do you think it is even worth it to buy a home in sd? (San Diego: real estate, 2015)

[flyingeaglesinsky]

i just get the creepy feeling the bubble is bursting and if i buy a condo or home now, the home will depreciate over the next couple years and ill lose money.

our real estate agent told us to pay the interest of the loan first. if that happens and the value depreciates, were going to lose a lot of money.

what do you think? feel free to pm me. i would love some honest answers. i dont have anyone on my side and have to figure this out myself. i want a home, but i get the feeling that no one will pay this much for these homes and the home values will fall. already i see people moving out of state and fed up on these forums. i realize people want to make money off their homes, but if anyone can pm me some info, well id be much obliged.

thanks for any help.

[SEAandATL]

Actually, you may want to wait until next year since the housing market should hit the bottom then, if not in 2009. Even if you bought it now, I don't think you will lose as much as you would have if you bought it a few years ago. I'm in that situation myself where I bought a condo in 2004, and I was wanting to sell it at the end of this year, but now the property values are $30-40K less than what I bought it for (which is one of the reasons why I'm frustrated and bitter about San Diego). Now, I'm just going to have to hold on to it and rent it out while I get transferred to Japan.

[kettlepot]

The Bubble isn't bursting, it's "Bursted." A lot of the depreciation that's going to happen has already happened. You've already avoided the worst of it. Other than certain property types such as condo conversions because of quality, condos downtown because of supply, and houses in the most distant suburbs because of the cost of driving, most properties don't have much downside risk left. Probably only 5% more than what has occurred. If you wait a year prices won't be higher and might be lower by a few percentage points.

If you buy now and have to sell before the next real estate up cycle begins in 2011, you'll lose money. If you sell after that, you'll come out with equity, and people will be praising your prescience.

Ignore the people who are talking about 20% - 40% declines from today's levels. It just isn't going to happen.

Most likely scenario: basically flat to 5% lower between now and 2011, then average to below average appreciation after that per year (3%-6%).

[NYSD1995]

Originally Posted by flyingeaglesinsky

i just get the creepy feeling the bubble is bursting and if i buy a condo or home now, the home will depreciate over the next couple years and ill lose money.

You don't lose money unless you sell the property. Since you are going into this with a long-term view (I hope) you shouldn't be worrying about selling a house you haven't bought.

That said being upside-down on 100% financed interest-only piggyback ARM loans is probably not a good idea.

If you have the cash to take advantage of the soft market (and cash is the only way you will get the deals right now) I would definitely be buying. If you don't have cash OR the income to make it happen comfortably, I would be very, very careful.

[SEAandATL]

Yeah, the days of "flipping" the house after a few years and making a huge profit are over. That was the first half of this decade. My intention was to sell after a few years, but now I have to hold on to it for possibly at least another 8-10 more years.

[blueyes721]

Good advice from y'all...I recently moved from SD to Nashville....
the market here is doing very well. Nashville is a great town..very mild weather...but weather...real rain! real green hills!
....the people are awesome...there really is ~southern hospitality~

[jselby]

Dear Flyingeagleinsky,

It's really sad that you don't feel you have anyone on your side right now. Your real estate agent should be on your side and ONLY your side. I sell real estate in San Diego. Most of my business comes from referrals. The top agents here in San Diego will tell you that the bulk of our business comes from the people we have satisfied in the past. If your agent is in this for the short-term then find another agent! But, either way, you have to be with someone who is there to represent YOU and protect your better interest regardless of the dollars that go into his/her pocket.

That said...I don't know what kind of loan you are talking about getting. If its an adjustable, forget it. But, if it's an interest only, fixed for 10 years, you should be pretty safe that your real estate, purchased now, will appreciate in 10 years so that you can pay off the existing loan and still have some equity left over.

Historically, San Diego hasn't seen a 10 year slump. So, assuming that the last 2 years would be considered part of the slump we are in, then how many bad years are left? Of course, that would be up to the crystal ball but 10 (or 8 more) would be defying our historical stats.

Sassberto it right when he says you only loose when you sell it...and buying now is a great time. It's definitely a buyers market with all kinds of concessions being given that benefit the buyers. Assuming that this purchase will be "the roof over your head" and not just a speculative investment, then you can stay put until the market works for you. If you look at the last 50 years of San Diego real estate...then you will see...work for you it will! You can put money in real estate all over this country, but there are not many places where you can be living in Paradise while you wait for your money to grow. Good luck!

[SEAandATL]

If you look within the last 20 years than you will see a clear cycle of booms slumps, and recoveries. About 1985-89 there was a boom in which houses appreciated 15-20 percent each year, much like the 2001-05 period. From 1990-95 there was a slump, much like we're experiencing now. Then 1995-2000 was a recovery period before the next boom started in 2001. Based on this cycle, the slump should end about 2010 or 11, then recover slowly until 2015, and the next boom from 2016-2020.

[Jonah1979]

I would just wait...you always want to buy at the lowest level as you can. You NEVER buy realestate while prices are dropping...wait til you see it level off then start to go up. Buy then, and you'll watch your investment grow from day one.

You'll see some say that you should just buy now if you can afford the payments because over the long run it will go back up and beyond what you paid for it. While this may be true, why pay $450K when you could wait a year and perhaps pay $375k and use the extra money you have every month on other investments or savings.

I hope this helps....

Originally Posted by flyingeaglesinsky

i just get the creepy feeling the bubble is bursting and if i buy a condo or home now, the home will depreciate over the next couple years and ill lose money.

our real estate agent told us to pay the interest of the loan first. if that happens and the value depreciates, were going to lose a lot of money.

what do you think? feel free to pm me. i would love some honest answers. i dont have anyone on my side and have to figure this out myself. i want a home, but i get the feeling that no one will pay this much for these homes and the home values will fall. already i see people moving out of state and fed up on these forums. i realize people want to make money off their homes, but if anyone can pm me some info, well id be much obliged.

thanks for any help.

[sdurbanite]

I'm with everyone else here - just wait a bit longer. I don't think you see the bottom fall out like other have been saying for the past 3 years! We should, however, see a gradual decrease before it begins to stablize again. This is San Diego and we'll never see average home prices drop below $400,000 again - ever.

We're not like other sunbelt cities such as Houston, Dallas, San Antonio, Charlotte or Atlanta, where average home prices are so low it's disgusting.