[jstoesz]

1. Just because it is historically expensive, does not mean there are fundementals to support it. It just means it has been historically expensive. (it seems we are ripe for a black swan type of event when you hear logic like this, then again perhaps not)

2. Interest rates are not lower in SD than the rest of the country…certainly not substantially.

3. Property taxes are lower, but sales tax, gas tax, and a myriad of other taxes are much higher. So I am not convinced that this will make a drastic difference, if anything the overall tax burden in California is much higher than nearly every other state. And this has a largely depressive effect on home prices. So if anything home prices should be cheaper than the rest of the nation because of people’s already squeezed budgets.

4. I agree that prop 13 is screwing things up…can’t argue with you here. But I am unsure of the magnitude of difference it has. Everyone has to sell someday. Old people die, and young people have to come in and buy. If the young people can’t afford the home, then it won’t sell for as much. Volume of sales is not as important as people’s ability to pay.

5. This issue is only true in regards to people who are retiring here from someplace other than SD. People who are not retired have to be able to afford their house on the salary they have. Retirees do not. I am not sure of the number of wealthy migrating retirees and how it compares to other cities and states. What percentage of the market is this, 1%…maybe? No idea really. But, I agree that they will drive prices higher and will not be factored into the median wage numbers. But for the rest of us schmucks still working, weather has no bearing on our ability to afford a house.

Finally,
“Its one of the 10 most desirable metro areas and better things always sell for more than less desirable things. Why is that so hard to believe?

This of course begs the obvious question. If its not worth paying more to live here, why are YOU here?”

This is what the conversation always denigrates to. Let me break down your first statement. You are basically saying, “the weather is good, so forget the gravity of a budget. Everybody gets the money to pay for their homes, whether they can pay for food or not.” But I say, it does not matter how good the weather is, people can only pay, what they can pay. And saying the prices are affordable is like denying basic rules of accounting.

Let me break down the second statement. You are basically saying, “If you don’t agree with me, go home to whatever non-californian state you came from.”

I really like san diego, it is a great place. I love the bay, and the beaches. I love all the great established neighborhoods, and even some of the midcentury architecture. But there are so many slum neighborhoods for way to much money, and as my wife and I want to have kids in the next few years, we are actively looking elsewhere. Can you really advocate raising kids in this state. How can a wife stay home with the kids, and still be able to pay the mortgage. How can a family live in a good school district, have a yard, and afford to eat? You can’t unless you are in the top 3%. But both fortunately and unfortunately my wife and I are apart of the few people in this state with high paying stable jobs, and that is hard to replace at the moment. So we are stuck waiting for homes to become more in line with the laws of accounting, or a good job to open up in a place not so filled with speculators.

[jstoesz]

1. Just because it is historically expensive, does not mean there are fundementals to support it. It just means it has been historically expensive. (it seems we are ripe for a black swan type of event when you hear logic like this, then again perhaps not)

2. Interest rates are not lower in SD than the rest of the country…certainly not substantially.

3. Property taxes are lower, but sales tax, gas tax, and a myriad of other taxes are much higher. So I am not convinced that this will make a drastic difference, if anything the overall tax burden in California is much higher than nearly every other state. And this has a largely depressive effect on home prices. So if anything home prices should be cheaper than the rest of the nation because of people’s already squeezed budgets.

4. I agree that prop 13 is screwing things up…can’t argue with you here. But I am unsure of the magnitude of difference it has. Everyone has to sell someday. Old people die, and young people have to come in and buy. If the young people can’t afford the home, then it won’t sell for as much. Volume of sales is not as important as people’s ability to pay.

5. This issue is only true in regards to people who are retiring here from someplace other than SD. People who are not retired have to be able to afford their house on the salary they have. Retirees do not. I am not sure of the number of wealthy migrating retirees and how it compares to other cities and states. What percentage of the market is this, 1%…maybe? No idea really. But, I agree that they will drive prices higher and will not be factored into the median wage numbers. But for the rest of us schmucks still working, weather has no bearing on our ability to afford a house.

Finally,
“Its one of the 10 most desirable metro areas and better things always sell for more than less desirable things. Why is that so hard to believe?

This of course begs the obvious question. If its not worth paying more to live here, why are YOU here?”

This is what the conversation always denigrates to. Let me break down your first statement. You are basically saying, “the weather is good, so forget the gravity of a budget. Everybody gets the money to pay for their homes, whether they can pay for food or not.” But I say, it does not matter how good the weather is, people can only pay, what they can pay. And saying the prices are affordable is like denying basic rules of accounting.

Let me break down the second statement. You are basically saying, “If you don’t agree with me, go home to whatever non-californian state you came from.”

I really like san diego, it is a great place. I love the bay, and the beaches. I love all the great established neighborhoods, and even some of the midcentury architecture. But there are so many slum neighborhoods for way to much money, and as my wife and I want to have kids in the next few years, we are actively looking elsewhere. Can you really advocate raising kids in this state. How can a wife stay home with the kids, and still be able to pay the mortgage. How can a family live in a good school district, have a yard, and afford to eat? You can’t unless you are in the top 3%. But both fortunately and unfortunately my wife and I are apart of the few people in this state with high paying stable jobs, and that is hard to replace at the moment. So we are stuck waiting for homes to become more in line with the laws of accounting, or a good job to open up in a place not so filled with speculators.

