Will Carless at voiceofsandiego.org has written a piece about an apparent exodus of wealthy investors from San Diego real estate. It has an interesting bit of data: 18% of San Diego home purchases last year were made for investment purposes. (This is out-and-out investing, not the stealth speculation I discussed last week).
Elsewhere in the article, various financial advisors tell us that it may be a good time to unload those alligators. "If you have an investment property, this is a wonderful time to get the heck out," counsels one. I completely agree… though I would posit that last year would have been an even more wonderful time.
How do we distinguish
How do we distinguish between “educated investors” and “herd-like speculators”? It seems that there is still plenty of buying, even sight unseen, by out-of-state investors/speculators in Texas and Utah. Are these buyers getting their info from highly paid advisors, or late night infomercials? The articles don’t seem to tell us which group these investors fall into, only that they are from coastal states.
My landlord would fit the bill. He loves RE, and since SD is overpriced, he moved on to other states. So did my friend, who took out a HELOC on her Poway home to buy flippable property in Phoenix (and now lives there). Neither of these people fit the profile of the wealthy.
Did the wealthy leave RE entirely? Are they in commodities now, or the overvalued stock market?