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(former)FormerSanDiegan
ParticipantI meant to say a decade after the trough before prices get back to the peak.
Perry – Thanks for clarifying. Now it makes more sense.
By the way, regarding the comment that you are long on RE. People need to realize that when you buy a house near the bottom of the market (e.g. mid-1990’s) it might make sense to keep it, especially with CA’s property tax structure.
n_s_r is right in regard to pre-2001 purchases. People who bought during that time should do well under most scenarios.
ParticipantPerry –
Can you elaborate on expectation of 2001-2002 prices, followed by a decade of stagnation ? What scenario are you assuming for inflation.If I read you correctly this means that you expect to see the same prices in about 2018 that we had in 2001 (assuming 2 years from now to initially hit bottom). Do you really expect this ? I find this not only implausible, but bordering on ridiculous.
According to Rich’s charts, the median home price to income ratio was BELOW the long-term average in 2001. If they are at that level 17 years later they would be off the charts, assuming any inflation at all.
ParticipantMy guess is that 4Q 2006 GDP isn’t going to be so bad after all.
Participant$150k for a Mission Valley condo is about right. What’s so different today from 5 years ago? Not much. Houses cost a lot more but income have stagnated.
Perry. Even those stagnate incomes rose by nearly 20% between 2000-2005. So, the weather hasn;t changed much, but the value of a buck has.
ParticipantThis stock market is operating on a set of fundamentals that I’m just not seeing.
Do you see double-digit earnings growth as part of the fundamentals or do you just not look for it ?
ParticipantCheck this one out …
2443 Burgener Blvd, 92110
sold 10/25/04 for $725K
sold 10/3/05 for $790KForeclosure in June 2006.
Countrywide took possesion at a recorded value of value of 670K.
Originally priced at 614K in Fall ’06
Now priced at 584,900.A 25% drop !!!
ParticipantOnly 48 trading days ’til Spring.
ParticipantInsurance companies are notorious for low-balling the cost of building. My agent tried to convince me that my just-remodeled house (in 2001)could be replaced for about $95 per square foot.
Costs can vary widely, depending on the amenities and items such as number of bathrooms, etc. A bathroom is much more expensive per square foot than say a bedroom. Assuming a single custom home (as opposed to builder tract) for middle-of-the-road typical 2400 s.f. in SD I would guess about $150 per square foot these days. Assuming a general contractor. If you acted as your own GC and managed all the subs, it could be reduced by perhaps 20% if you are experienced. For the major builders the costs are significantly lower because of leverage in the size and continuity of the jobs for the subcontractors. Additionally, it is easier for the subcontractors to work on a dozen consecutive similar projects than a dozen completely different ones with differing levels of plan detail and customer quirks.
ParticipantI love the precision : 6.42 million not 6.41 or 6.43.
ParticipantDo we need to start a separate thread titled “dueling sD ReAlToRs” ?
ParticipantOur starter home was a 3BR/1 Bath house in Clairemont. It was old and small but reasonably well-maintained. Not a complete $hithole. My family (all in the Midwest) thought I was crazy to drop $160K on what would have been a $45K property back there. The house was definitely much less than we wanted, only one bathroom, which sucks, about 1100 square feet and the washer/dryer were outside. But it was what we could afford … with two professional salaries in technical fields. We bought in 1996, probably at the high point of home affordability in the last 3 decades in the area. The old affordability index (based on 30-year fixed, 20% down) was something like 40-50% in San Diego at that time.
(I hope this doesn’t sound too much like the old man saying “back when I was your age …”)So, my point is … Even at the best time to buy a house in San Diego in the last twenty years, a SFR starter home was much less than desirable for relatively high-income dinks (no kids at that time). I hope this provides some perspective and that people don’t expect to be able to waltz in at the coming bottom in housing and buy their 2400 s.f. energy efficient coastal view dream home as their first house. (But perhaps those who cashed out in 2004-2006 will
… maybe).
Participantbubble_contagion –
You cannot say it’s a landlord market because your example doesn’t apply to all landlords.
Then, you cannot call it a seller’s market because your justification does not apply to all sellers either. I was simply using the same flawed logic that you used to call it a seller’s market. Anyway, I’m glad we finally agree.
ParticipantPD – I think that your piece captures the essence of this moment in SD real estate history. Bravo !
ParticipantI agree 100% Daisy.
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