[jstoesz]

SDR, I think you are missing some things about your dated concept. You keep saying that the 3X is dated, but how come it holds true for the vast percentage of America, what makes San Diego so different. I follow your interest rate and tax rate logic, but interest rates are the same all over the country, so this has no bearing on the national value disparity. If anything interest rates are higher in SD because the larger number of jumbo loans. Additionally, the fact that the rates are so low, just provides more reason to believe that the SD market is more volatile.

As to taxes, yes we have lower prop taxes via prop 13, but when you buy a new home your first years rate is much more in line with the rest of the country. It only becomes more reasonable when you have owned your home for many years and there is an appreciation bubble. So this does not help new or repeat buyers from a cash flow standpoint (and buyers set the price of a home, not the sellers)

To your 75th percentile issue, this is not true nationally. The Median income can not responsibly afford the median home, and that is largely a California concept. The reason why the 35+ percent of people rent nationally is not necessarily because they can not afford to buy something on paper, but for a variety of other reasons. People can not save for a down payment, they have horrible credit/debt, they do not want to buy for mobility reasons, and a host of others.

So in conclusion, there is no good reason (other than rampant speculation and government intervention) as to why San Diego is 214th out of 225 metro areas in terms of affordability.

[jstoesz]

SDR, I think you are missing some things about your dated concept. You keep saying that the 3X is dated, but how come it holds true for the vast percentage of America, what makes San Diego so different. I follow your interest rate and tax rate logic, but interest rates are the same all over the country, so this has no bearing on the national value disparity. If anything interest rates are higher in SD because the larger number of jumbo loans. Additionally, the fact that the rates are so low, just provides more reason to believe that the SD market is more volatile.

As to taxes, yes we have lower prop taxes via prop 13, but when you buy a new home your first years rate is much more in line with the rest of the country. It only becomes more reasonable when you have owned your home for many years and there is an appreciation bubble. So this does not help new or repeat buyers from a cash flow standpoint (and buyers set the price of a home, not the sellers)

To your 75th percentile issue, this is not true nationally. The Median income can not responsibly afford the median home, and that is largely a California concept. The reason why the 35+ percent of people rent nationally is not necessarily because they can not afford to buy something on paper, but for a variety of other reasons. People can not save for a down payment, they have horrible credit/debt, they do not want to buy for mobility reasons, and a host of others.

So in conclusion, there is no good reason (other than rampant speculation and government intervention) as to why San Diego is 214th out of 225 metro areas in terms of affordability.

[jstoesz]

SDR, I think you are missing some things about your dated concept. You keep saying that the 3X is dated, but how come it holds true for the vast percentage of America, what makes San Diego so different. I follow your interest rate and tax rate logic, but interest rates are the same all over the country, so this has no bearing on the national value disparity. If anything interest rates are higher in SD because the larger number of jumbo loans. Additionally, the fact that the rates are so low, just provides more reason to believe that the SD market is more volatile.

As to taxes, yes we have lower prop taxes via prop 13, but when you buy a new home your first years rate is much more in line with the rest of the country. It only becomes more reasonable when you have owned your home for many years and there is an appreciation bubble. So this does not help new or repeat buyers from a cash flow standpoint (and buyers set the price of a home, not the sellers)

To your 75th percentile issue, this is not true nationally. The Median income can not responsibly afford the median home, and that is largely a California concept. The reason why the 35+ percent of people rent nationally is not necessarily because they can not afford to buy something on paper, but for a variety of other reasons. People can not save for a down payment, they have horrible credit/debt, they do not want to buy for mobility reasons, and a host of others.

So in conclusion, there is no good reason (other than rampant speculation and government intervention) as to why San Diego is 214th out of 225 metro areas in terms of affordability.

[jstoesz]

SDR, I think you are missing some things about your dated concept. You keep saying that the 3X is dated, but how come it holds true for the vast percentage of America, what makes San Diego so different. I follow your interest rate and tax rate logic, but interest rates are the same all over the country, so this has no bearing on the national value disparity. If anything interest rates are higher in SD because the larger number of jumbo loans. Additionally, the fact that the rates are so low, just provides more reason to believe that the SD market is more volatile.

As to taxes, yes we have lower prop taxes via prop 13, but when you buy a new home your first years rate is much more in line with the rest of the country. It only becomes more reasonable when you have owned your home for many years and there is an appreciation bubble. So this does not help new or repeat buyers from a cash flow standpoint (and buyers set the price of a home, not the sellers)

To your 75th percentile issue, this is not true nationally. The Median income can not responsibly afford the median home, and that is largely a California concept. The reason why the 35+ percent of people rent nationally is not necessarily because they can not afford to buy something on paper, but for a variety of other reasons. People can not save for a down payment, they have horrible credit/debt, they do not want to buy for mobility reasons, and a host of others.

So in conclusion, there is no good reason (other than rampant speculation and government intervention) as to why San Diego is 214th out of 225 metro areas in terms of affordability.

