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EconProf
ParticipantYes, sdr, rates will probably hurt values everywhere.
Glad I bought my three condos last summer. Two of them in same complex (3 Br, 2 Ba, double garage), for $335k each. Zillow puts them at $407k now, for what that’s worth. Another 2,1 condo for $190K, rents for $1100, and Zillow has no updated value for it. Vacancies are non-existent.
This weekend is the Ironman World Championship, which we permanently stole from Hawaii, so lots of visitors, all looking buff too!ParticipantMany reasons, but here are three factors I’ve read about:
1. The overly generous COVID free money meant that for many people getting a job would mean a drop in income, this despite the rapidly rising hourly pay rates offered by desperate employers.
2. California’s generous rent relief programs encourages many to stay unemployed.
3. Mothers with school-aged children quit to take care of their new responsibilities at home, especially in the blue states like CA with strong teachers’ unions. A surprising number are deciding to not return to work.Participantsdr, you are usually pretty good with math, but a few corrections are in order.
July of 2020 was more like a year and a half ago, not two. So our appreciation rate was about 20% per year, in line with most all the RE reports on St. George houses.
No I did not sell my San Diego RE investments 2-3 years ago…more like twelve years ago, investing in AZ. Yep, it would have done better if left in San Diego, but not by much.
The new house we moved into last April did not require any money to be move-in ready as the developer (Brio) gave us so many choices and optional add-ons, costing about 50K but included in the $556,000 price.
Back to the bigger picture, CA has the highest unemployment rate 7.7% (BLS, December), and Utah second lowest (1.9%), with St. George the lowest in Utah. Utah has the 2d fastest population growth and CA is losing population faster than all states except NY and IL. I’m guessing the politics of each state is a major factor. Incidentally, our property taxes are about one-half of one percent, so moving to a better house with better government cut our taxes paid by about 80%. Income taxes, likewise.
Congrats on your low utility bills, but let’s not ignore the $20,000 to $40,000 you probably spent to put in solar.
As you and I have previously pointed out, SD is benefitting from people moving from the two other worse-governed coastal California metropolitan areas who still want to stay near the ocean. With employers fleeing CA to other western states, I’m not sure how long that will prop up San Diego prices.ParticipantNow about our RE…hard to accept Redfin’s claim our home prices are down 3% YOY, since all other reports say 20% or so. Could be because Redfin does not hold constant the size or quality of homes sold. So more small houses or condos would yield that misleading figure.
I can only speak for my own experience of moving last April into our new house for $556,000. Am now refinancing and the appraisal came in at $730,000. The refi will enable me to add to my stock of rental condos (3 currently).
PS: our house price was set in the previous July, so appreciation was not as large as it appears.ParticipantThanks sdr for keeping this old thread alive. I still like to keep up with SD RE trends on Piggington.
Re your comments, yes it can get cold here, and warm in the summers, although our elevation keeps us better off than nearby Vegas.
I looked up official average St. George temperature highs and lows and rainfall for February: average daytime high 59, nighttime low 37. Brutal! 3 days with precipitation.
For March, 68, 43, and 4 days of precipitation.
That must account for our awful utility bills on our 2550 SF house: January water + el bill: $170.24. Gas bill: 97.28.
In hot July, el + water = 213.19. (Combined because the City collects for both). sdr, care to tell us what your July numbers were?ParticipantAll:
Good point about UCSD enrollment growth. I checked SDSU’S numbers, but not UCSD. It always had a better academic record, and now has going for it a direct trolley, enabling students to live far away in cheaper neighborhoods. And as a Pacific coast location, proximity to Asian students plus emphasis on STEM subjects helps.
As I’ve always said, San Diego is the best of the CA coastal cities, enabling it to offset some of California’s disadvantages. And the UCSD neighborhood is perhaps the hottest of San Diego’s areas. So price trends there don’t necessarily indicate CA’s future.
PS: I once owned three condos at La Jolla Vista Townhomes–mostly student tenants. One I bought for $117,000 which Zillow now puts at over $700,000. I vaguely remember I happily sold at about $220,000.ParticipantOK, another factoid that may predict housing price trends by state. I believe where people are moving to or out of is one of the predictors of where RE will do well or poorly.
For a variety of reasons, college enrollments nationwide are falling: down 3.2% last fall, and 3.4% this fall, accordingly to the National Student Clearinghouse Research Center.
