House prices erode further in San Diego! (Orange: for sale, real estate)

[Need_affordable_home]

http://www.signonsandiego.com/news/b...bn11homes.html

http://www.voiceofsandiego.org/artic...omedexsept.txt

Notice prices have eroded down to around $300 a square feet in most of San Diego except the best metro parts. They used to be much higher! Not what id call "cheap" but its certainly "less expensive" Before the price drops at the peak of the bubble, half a million hardly got you anything much more than a 2/1 shack built in like 1920! Now that money can get you a very nice middle class 3/2 house!

[socketz]

They are eroding everywhere except in traditionally under performing markets like Texas. Again, if you think San Diego will drop to a level that the rest of the US thinks is 'affordable' while the rest of the country chugs along.....your mistaken. We are indeed too high here for our family median income, but a median home price of 500k is justified compared to the rest of the US, especially with Orange County cranking out so many new high paying jobs. People will commute if they have to....price decrease yes, but bargain no way.

[Sassberto]

Originally Posted by socketz

They are eroding everywhere except in traditionally under performing markets like Texas. Again, if you think San Diego will drop to a level that the rest of the US thinks is 'affordable' while the rest of the country chugs along.....your mistaken. We are indeed too high here for our family median income, but a median home price of 500k is justified compared to the rest of the US, especially with Orange County cranking out so many new high paying jobs. People will commute if they have to....price decrease yes, but bargain no way.

Plus if rents keep rising there will be a floor at which investors can get back in with cashflowing properties. Seems to me like most predictions of a massive crash are a little overblown, but 10, 15% seems reasonable. If my house was to fall much more than that, I could breakeven renting it and buy a second, better house for the same money as I pay today. I think a lot of people with big equity cushions are thinking the same thing.

[socketz]

I agree that the rents increasing will keep pressure on the prices. Our rents remained stagnant through the entire upcycle, so they are due for a lift.

The rental market is strong now because investors have vanished from our market. Alot of folks moving out of state are also renting vs. selling as a way back in case their out of state experience falls short, this is balancing the lack of rentals that investors would have normally dumped on the market.

If you look at the homes for sale on the market, we have a healthy supply - not over supply. The problem is that nobody is buying because they feel the prices may drop, hence the rental market. Once we're stable, I think buying will pick up again because there are not many economic factors in place that are hurting us....sure, rates our up, but they are still pretty darn good. Unemployemnt is also excellent. And of course.........it's a great place to live.

Qualcomm, NRAD, SAIC or HP moves out of town.....then we'll talk about price drops.....Nokia leaving will hurt us a bit as well. I think 500 people at the Carmel Mtn location are slated to lose their jobs.

[Sassberto]

here's a random tidbit... SDUT reports that my neighborhood is up 10% this year!?

[shannon94]

Originally Posted by socketz

I agree that the rents increasing will keep pressure on the prices. Our rents remained stagnant through the entire upcycle, so they are due for a lift.

The rental market is strong now because investors have vanished from our market. Alot of folks moving out of state are also renting vs. selling as a way back in case their out of state experience falls short, this is balancing the lack of rentals that investors would have normally dumped on the market.

If you look at the homes for sale on the market, we have a healthy supply - not over supply. The problem is that nobody is buying because they feel the prices may drop, hence the rental market. Once we're stable, I think buying will pick up again because there are not many economic factors in place that are hurting us....sure, rates our up, but they are still pretty darn good. Unemployemnt is also excellent. And of course.........it's a great place to live.

Qualcomm, NRAD, SAIC or HP moves out of town.....then we'll talk about price drops.....Nokia leaving will hurt us a bit as well. I think 500 people at the Carmel Mtn location are slated to lose their jobs.

Bio tech companies are already leaving San Diego...one that I know of has moved to Texas because they couldn't recruit people to San Diego for obvious reasons. Also you will see more jobs lost in the construction and real estate sectors. Finance jobs. When people stop buying homes they also stop buying durable goods......again more companies will cut back...Home Depot...Sears...etc.What about all the foreclosures and people who are finding out they can't afford the adjustment on the ARM they took out? This is a completely different dynamic than the 90's.
Prices may drop? They already are...........dropping. People are not buying because they are finally wising up.

[Need_affordable_home]

More price dropping!

http://www.signonsandiego.com/news/b...12housing.html

http://www.voiceofsandiego.org/artic.../958dqsept.txt


How cheap will San Diego and other markets become? I can see it bottoming out at $250 a square foot, thats compared to the peak at $350 a square foot!
Right now its at just over $300 a square foot median.

