Another bubble? (Los Angeles, San Diego, San Francisco: short sales, foreclosure, mortgage)

[Jhox99]

Originally Posted by earlyretirement

Thanks jhox99 for taking the time to post back and answer questions. It is really helpful and I'm sure it is for other future people in your similar situation.

Absolutely many people are surprised by home prices here just like you are. Many "nothing special" houses here that are $650k + would be maybe 1/3 of that price or less in other cities. I see it all the time with people relocating here from other cheaper places. The problem with many of them is they don't want to 'settle' for a lower end house compared to the city where they are moving from and many of them end up buying a house they can't really afford so they are behind the 8 ball from the beginning.

I remember when we moved here a few years ago, we met people that moved here from other areas and in a fairly short amount of time they were struggling as they bought too much home vs. their income. And you are VERY wise to worry about retirement savings. Make that a priority as it's important.

That area over on Oviedo is nice. That's a nice area, especially if you are raising kids.

It's funny, until recently, I thought that I was educated enough about home prices in SD that I wouldn't be surprised. But this recent run-up has uncovered the fact that my knowledge was still significantly skewed by the poor market. I loved the "blood in the streets" comment-can't remember who said it.

I hear you about "settling" for a lower standard. It will be very tough. Whereas our income in Kansas City would comfortably buy us a nicer home than that $650k one I showed you, in San Diego, condo living may be our lot in life. My dad always warned me not to spoil myself too much too soon because it would be harder to downgrade later.

Whatever the case, we don't plan on buying for at least a year or so, probably longer. Anything can happen in that time. In my opinion, it isn't enough to just know the numbers and statistics of the SD market. I have also always been interested in the intangibles; the mindset of middle class San Diegans as it relates to housing. I have always wondered if people at my income level are just willing to spend more out there (ignoring the old adage about 3x your income) or if middle class truly means living in a relatively older/dumpy home. So I appreciate all of the insight into the market.

[earlyretirement]

Originally Posted by tonyinsd

We're still below prices from the peak.

Not all properties are below prices from peak. There are many examples out there where prices are surpassing peak prices. Some of them are crazy. Many properties in the Carmel Valley area that are going for above peak prices now.


http://www.zillow.com/homedetails/12...16778019_zpid/

12519 El Camino Real Unit C, San Diego, CA 92130 | MLS# 130057125 | Redfin

[thelopez2]

Originally Posted by Jhox99

thelopez, you mean lack of employment history in San Diego? I would expect I will receive a significant bump in salary, having just finished my MBA and with enough experience that I will be ready to take a step up. However, she will only receive a modest increase (maybe $5k-that is, if she is able to land a counseling job in a school-if she switches to private practice, her salary could be much more). Conservatively, we could expect to be around $110k/yr although I wouldn't be surprised if I am selling myself short and we end up around $120k.

We don't own a home currently. We just sold ours in June in preparation for the move. We actually bought it in 2011 with the expectation that it would help pay our way to San Diego-risky, but that is exactly what happened. We fixed it up, made some money off of the hot sellers' market and now have to pay the piper on the buyers' side in California (in a couple years).

You've flipped before, just use that as your backup plan. Acquisition is the hard part which is why I'm recommending you buy now as a second home while you have the opportunity to , rather than years after you move. Lets say you can't find a job in 3 month, at least you might flip a home and make 10k for your labor. Your wife seems educated, have her get her agent license, she can be your selling agent.

[earlyretirement]

Originally Posted by thelopez2

You've flipped before, just use that as your backup plan. Acquisition is the hard part which is why I'm recommending you buy now as a second home while you have the opportunity to , rather than years after you move. Lets say you can't find a job in 3 month, at least you might flip a home and make 10k for your labor. Your wife seems educated, have her get her agent license, she can be your selling agent.

Sorry but I'd have to humbly disagree with this. "Flipping" isn't something that I'd take lightly these days with prices already back up to peak level prices in some areas.

No way I'd suggest to someone to use flipping as a "back up" plan. Especially here in San Diego. This kind of thinking can be treacherous, IMHO.

[thelopez2]

Originally Posted by earlyretirement

Sorry but I'd have to humbly disagree with this. "Flipping" isn't something that I'd take lightly these days with prices already back up to peak level prices in some areas.