Anyway, the local St. George university is up this year by 1.85% to 12,266, and at a
nearby Cedar City college enrollments jumped by 20.65%.
Gee, I wonder how many of these new students are from CA?ParticipantYep, it’s not for softies.
BTW, it is not as hot as the fastest growing big city in the US: Phoenix.
Participant[quote=sdrealtor]Y’all covered it pretty well
Enjoy your new home. I’m enjoying my long term home and will continue to do so
for the fun of it I googled most overpriced cities in America. Guess which state has 3 out of 10 of the most overpriced real estate markets?
Interesting article, sdr, and thank you for sharing it. But what is it really revealing? It lists the most “overpriced” and “underpriced” cities. Top of the list of “overpriced” is Boise, Idaho, followed by Austin, Ogden, and Provo. But these are the very cities people are fleeing TO, thus boosting their prices of late.
The article then defines as “underpriced” Honolulu, Virginia Beach VA, Baltimore, and New York–the cities people are moving FROM of late, thus lowering their RE prices.
My whole thesis is to invest long term in where people are moving TO, not FROM. With the runup in prices in Boise, its prices are probably still lower than, say, Honolulu. As an aside, Boise has had the highest rent increase among cities according to one source. I would guess that its prices and rents are still lower than Honolulu or NYC.
FWIW, I’ve bought 3 condos since moving to St. George, all with prices and rents about half to one-third comparable properties in San Diego. The price per SF has risen 28% in St. George in the past one year.
I believe in looking at long term demographic trends. The factors that made SD a great place to invest are slowly being offset by the negatives.
I agree with most everyone here, to each his own, and I wish the best to all, whatever their choice.ParticipantThanks for all the feedback, both positive and negative.
First, I agree with the crotchety old man description. You young whippersnappers may some day come to the same conclusions as me.
To be clear, I thoroughly enjoyed living in San Diego and still miss aspects of it. But as a long-time real estate investor, I fear for its future and thank Piggington for the opportunity to warn others.
San Diego RE prices are having somewhat of a sugar-high due to factors that are largely temporary: unusually low mortgage rates, an influx of sellers of LA and Bay area properties, and the artificial shortage of buildable land (ocean, the border, Pendleton, mountains, etc.). Above all, CA politics are driving away families and blue-collar types who hope some day to own a house. This will likely accelerate, since CA is 2 to 1 Democrat vs. Republican. It was evenly balanced when I came here, and our housing prices were very similar to other big cities. Now the flight to cheaper states will accelerate.
I suspect Piggs are well above average in income, home ownership rates, and neighborhood quality. But it is a bit unseemly to laud the runup in prices and rents considering who it hurts. Yes, I know–I benefited as well during my decades of investing in San Diego RE. But RE investors should look at long-term demographic trends in their decision-making.Participant[quote=sdrealtor]Excellent the world’s eyes will be on you this weekend. Maybe next year you’ll really step it up and get an archery tournament
FYI they picked a low population location with liberal covid restrictions and they anticipate there will be less than half the usual number of participants. It was moved there last second from New Zealand and they obviously had very limited choices. Dont plan on this being anything more than a one or two off occurence[/quote]
I doubt they moved it from New Zealand at the “last second”. NZ has been totally locked down due to COVID for at least a year. Sources please.
One or two off occurence? It is already scheduled for next year.ParticipantYeah, St. George has such terrible weather and unsophisticated rubes and retirees. Nothing exciting here happens compared to sophisticated San Diego.
So why did the INTERNATIONAL World Championship Ironman Triathlon pick us for their annual event happening tomorrow, Saturday? 6,000 runners/swimmers/bicyclists.
In past years, they have picked Oahu, San Diego, and other worldwide locations. St. George–so boring.ParticipantNewsflash: they are called seasons.
Participant[quote=sdrealtor]8 pm in Saint George and currently 93 degrees. Such bliss[/quote]
Yep, it is hot here for 4 months of the year. But remember that because of our mountains and higher elevation, there is a 30-degree swing in temperatures between late afternoon and early mornings, when an 87 degree high means mornings in the 60’s.
BTW, it is hotter in lower elevation Phoenix and Las Vegas, which doesn’t seem to slow refugees from CA to those rapidly growing cities. -
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