House prices erode further in San Diego! (Brea, Nice: spring break, lender)

[socketz]

Cost of living aside, San Diego is an incredible place to live. Texas is ok, hell, I'm moving there, but it doesn't compare to SD for day to day life.

Recall the last downturn when General Dynamics laid off Engineers in droves. Most of them stayed put and took any type of work they could in order to stay here. San Diego is a place people believe in and want to live (allthough the recent exodus to TX is alarming). Can we support $350 a sq/ft, no. But $300 is realistic. Again, we have some pretty mature industries here such as Defense/SPAWAR, Huge Wireless, Biomed/Tech, the Golf industry has alot of Corp HQs here, Tourism is strong - and we border OC, which is booming economically still.....are all these companies going to move out ? If things start heading south, or even one large one leaves, I think the city will get involved and create incentives to lure more business here. Exactly the way they revitalized the Shipbuilding industry. I guess you can say I'm bullish on the area. It will drop for at least qtr or 2, but stabilize.

[Need_affordable_home]

Originally Posted by socketz

Cost of living aside, San Diego is an incredible place to live. Texas is ok, hell, I'm moving there, but it doesn't compare to SD for day to day life.

Recall the last downturn when General Dynamics laid off Engineers in droves. Most of them stayed put and took any type of work they could in order to stay here. San Diego is a place people believe in and want to live (allthough the recent exodus to TX is alarming). Can we support $350 a sq/ft, no. But $300 is realistic. Again, we have some pretty mature industries here such as Defense/SPAWAR, Huge Wireless, Biomed/Tech, the Golf industry has alot of Corp HQs here, Tourism is strong - and we border OC, which is booming economically still.....are all these companies going to move out ? If things start heading south, or even one large one leaves, I think the city will get involved and create incentives to lure more business here. Exactly the way they revitalized the Shipbuilding industry. I guess you can say I'm bullish on the area. It will drop for at least qtr or 2, but stabilize.

San Diego probably is a better location if you ask someone's opinion. The facts may also speak for themselves when comparing how much there is to do. However is Diego worth the 4x price over Dallas(or other cities in TX) this is another topic entirely. Theres an exodus because many Diegoans are simply priced out and cant stay even if they wanted to! The median square foot price isnt $350 anymore but more like $310 now. The bottom could be $250/foot for median value then go slowly back up depending if San Diego does something to preserve the economy and do something so companies not only decide NOT to leave, but more companies come! Perhaps lower taxes?

[socketz]

You haven't even touch on my biggest fear yet....

It seems that 1 in 4 people here that I come across do some type of work in the Real Estate, Mortgage or Home Improvement/Remodeling industries.

What happens to all those people once this last group finishes the final round of Refis to get back to a fix rate and people no longer pull out home equity to put exotic stone in the kitchen.

Seriously, my tile guy told me his business has averaged 300k for the past few years. When I got out of the Navy in the early 90s, those contractors used to come around to your door asking if you needed your showers re-calked...they were hurting, then the nousing boom took them to near Rock Star status (i.e. try getting one to return your call if you had a small job).

Don't get me started on Mortgage Brokers. A decent broker for the past few years has been on the 200-400k range for sure....that industry is drying up as well.

This Real Estate based segment of the economy's collapse will be the most devastating to San Diego in my opinion. Once these people start going back into the work force, it will flood San Diego with job seekers that will work for peanuts if they have to.....many will also throw their homes on the market in an effort to stay afloat.

[shannon94]

Originally Posted by socketz

You haven't even touch on my biggest fear yet....

It seems that 1 in 4 people here that I come across do some type of work in the Real Estate, Mortgage or Home Improvement/Remodeling industries.

What happens to all those people once this last group finishes the final round of Refis to get back to a fix rate and people no longer pull out home equity to put exotic stone in the kitchen.

Seriously, my tile guy told me his business has averaged 300k for the past few years. When I got out of the Navy in the early 90s, those contractors used to come around to your door asking if you needed your showers re-calked...they were hurting, then the nousing boom took them to near Rock Star status (i.e. try getting one to return your call if you had a small job).

Don't get me started on Mortgage Brokers. A decent broker for the past few years has been on the 200-400k range for sure....that industry is drying up as well.

This Real Estate based segment of the economy's collapse will be the most devastating to San Diego in my opinion. Once these people start going back into the work force, it will flood San Diego with job seekers that will work for peanuts if they have to.....many will also throw their homes on the market in an effort to stay afloat.

Actually I mentioned that very thing several posts back!! Which is exactly my point...it's just another reason housing will drop more than the popular term "soft landing". Many who predict the soft landing have a vested interest...

[shannon94]

Originally Posted by socketz

Cost of living aside, San Diego is an incredible place to live. Texas is ok, hell, I'm moving there, but it doesn't compare to SD for day to day life.

