I did not have my billfold in my pocket. Alarmed, I guessed the McDonald’s must be where I left it. With little hope of recovery, I drove back. As I parked there, the lady was in front of the McDonalds, waving my billfold in the air. Thanked her profusely and we went inside and talked for half an hour, each explaining our background, employment, etc.
She worked at cleaning up at a downtown restaurant, low paying, and lived in one of those ancient, now-gone single room occupancy (SRO) former hotels with the bathroom down the hall. She said she was now being unfairly evicted and though I don’t remember the details, I felt she was right.
Footnote: She didn’t have the accent of most US blacks, so I delved into her past. Turns out her dad was a Black man serving in the US military in Japan, and her mom was Japanese. Such mixed race children do not fare well in Japan, so her father, whom she adores, brought her back here and now lives far away.
She was distressed because she could not afford the initial fee attorneys charge to begin to fight an eviction.
You can guess what I had to do next. I drove her to the office of the SBA, where I paid the fee for her to fight the eviction. Of course she won, probably without going to trial, as this landlord had to know the reputation of said SBA.
We exchanged letters for a while, with her telling me of her progress, and calling me “her Angel” for helping her. My wife and I enjoyed the letters, and eventually I let the contacts lapse.
Conclusions: Don’t judge people by their appearance, race, or financial status.
Also, poor people can be astonishingly ethical and honest.ParticipantPhaster and sdr:
Water is indeed a big issue here, and the drought throughout the western states, hopefully temporary, needs to be addressed. Fortunately, solutions exist, especially using different pricing mechanisms.
My water & sewer bill is about a quarter of what I paid in San Diego (for two people, no lawn in either place). So raise the price per gallon.
This will also discourage the hay and alfalfa growing in the area wherein massive sprinkler systems on big wheels throw out water at 4:00 in the heat of the afternoon to acres of farmland growing hay and alfalfa. Get the feed for our horses and cattle from the Midwest where rainfall is more abundant. BTW, the growing of those crops may explain the rediculous claim by the Washington Post and Guardian that our per capita water consumption is twice that of other areas.
Take agriculture watering out of the calculation and our water consumption per capita would collapse. I believe new housing already cannot have lawns, so artificial turf or desert landscaping is the norm. Lots of people have replaced grass with artificial turf, and more may do so with proper pricing. -
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