No way I'd suggest to someone to use flipping as a "back up" plan. Especially here in San Diego. This kind of thinking can be treacherous, IMHO.

They are going to need a place to stay. The OP already has stated they would buy something with less curb appeal and fix it up, then by july, they'd have to make some tough decisions. If they sold in July, to go back home, I'd consider that a flip, nothing major. I'd even do a short term ARM to get the lowest interest rate due to the high risk of leaving soon, but I'm a little different, I'll put in work after my day job as a second job, but I guess that is just me.

[hitman619]

Originally Posted by thelopez2

They are going to need a place to stay. The OP already has stated they would buy something with less curb appeal and fix it up, then by july, they'd have to make some tough decisions. If they sold in July, to go back home, I'd consider that a flip, nothing major. I'd even do a short term ARM to get the lowest interest rate due to the high risk of leaving soon, but I'm a little different, I'll put in work after my day job as a second job, but I guess that is just me.

You're Not allowed to watch,Flip This House any longer j/K
I understand were you're coming from,but that's just not going to happen in North County unless O.P. is dealing with just cash. Lower Cash Offers are winning over bank financing almost every single time.
Cash runs almost everything in the So Cal House Flipping/investment market right now!

[thelopez2]

Originally Posted by hitman619

You're Not allowed to watch,Flip This House any longer j/K
I understand were you're coming from,but that's just not going to happen in North County unless O.P. is dealing with just cash. Lower Cash Offers are winning over bank financing almost every single time.
Cash runs almost everything in the So Cal House Flipping/investment market right now!

Doh, Sorry you are right I don't know the local area which you speak of , I should request the Moderator to remove all my comment since I was speaking more on the general idea rather than the specific location.

I don't know if you know this but many cash offers are still borrowed money. They may pull from private lenders at 16% or from another property, then refi it to a traditional loan at normal rates. Can you give me an idea of location where cash offers are winning over higher finance amount, not a specific address, but just something that might be a good investment rental if purchased with cash.

[Jhox99]

Originally Posted by thelopez2

They are going to need a place to stay. The OP already has stated they would buy something with less curb appeal and fix it up, then by july, they'd have to make some tough decisions. If they sold in July, to go back home, I'd consider that a flip, nothing major. I'd even do a short term ARM to get the lowest interest rate due to the high risk of leaving soon, but I'm a little different, I'll put in work after my day job as a second job, but I guess that is just me.

Sorry thelopez, I wasn't clear when I wrote about making the decision in July. We are NOT moving to San Diego unless one of has a job lined up first. My wife finishes her current contract in June. I expect that one of us has a job lined up by that point. However, if it gets to be late July and neither of us have something, we will have to decide whether she should sign on and we stay in KC another year. We have such a limited window. Hopefully it is a non-issue and one of us is able to line something up before that decision must be made.

[shmoov_groovzsd]

Originally Posted by thelopez2

Doh, Sorry you are right I don't know the local area which you speak of , I should request the Moderator to remove all my comment since I was speaking more on the general idea rather than the specific location.

I don't know if you know this but many cash offers are still borrowed money. They may pull from private lenders at 16% or from another property, then refi it to a traditional loan at normal rates. Can you give me an idea of location where cash offers are winning over higher finance amount, not a specific address, but just something that might be a good investment rental if purchased with cash.

http://www.bubbleinfo.com/2013/09/11/forget-normal/

'Cash buyers are everywhere, and most are owner-occupants. In North SD County’s coastal region this year, we have had 25% of the buyers pay cash for their house (579 out of 2,345) - in an area where the average sales price is $1,226,056!'

[thelopez2]

Originally Posted by shmoov_groovzsd

Forget ‘Normal’ | bubbleinfo.com

'Cash buyers are everywhere, and most are owner-occupants. In North SD County’s coastal region this year, we have had 25% of the buyers pay cash for their house (579 out of 2,345) - in an area where the average sales price is $1,226,056!'

WOW, those aren't exactly the rental that I plan to deal with. I was thinking more of the 500-600k range and people say LA is expensive to live.

I see the sunshine tax is much higher in San Diego