[PerryChase]

I think that it’s more a matter of the rate of turnover and the number of transactions rather than expensive vs. less expensive neighborhoods.

Expensive areas have less turnover. They are built-out so they don’t have as many new comers.

In the end it’s going to come down to the relative desirability of the “nice” neighborhoods in relation to the other neighborhoods. They are all connected.

For example, Nordstrom might be able to command 4 times the prices of Target. But if Target drop their prices, Nordstrom will have to eventually drop their prices as well to keep the value/price ratio in balance. That’s despite the fact that Nordstrom customers are well-to-do. Otherwise, Nordstrom will slowly loose market share and go bankrupt.

Actually, if you look at the history of run up, you’ll see that many of the lower priced properties in less desirable areas quadrupled. Expensive coastal properties also quadrupled. But upper middle-class areas such as Carmel Valley and Rancho Bernardo only more than doubled. So, now looking at the downturn, a larger drop in less-expensive neighborhood is just giving back at the same rate of appreciation.

Interesting topic. Great business school project. One could review all the past sales and analyze rates of appreciation and depreciation by price groups.

[PerryChase]

I agree with you, MANmom. I’m not buying either.

Resellers can afford to hold on longer because they don’t have quarterly earnings target to meet. It takes several years of a down market to wear-down existing homeowners.

There’s also a good chance that builders will pay the Mello-Roos in new projects. See related thread:

http://piggington.com/pardee_homes_drops_mello_roos_in_new_development_in_moorpark_ven

The LA market is stronger than San Diego’s yet you’re seeing this kind of change there. My feeling is that builders won’t drop Mello Roos in existing developments. They’ll close them out then start new projects next door that interestingly don’t have Mello-Roos to avoid upsetting existing homeowners. Can’t wait to see when that happens in San Diego.

[PerryChase]

MANmom, 1995 was a different time. I remember well. At that time you had to rely on the Realtor to drive you to houses from print-outs with no pictures. Today you can just review the MLS listings yourself (for example on ziprealty).

I think it’s going to be a slow ride down (6 to 7 years). In the mean time, review all the listings in a neighborhoods that you like. You can set it to receive an email when new listings pop up — there aren’t too many.

Over time, you’ll get a good idea of the homes that come on and off the market. You’ll also get very familiar with the neighborhoods where you wish to live. When the time is right, you’ll know it. If you’ve got a nice comfortable place to live right now, you can watch the market slowly evolve. Take the emotion out of buying and you’ll know it when you have a great buy. Patience is key.

[PerryChase]

“After monitoring San Diego County’s falling home prices, sluggish sales and a surge in foreclosures, real estate analysts are warning that the potential for mortgage fraud is on the rise.”

http://www.signonsandiego.com/uniontrib/20070422/news_lz1h22lender.html

http://www.signonsandiego.com/uniontrib/20070422/news_1h22prevent.html

Thanks to ocrenter for posting on his blog.
http://bubbletracking.blogspot.com/2007/04/union-tribune-finally-caught-on.html

[PerryChase]

Builders are usually the first ones to lower prices just enough to move inventory.
Is Fieldstone competitive with other builders and resales in $4S? I don’t follow that neighborhood, but I have a feeling that resellers are still high (pun intended).

[PerryChase]

Discovery is one of the best development in Cortez Hill, in my view. It’s a well done Bosa development.

[PerryChase]

How far is the Sprinter station from those houses? It might be a plus for some commuters.

[PerryChase]

Has anyone tried the Orange extract organic termite treatment? And what do you think about it compared to the chemical tenting?

[PerryChase]

SD Realtor, are you talking about Acqua Vista? That building will be hammered real hard in my view. The valet parking thing (can’t self-park because they don’t have enough spaces) will kill many deals. This is middle-of-the-road building, not a high-end luxury property. It was an after-thought apartment building that went condo.

[PerryChase]

SD Realtor, there goes your Downtown sale. 😉

[PerryChase]

This is an old condo with $393/mo HOA.

http://www.sdlookup.com/MLS-076014470-1640_10th_Ave_107_San_Diego_CA_92101

I wouldn’t touch it with a 10 ft pole. I would not be surprised to see this or similarly old units drop to $200k or less. Rent and save your money.

——–

I’m exaggerating a bit here. Cortez Hill is a good area of Downtown (better than East Village, IMO) so compared to other properties at 1000sf, this one is not bad. But, realistically, you should wait another few years. I bet that you’ll be pleasantly surprised at what you could afford in a couple of years. Renting is the best option for now.

[PerryChase]

HOA Downtown is $500/mo or more. Combine that with property taxes and you can easily hit $1200/month before even touching the interest and principal payment.

I think that once Downtown gets built-up, the lower end apartments (let’s call them what they are) will sell for about rental value, or below original builder prices.

There are so many rentals Downtown now that it’s stupid to buy. Unlike single family homes where school district and other features call for a premium, you can easily rent an apartment Downtown that is right next door to one that is for sale.

For example, you may not be able to rent a 3000sf SFR in a certain neighborhood with a certain school district. But you can rent an apartment in virtually any building Downtown.

[PerryChase]

I’m with bugs on the point that “stability” is over-rated. It’s mostly what the parents want for their kids rather than what the children need.

I moved just about every 2 years with my dad working overseas in different countries. My parents were busy and I didn’t see them a lot. I went to independent summer camps, sometimes for the whole summer with other kids my age. As a teenager I used to take the bus/subway and explore the cities we lived in (that was in the early 80s and that might be seen as dangerous today). I think I turned out OK despite not have a “stable” childhood. I saw the world at an early age and I’m grateful for that. To me, the kids who grow up in sanitized suburbia are missing out on so much.

If I had kids, I’d take them on summer and winter travel around the world — see the jungles of South America, the lions and elephants of Africa, the bustling cities of Asia and the culture of Europe. Somehow, I’d take them out of their “safe” environments rather than lock them in there.

[PerryChase]

4Sbuyers2002, point well taken.

As I said, you’ll be able to weather the downturn just fine. You still have plenty of equity to get through the slump.

Several things to note about your calculations: 1) opportunity cost of down payment, 2) gardening/maintenance costs, and 3) mello-roos is not tax deductible (although many do so anyway).

[PerryChase]

4Sbuyer2002, you bought early enough that I think that you’ll be fine and you can weather the downturn.

However, you did not buy early enough to be insulated. Your cost of ownership is still higher than rent and someone who buys a home similar to yours for the same price in 2009/2010 would be financially better off. He would have had more time to save and invest the difference between owning and renting.

For sure, you’re doing a lot better than the people who bought 2004 through 2006.

———–

I did look at the Fieldstone houses just for fun — I hate master planned communities but I did it for my brothers and other relatives as I’m now the family’s real estate expert 🙂

I too noticed that Fieldstone homes were boring (compared to other builders) and the models homes seemed less well done. It was a while ago but, if my memory serves me right, the second floor ceilings seemed lower so, while the houses are large, they didn’t feel inviting to me. Another thing is that Fieldstone houses have bedrooms but few bathrooms.

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