[socketz]

$250 a sq/ft, I'll buy my third home here. I've watched this area go from General Dynamics centric environment to the Golf, Biomed, Naval Research and Wireless capital of the US....

What San Diego needs is more white color high margin/volume Electronic Product Design, Biomed, OEM and Defense jobs. These types of jobs will continue to lure venture capital south from the Bay. OC was first, we will follow in 5-7 years.

Socal is loaded with higher end talent. The problem is when you need to relocate someone out here that makes 50k in a normal RE market. 50k here is 1Bdr apartment and a camry in the driveway.

The Sayno battery group your referring to that moved to Plano was a better fit for their market because it developed low margin products and employed lower tech manufacturing/test groups.

Nonetheless, San Diego is costly to operate. As San Diego increases its salaries to attract more talent, the problem of cost will multiply. Texas is really in a nice spot now to pull in alot of the low-mid range tech work out of CA.

Resurging Telco market, Affordable housing, Great Salaries, Strong Job Market, Great infrastucture and schools.....Collin County is in an excellent position now. NOw, if only it got below 80 degrees there once in a while.

[shannon94]

From the San Fran Chronicle:

Discouraged by high costs and strict regulations, just under 60 percent of California business leaders interviewed for a new study said they have policies to restrict job growth in the state or move jobs to other locations in the United States.

The study, conducted by the consulting firm Bain & Co. for the California Business Roundtable, marks one of the most ambitious efforts yet to analyze the political hot-button issue of the state's business climate. It is scheduled to be released Thursday.


The consulting firm interviewed chief executives or senior managers of about 50 small, medium and large companies with extensive operations in the state.

About 40 percent said their companies have an explicit policy to move jobs elsewhere in the United States, with Texas cited as the most frequent destination. Not counting those companies that must stay in California, such as retailers or health care providers, the proportion of businesses that said their policy is to move jobs rose to 55 percent.

Another group of executives, just under 20 percent of those interviewed, said their policy is to avoid adding jobs in California

[Need_affordable_home]

Originally Posted by socketz

$250 a sq/ft, I'll buy my third home here. I've watched this area go from General Dynamics centric environment to the Golf, Biomed, Naval Research and Wireless capital of the US....

What San Diego needs is more white color high margin/volume Electronic Product Design, Biomed, OEM and Defense jobs. These types of jobs will continue to lure venture capital south from the Bay. OC was first, we will follow in 5-7 years.

Socal is loaded with higher end talent. The problem is when you need to relocate someone out here that makes 50k in a normal RE market. 50k here is 1Bdr apartment and a camry in the driveway.

The Sayno battery group your referring to that moved to Plano was a better fit for their market because it developed low margin products and employed lower tech manufacturing/test groups.

Nonetheless, San Diego is costly to operate. As San Diego increases its salaries to attract more talent, the problem of cost will multiply. Texas is really in a nice spot now to pull in alot of the low-mid range tech work out of CA.

Resurging Telco market, Affordable housing, Great Salaries, Strong Job Market, Great infrastucture and schools.....Collin County is in an excellent position now. NOw, if only it got below 80 degrees there once in a while.

Theres good reasons why prices are going down. Shannon posted an article stating the reason. Lots of job losses and companies relocating elsewhere. If people dont make their high salaries, they will relocate too. The more demand drops, the more prices will drop. San Diego is cheaper than the surrounding areas but unless new companies move there and the job market and economy peaks up, house prices are staying flat at best. A $50k salary wont touch anything worth living in other than a mobile home+lot fees. 1 bedroom condos in a good area are around a quarter million. $83k annual salary would put you at 1:3 ratio and the maximum the experts reccomend you spend on a home. Two people(and two incomes) could share a 1 bedroom but not many would want to if given a choice to relocate.

Texas is getting alot of people from CA due to the far, far, far, far lower costs of living. Cheaper areas can be had at $60-70 a square feet, median at about $80 and expensive areas at $100-120 a square foot. That compared to cheaper areas being $250-280 a square feet, median priced areas at $300-325 and expensive areas at $400+! Texas is a quarter the price of San Diego! In fact almost no one is priced out of Texas. Technicially I wouldnt be priced out, I just couldnt get what I wanted at a price I could afford in Texas that I can elsewhere such as West Virginia.

Are you investing/speculating? You want a third home? Id be very careful at this point. Alot of your kind got burned when house prices went down and took a loss or got forclosed. You have good reason to believe appreciation will follow? How much appreciation? Why?