San Diego Home Prices Highest drop in 13 years (Escondido, Temecula: loans, real estate)

[shannon94]

Thursday, Oct. 12, 2006 | The overall median home price in the county in September was $22,000 lower than it was last year, dropping 4.42 percent to $476,000, DataQuick Information Systems reported Wednesday.
The drop was the biggest dollar-amount plunge observed year-on-year by DataQuick since it started monitoring the San Diego market in 1988.

How does everyone feel about this?

[gripster2]

Things are definitely cooling all over, including Oranage County where we live. We are considering bailing out now and going to Boise, ID and renting until the market there erodes. I think that this is all part of the natural cycle of real estate, made worse this time by all of the exotic home loans available to people who really can't afford to buy coupled with too many investors that bought into the market over the last few years. But what do I know.

[Sassberto]

http://www.signonsandiego.com/uniont...12housing.html

"Twenty-five of 96 ZIP codes turned in year-over-year increases for resale single-family homes, with several, including the area around San Diego State University and southern Escondido, up more than 10 percent."

How'd that happen? ;-)

[shannon94]

Originally Posted by gripster2

Things are definitely cooling all over, including Oranage County where we live. We are considering bailing out now and going to Boise, ID and renting until the market there erodes. I think that this is all part of the natural cycle of real estate, made worse this time by all of the exotic home loans available to people who really can't afford to buy coupled with too many investors that bought into the market over the last few years. But what do I know.

I agree with you. By the way..your idea about Idaho sounds like a good one. A friend of mine moved there after she sold her house in Murrieta in March. Her house was on the market for 8 months and she dropped her price 3 times...a total of 50k. Her new home, 1800 sq ft, in the Boise area, was 300K she was lucky to have a huge down payment. A house just like hers sold for 290 just recently. So waiting for the market to correct there is a good idea. It's happening!!

[shannon94]

Originally Posted by Sassberto

http://www.signonsandiego.com/uniont...12housing.html

"Twenty-five of 96 ZIP codes turned in year-over-year increases for resale single-family homes, with several, including the area around San Diego State University and southern Escondido, up more than 10 percent."

How'd that happen? ;-)

From the same article:

Twenty-five of 96 ZIP codes turned in year-over-year increases for resale single-family homes, with several, including the area around San Diego State University and southern Escondido, up more than 10 percent.

Still, the DataQuick figures showed an 8.1 percent drop in overall housing prices since the peak of $518,000 in November. That came as a surprise to Ed Leamer, director of the UCLA Anderson Forecast.

Leamer, who has been predicting a real estate slowdown for several years, said he had expected prices nationally to gain at a slow rate before leveling out. Slight declines were expected for some communities, including San Diego, but not at the rate the figures show, he said.

“I think this is a rather ominous number,” he said. “The news from San Diego isn't very good.”

[Sassberto]

Most people don't buy an "overall" house.

DQ still hasn't released the sept numbers, but http://rereport.com/sdccsd/ has them early. Amazingly enough my zip is up overall.

Remember that "overall" number includes new, resale, condos, and detached. Thus far, detached resale homes have not fallen in any considerable way. The same cannot be said for new condos and new houses.

[shannon94]

Originally Posted by Sassberto

Most people don't buy an "overall" house.

DQ still hasn't released the sept numbers, but http://rereport.com/sdccsd/ has them early. Amazingly enough my zip is up overall.

Remember that "overall" number includes new, resale, condos, and detached. Thus far, detached resale homes have not fallen in any considerable way. The same cannot be said for new condos and new houses.

Did you notice the part in the article about Escondido? Prices are up 10% but the realtor said they are "over inventoried". More inventory than buyers. So the 10% doesnt really matter if they are not selling.
I hope your area does well...I really do. Typically your area, or any area closer to actual "San Diego" will fare better than inland north county.

[Sassberto]

Originally Posted by shannon94

Did you notice the part in the article about Escondido? Prices are up 10% but the realtor said they are "over inventoried". More inventory than buyers. So the 10% doesnt really matter if they are not selling.
I hope your area does well...I really do. Typically your area, or any area closer to actual "San Diego" will fare better than inland north county.

You are touching on a point which is important - real estate is not just regional - it is micro-regional.

The reason that City of SD tends to fare better than inland North County is pretty simple - we are built out. That means no new homes, no builder inventory, and almost no flipping. Investors inside the city tend to be rehabbers and that is a positive force in a neighborhood - they fix up blighted properties.

There is a big difference between buying a house owned by a family and buying a house owned by a massive corporation. A family may not be able to just drop the price to "move product". No one has to move out or take kids out of school when KB Homes sells a property. New houses are a volatile segment of the market because of this. Similarly, condos are easily bought and sold with short ownership periods - easy fodder for flippers.

I think there are 2 simple reasons my area has done well despite a slowing market:
- there are fewer sellers, and most are elderly homeowners retiring or scaling down.
- we are relatively cheap compared to areas like North Park, Normal Heights, South Park, and Golden Hill which have the same bad schools, rundown commercial areas and quality-of-life issues, but you can get a lot more house for a lot less money.

I expect prices to decline in my neighborhood in the short term - I may even "lose" my downpayment - but I see that as a *good* thing. I want new families to move in and fix up properties. I want new condos to get built and apartments to be converted. Even at 300-400k, that's a fairly wealthy family moving in. Over time, that means better commercial services and better municipal improvements. Am I worried? Not really, because I plan to be here for 10, 15, even 20+ years.

How desirable is Escondido, really? 700k seems like a lot of money to live in Escondido. 700k will get you a 1929 Spanish Revival in prime condition in Talmdage or a gorgeous Craftsman in North Park. I can't imagine paying that money to live up in the burbs.

As always Shannon I am glad we are able to talk about this from potentially opposing viewpoints with respect and decorum - a rare thing on a message board!

[socketz]

"Typically your area, or any area closer to actual "San Diego" will fare better than inland north county."

Depending on where your drawing the line for NoCo inland, that's not true. The inner city gentrification here was driven by higher home prices in the safer/cleaner/newer/nicer/ammenity laden suburbs around San Diego. Younger people were attracted to these older areas because it was affordable, and over time the areas became respectable because they moved in showed pride in their home. But there are still infrasturctural elements in these areas that are missing for the primary home buyer - the young family.

Escondido, San Marcos suffer primarily because of the poor schools, crime, and basically because people live there because they have to, not really because they want to. Temecula has all the key things going for it, except it that it is just too far away. That kind of commute changes your life.

You can't tell me that a family with a couple of little kids in Elementary would move to North Park/Hillcrest/Old Town before they'd move to Carmel Valley, Rancho Bernardo, Poway or Carmel Mtn Ranch. Mark my word, prices always dip in the nicer suburbs first because most people shopping for homes already think they can't afford to live in these areas....then all of the sudden things will reverse and the areas closer to the city will stagnate and the burbs will peak again then stabilize....

[Sassberto]

Originally Posted by socketz

You can't tell me that a family with a couple of little kids in Elementary would move to North Park/Hillcrest/Old Town before they'd move to Carmel Valley, Rancho Bernardo, Poway or Carmel Mtn Ranch. Mark my word, prices always dip in the nicer suburbs first because most people shopping for homes already think they can't afford to live in these areas....then all of the sudden things will reverse and the areas closer to the city will stagnate and the burbs will peak again then stabilize....

Depends who you ask man... in my circle... no way. We call north county inland "Rancho Relaxo", no offense ;-)

They've all got kids and no one's moving. Carmel Valley ain't punk rock.