OK, Piggs, how do you see the OK, Piggs, how do you see the next couple of years for the San Diego housing market?
It looks like 2012 was the year the Doom & Gloomers were finally proven wrong. Between microscopic interest rates, banks holding inventory off the market, and Gov/Fed doing everything they can to raise asset prices (especially houses), we clearly had a big rally in prices. Great if you own all you need. Sucks if you’re trying to buy. (I own and I’m trying to buy more, so I’m sort of neutral on this).
I think the boom continues, though maybe at a slower rate, for a couple more years, based on supply and demand.
Supply: Limited supply. The homeowners who were going to default mostly already defaulted. Banks holding on to shadow inventory. Prices aren’t high enough to make people sell and retire to Arizona. Boomer retirement and house-selling wave will be spread out over next decade or more.
Demand: Lots of pent up demand. Crazy Ben low interest rates + low downpayment requirement –> Anybody with a decent job can theoretically buy (if they could find a house to buy). Prices still about about 20% below peak while rents are at peak. Most of all, the psychology has changed – people seem more scared of not buying than of buying. Any decent and well-priced property that hits the market is snapped up before you can blink twice.
Yeah, Fiscal Cliff and Europe recession and all that might make a difference at the margin. But I don’t think they derail housing, which feels like it has gone from being the weakest sector in the economy to the strongest. Only three things are likely to derail housing: (1) Inventory rushes in, (2) Interest rates shoot up, (3) Major recession in the US. I don’t see any of these happening soon.
P.S. I’m not a housing booster. I actually would prefer if prices drop a bit so I could buy more.
NotCranky
November 5, 2012 @
7:00 AM
Modest price gains regardless Modest price gains regardless of inventory. To the moon, no.
UCGal
November 5, 2012 @
8:22 AM
I voted stable. I think I voted stable. I think inventory will start becoming more normalized because those that were holding out for lower prices are going to give up. They’ll either sell for all the normal reasons (change in job location, move up to bigger house, downsizing when empty nest) or they won’t. But the hopes of BIG profits on the house are gone and people are becoming more resigned to this.
On the buyers side I think too many people are gun shy and/or aware of a true bubble forming again in the near term. So buyers (with exceptions) aren’t going to be saying to themselves “They don’t make any more land” and “I better get in now before I’m priced out”. Which were said a LOT during the run up of the last bubble.
I don’t see a bubble again in the next 2 years (2013/2014 is what the poll says). So I voted stable.
SD Realtor
November 5, 2012 @
8:41 AM
It will be interest rate It will be interest rate driven. As long as rates stay in check the housing market will continue to vary from stable to modest appreciation depending on the type and area.
HenryPP
November 5, 2012 @
8:01 PM
Yes, interest rates are Yes, interest rates are playing a huge role. But right now I think the tiny inventory is the biggest factor. Some people are all-cash buyers, so interest rates might not affect them, but lack of inventory does.
What ticks me off is that lack of inventory is making some people desperate. So they bid more than they really should, ruining things for those of us who want to stay prudent.
scaredyclassic
November 5, 2012 @
9:03 PM
i didn’t vote because im i didn’t vote because im always wrong.
birmingplumb
November 6, 2012 @
5:08 AM
Everybody wants to live in Everybody wants to live in San Diego. Nobody wants to drive from Lake Elsinore or San Jacinto. I think the recovery will continue because I think the military cuts will be reduced. I think the growth of beloved Asian population has improved the social mix as well as set an example for school children on the benefits of hard work and family values and commitment to family. Any way you cut it, San Diego is about the best place I have ever worked/lived and I have caused my 3 children to relocate to San Diego California. Add the wise and sincere posters on this forum who help in any way they can with their thoughtful heart felt replies and advise and you find another reason San Diego will continue to grow and continue to lead. God Bless San Diego and God Bless this forum and its members.Motown
November 5, 2012 @ 12:47 AM
OK, Piggs, how do you see the
OK, Piggs, how do you see the next couple of years for the San Diego housing market?
It looks like 2012 was the year the Doom & Gloomers were finally proven wrong. Between microscopic interest rates, banks holding inventory off the market, and Gov/Fed doing everything they can to raise asset prices (especially houses), we clearly had a big rally in prices. Great if you own all you need. Sucks if you’re trying to buy. (I own and I’m trying to buy more, so I’m sort of neutral on this).
I think the boom continues, though maybe at a slower rate, for a couple more years, based on supply and demand.
Supply: Limited supply. The homeowners who were going to default mostly already defaulted. Banks holding on to shadow inventory. Prices aren’t high enough to make people sell and retire to Arizona. Boomer retirement and house-selling wave will be spread out over next decade or more.
Demand: Lots of pent up demand. Crazy Ben low interest rates + low downpayment requirement –> Anybody with a decent job can theoretically buy (if they could find a house to buy). Prices still about about 20% below peak while rents are at peak. Most of all, the psychology has changed – people seem more scared of not buying than of buying. Any decent and well-priced property that hits the market is snapped up before you can blink twice.
Yeah, Fiscal Cliff and Europe recession and all that might make a difference at the margin. But I don’t think they derail housing, which feels like it has gone from being the weakest sector in the economy to the strongest. Only three things are likely to derail housing: (1) Inventory rushes in, (2) Interest rates shoot up, (3) Major recession in the US. I don’t see any of these happening soon.
P.S. I’m not a housing booster. I actually would prefer if prices drop a bit so I could buy more.
November 5, 2012 @ 7:00 AM
Modest price gains regardless
Modest price gains regardless of inventory. To the moon, no.
November 5, 2012 @ 8:22 AM
I voted stable. I think
I voted stable. I think inventory will start becoming more normalized because those that were holding out for lower prices are going to give up. They’ll either sell for all the normal reasons (change in job location, move up to bigger house, downsizing when empty nest) or they won’t. But the hopes of BIG profits on the house are gone and people are becoming more resigned to this.
On the buyers side I think too many people are gun shy and/or aware of a true bubble forming again in the near term. So buyers (with exceptions) aren’t going to be saying to themselves “They don’t make any more land” and “I better get in now before I’m priced out”. Which were said a LOT during the run up of the last bubble.
I don’t see a bubble again in the next 2 years (2013/2014 is what the poll says). So I voted stable.
November 5, 2012 @ 8:41 AM
It will be interest rate
It will be interest rate driven. As long as rates stay in check the housing market will continue to vary from stable to modest appreciation depending on the type and area.
November 5, 2012 @ 8:01 PM
Yes, interest rates are
Yes, interest rates are playing a huge role. But right now I think the tiny inventory is the biggest factor. Some people are all-cash buyers, so interest rates might not affect them, but lack of inventory does.
What ticks me off is that lack of inventory is making some people desperate. So they bid more than they really should, ruining things for those of us who want to stay prudent.
November 5, 2012 @ 9:03 PM
i didn’t vote because im
i didn’t vote because im always wrong.
November 6, 2012 @ 5:08 AM
Everybody wants to live in
Everybody wants to live in San Diego. Nobody wants to drive from Lake Elsinore or San Jacinto. I think the recovery will continue because I think the military cuts will be reduced. I think the growth of beloved Asian population has improved the social mix as well as set an example for school children on the benefits of hard work and family values and commitment to family. Any way you cut it, San Diego is about the best place I have ever worked/lived and I have caused my 3 children to relocate to San Diego California. Add the wise and sincere posters on this forum who help in any way they can with their thoughtful heart felt replies and advise and you find another reason San Diego will continue to grow and continue to lead. God Bless San Diego and God Bless this forum and its members.Motown