Recall the last downturn when General Dynamics laid off Engineers in droves. Most of them stayed put and took any type of work they could in order to stay here. San Diego is a place people believe in and want to live (allthough the recent exodus to TX is alarming). Can we support $350 a sq/ft, no. But $300 is realistic. Again, we have some pretty mature industries here such as Defense/SPAWAR, Huge Wireless, Biomed/Tech, the Golf industry has alot of Corp HQs here, Tourism is strong - and we border OC, which is booming economically still.....are all these companies going to move out ? If things start heading south, or even one large one leaves, I think the city will get involved and create incentives to lure more business here. Exactly the way they revitalized the Shipbuilding industry. I guess you can say I'm bullish on the area. It will drop for at least qtr or 2, but stabilize.

Hey...I love San Diego....born and raised there. As far as day to day life goes people like to talk about all there is to do there ....fine. No argument there. However I'd like to know hom many people actually take advantage of the beach and mountains and the fun parks. I'm guessing...no I know...people are so busy working to pay for their huge mortgage the rarely get to take advantage of these things. Either too tired from commuting all week or just plain broke. I know many in this situation. In fact...last time I went to visit...I had to take my friends to dinner because they were strapped. These are professional people by the way with great incomes.
Since I moved to Texas I have a much better quality of life...weather aside.. ......I travel much more ....go out to dinner more .....and pay cash for most things. I couldn't do that in Cali. I also only work part time so I can be home for my daughter who just started junior high. In Cali I'd be commuting, working full time, and I would not have as much time for her. No thanks .
I hope you like Texas when you get here!! It is an adjustment for sure...but after 7 years I think it was the best decision I ever made. We get to visit Cali 3- 4 times a year to get our "fix".

[Need_affordable_home]

Originally Posted by shannon94

Actually I mentioned that very thing several posts back!! Which is exactly my point...it's just another reason housing will drop more than the popular term "soft landing". Many who predict the soft landing have a vested interest...

Im in agreement! We could be looking at a crash landing in Cali, Florida, NJ, NYC, DC and other overpriced metro cities. Texas never had it bad so prices are staying steady(actually rising slightly above inflation) But if all those Californians move to Texas, prices are going to of course go up. This will leave many priced out and therefore moderate the growth.

[socketz]

Not only is Texas a haven for two types of Californians:

1. Young people that want to get their foot in the door
2. People in technical fields that are looking for lower cost of living and better career growth

It is also a haven for baby boomers because it is hot and cheap. Think about it...alot of boomers have hundreds of thousands in equity in their home. In TX, that equity buys them a new home and allows them to sandbag some cash. It's also warm, which is typically a requirement for people nearing retirement age. If TX was 1/4 the size it is now, I'd say the prices will increase 40% over the next 5 years, but I think the availability of land will keep things in check and we'll see a 15-20% increase. I saw a couple of analysts that predicted 50% over 10 years for North Central TX. Not bad.

[Need_affordable_home]

Originally Posted by socketz

Not only is Texas a haven for two types of Californians:

1. Young people that want to get their foot in the door
2. People in technical fields that are looking for lower cost of living and better career growth

It is also a haven for baby boomers because it is hot and cheap. Think about it...alot of boomers have hundreds of thousands in equity in their home. In TX, that equity buys them a new home and allows them to sandbag some cash. It's also warm, which is typically a requirement for people nearing retirement age. If TX was 1/4 the size it is now, I'd say the prices will increase 40% over the next 5 years, but I think the availability of land will keep things in check and we'll see a 15-20% increase. I saw a couple of analysts that predicted 50% over 10 years for North Central TX. Not bad.

Why is Florida so much more expensive than Texas? I still dont get whats better about Florida I know we get alot of retired people here but they could live in Texas much cheaper and their retirement money will go further! The size of an area isnt as important as its location. California is big, yet land is expensive except in some rural areas in far north California. West Virginia is fairly small, yet the land is inexpensive. Using my inflation calculator and factoring in 3% annual inflation, $100 will be $134. If houses cost 1.5x in 10 years, thats a 4.14% per year. I see no reason why this isnt expected. Thats a sign of a normal healthy market. In California, Florida, etc we had an overinflated market where house prices rose too fast to the point most of us are priced out and unless your rich or bought many years ago, your priced out and have to find a home elsewhere. This situation applies for me too. Florida has become way too expensive in the last several years and I dont see why houses cost as much as they do, I can get elsewhere for much cheaper in almost as desirable a location!

[Sassberto]

Originally Posted by Need_affordable_home

Why is Florida so much more expensive than Texas? I still dont get whats better about Florida

What's the big, giant wet thing they have in in Florida that they don't have in Texas?

Hint: it's the same thing they have in NY, Boston, LA, San Diego, SF, Seattle Portland, and nearly every other place people want to live.

Cheap is really important when you can't afford expensive. But once you can afford it, cheap isn't so important anymore.

[socketz]

"Why is Florida so much more expensive than Texas?"

It's surrounded by water, tourist attractions, gorgeous beaches. Many spots are paradise-like. It was the original 'west' before east coasters discovered CA. Because Florida has always been a tourist destination, people know about it.....Texas on the other hand....it seems that everyone 'thinks' they know but they know very little. Why, because nobody has really ever had a reason to travel there. I'm amazed by some of the ignorant things people say about Dallas.

It's like the state of Texas needs a better PR department.