[jstoesz]

SDR, I think you are missing some things about your dated concept. You keep saying that the 3X is dated, but how come it holds true for the vast percentage of America, what makes San Diego so different. I follow your interest rate and tax rate logic, but interest rates are the same all over the country, so this has no bearing on the national value disparity. If anything interest rates are higher in SD because the larger number of jumbo loans. Additionally, the fact that the rates are so low, just provides more reason to believe that the SD market is more volatile.

As to taxes, yes we have lower prop taxes via prop 13, but when you buy a new home your first years rate is much more in line with the rest of the country. It only becomes more reasonable when you have owned your home for many years and there is an appreciation bubble. So this does not help new or repeat buyers from a cash flow standpoint (and buyers set the price of a home, not the sellers)

To your 75th percentile issue, this is not true nationally. The Median income can not responsibly afford the median home, and that is largely a California concept. The reason why the 35+ percent of people rent nationally is not necessarily because they can not afford to buy something on paper, but for a variety of other reasons. People can not save for a down payment, they have horrible credit/debt, they do not want to buy for mobility reasons, and a host of others.

So in conclusion, there is no good reason (other than rampant speculation and government intervention) as to why San Diego is 214th out of 225 metro areas in terms of affordability.

[jstoesz]

why is median income a useless metric in a supply constrained market? I don’t follow.

People who live there have to eat right, they have jobs right. Your friend who makes over 150k a year is factored into that median income, just like everybody else.

[jstoesz]

why is median income a useless metric in a supply constrained market? I don’t follow.

People who live there have to eat right, they have jobs right. Your friend who makes over 150k a year is factored into that median income, just like everybody else.

[jstoesz]

why is median income a useless metric in a supply constrained market? I don’t follow.

People who live there have to eat right, they have jobs right. Your friend who makes over 150k a year is factored into that median income, just like everybody else.

[jstoesz]

why is median income a useless metric in a supply constrained market? I don’t follow.

People who live there have to eat right, they have jobs right. Your friend who makes over 150k a year is factored into that median income, just like everybody else.

[jstoesz]

why is median income a useless metric in a supply constrained market? I don’t follow.

People who live there have to eat right, they have jobs right. Your friend who makes over 150k a year is factored into that median income, just like everybody else.

[jstoesz]

I mentioned that the link was “outdated but still relevant”

Do you think that san diego, has bucked this trend and is now affordable with regards to the fundamentals or the prices in the rest of the country?

If you click on the following link you will load a spreadsheet showing San Diego in 1st qtr 2010 is ranked 214 of 225 metro areas for affordability.

http://www.nahb.org/fileUpload_details.aspx?contentID=535

So clearly California’s are not getting paid more to cover their higher cost of living.

And if you go back to my first link showing the San Diego zip codes next to median home prices you get a pretty good idea of how out of whack most SD zip codes really are.

http://realestate.aol.com/San_Diego-CA-neighborhood

Is anyone disagreeing with this simple point? That there are no “good deals” in SD (from a fundamental standpoint), There are only comparatively lower priced homes that you could hopefully goad some sucker into paying more for later on…ie speculating!

Oh and I agree, that table does look ridiculous, but I guess for entirely different reasons.

[jstoesz]

I mentioned that the link was “outdated but still relevant”

Do you think that san diego, has bucked this trend and is now affordable with regards to the fundamentals or the prices in the rest of the country?

If you click on the following link you will load a spreadsheet showing San Diego in 1st qtr 2010 is ranked 214 of 225 metro areas for affordability.

http://www.nahb.org/fileUpload_details.aspx?contentID=535

So clearly California’s are not getting paid more to cover their higher cost of living.

And if you go back to my first link showing the San Diego zip codes next to median home prices you get a pretty good idea of how out of whack most SD zip codes really are.

http://realestate.aol.com/San_Diego-CA-neighborhood

Is anyone disagreeing with this simple point? That there are no “good deals” in SD (from a fundamental standpoint), There are only comparatively lower priced homes that you could hopefully goad some sucker into paying more for later on…ie speculating!

Oh and I agree, that table does look ridiculous, but I guess for entirely different reasons.

[jstoesz]

I mentioned that the link was “outdated but still relevant”

Do you think that san diego, has bucked this trend and is now affordable with regards to the fundamentals or the prices in the rest of the country?

If you click on the following link you will load a spreadsheet showing San Diego in 1st qtr 2010 is ranked 214 of 225 metro areas for affordability.

http://www.nahb.org/fileUpload_details.aspx?contentID=535

So clearly California’s are not getting paid more to cover their higher cost of living.

And if you go back to my first link showing the San Diego zip codes next to median home prices you get a pretty good idea of how out of whack most SD zip codes really are.

http://realestate.aol.com/San_Diego-CA-neighborhood

Is anyone disagreeing with this simple point? That there are no “good deals” in SD (from a fundamental standpoint), There are only comparatively lower priced homes that you could hopefully goad some sucker into paying more for later on…ie speculating!

Oh and I agree, that table does look ridiculous, but I guess for entirely different reasons.

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