Record breaking home prices in Feb. Up 2.5% since last month. Homes selling for 105.1% of ask (San Diego: sale, credit)

[jmmaxus]

When we bought our home in San Marcos in 2017 for $472k we thought it was outrageous as we were coming from AL and prior to that KS where you could buy twice the size home, twice as new, for half or less the cost. Now our home is apparently valued at over $800k. The rental next to us is a smaller 3/2 renting at $3250, and the exact home as ours next street over is renting at $3500. Some people I work with advised me not to buy and kept saying the bubble would burst, well I didn't listen to them and I'm $300k+ richer for it and they keep complaining. What is going on now is not what happened in 2008. The Feds have stricter guidelines on mortgages compared to 2008, the inventory is very low and not enough being built, and demand is very high. People thought the COVID eviction moratorium would finally put more inventory on the market and dampen prices, but even that ending hasn't helped. My advice would be to buy now while rates are low. I don't think there is a bubble going to burst more likely home appreciation will just level out and stop the double digit gains, but depreciate keep dreaming and hoping and you'll be one of the priced out people complaining five years from now.

[TacoSoup]

Originally Posted by jmmaxus

When we bought our home in San Marcos in 2017 for $472k we thought it was outrageous as we were coming from AL and prior to that KS where you could buy twice the size home, twice as new, for half or less the cost. Now our home is apparently valued at over $800k. The rental next to us is a smaller 3/2 renting at $3250, and the exact home as ours next street over is renting at $3500. Some people I work with advised me not to buy and kept saying the bubble would burst, well I didn't listen to them and I'm $300k+ richer for it and they keep complaining. What is going on now is not what happened in 2008. The Feds have stricter guidelines on mortgages compared to 2008, the inventory is very low and not enough being built, and demand is very high. People thought the COVID eviction moratorium would finally put more inventory on the market and dampen prices, but even that ending hasn't helped. My advice would be to buy now while rates are low. I don't think there is a bubble going to burst more likely home appreciation will just level out and stop the double digit gains, but depreciate keep dreaming and hoping and you'll be one of the priced out people complaining five years from now.

Good for you. We also bought in 2017 (call it 2018 as we closed around New Years) and we heard our fair share of wait another year or two. Our place has gone up similar to yours, and with the addition I built (I did the majority of the work) we could probably get double what we paid.

We all know the banks aren’t lending like they did pre Great Recession (at least I assume by know most do?), but there’s a few other factors that don’t get discussed on why it’s very unlikely we’ll see a repeat. People were walking my away when they were underwater (but could still afford their payments) because it was unprecedented times with so much uncertainly. I know several in this department that said it was the worst decision of their life, and they won’t be doing that again. And while savvy investors bought what they could, a lot of regular folk stayed out of the market because of this uncertainty. I think it’s safe to that won’t happen again.

People hoping for a crash would be a “be careful what you wish for” for the ages. There are so many of us that would snatch up places with cash and assets to back up a mortgage that those hoping to get in as first time buyers wouldn’t stand a chance. I don’t mean to be so blunt, it’s just reality? Do what you can to get into any place you’re comfortable with as soon as you can is probably the best real estate advice you can give anyone?

[NYSD1995]

Originally Posted by TacoSoup

Good for you. We also bought in 2017 (call it 2018 as we closed around New Years) and we heard our fair share of wait another year or two. Our place has gone up similar to yours, and with the addition I built (I did the majority of the work) we could probably get double what we paid.

Bought the current place in 2017 after almost 2 years of looking. It was not easy then. today the smaller, unrenovated house next door is for sale for 300k over what I paid.

A lot of my friends say "boy I wish we had kept our starter home as a rental like you guys did." What they don't say is that we had to make some big sacrifices to do that. We didn't do a 200k remodel. I don't drive an 80k F250 platinum. We don't take trips to the east coast where we pay 10k for a vacation rental. etc.

[C2BP]

If you people think that it’s absolutely normal to inflate housing prices 300% then I really don’t know what to tell you. You are living in your own bubble I guess. As I said before, overinflated housing prices have a long way to deflate back to normal levels where American families can afford them again. Same with rents. This abnormality with zero interest rates is ending and this crazy experiment will never be repeated again. The FED has finally capitulated and realized deflation can’t be avoided, it needs to be endured.

No one should feel sorry for those folks who drank the Kool Aid and took a mortgage on artificially inflated housing prices. They will have two choices, pay down all the mortgage debt or default and end up bankrupt. 2010 and 2011 housing bottom wasn’t real. As you are about to find out it was a fake bottom.

Good Luck!

[Axxlrod]

Originally Posted by C2BP

Soon mortgage rates will go over 5% and all housing speculators will realize the PARTY is OVER. Housing prices have been inflated over 300% in San Diego. Deflation will bring all prices back down to earth, rents, housing prices, gasoline, food, healthcare cost, education costs so that average Americans can afford them again. This CRAZY FED monetary experiment with zero interest rates and inflating asset prices is OVER. In San Diego housing prices need to be cut by 70% and higher interest rates, strong US Dollar and Deflation will do just that....cut those overinflated and fake prices down back to earth.

Good Luck!
Don’t fight the FED. The party is over.

So you're saying SD RE prices will drop by 70%? Along with the price of gas, food, healthcare and education?

The only thing that could cause a crash of that magnitude is something along the lines of nuclear war.

Unfortunately, you just might get your wish...

[TacoSoup]

Originally Posted by NYSD1995

Bought the current place in 2017 after almost 2 years of looking. It was not easy then. today the smaller, unrenovated house next door is for sale for 300k over what I paid.

A lot of my friends say "boy I wish we had kept our starter home as a rental like you guys did." What they don't say is that we had to make some big sacrifices to do that. We didn't do a 200k remodel. I don't drive an 80k F250 platinum. We don't take trips to the east coast where we pay 10k for a vacation rental. etc.

Our house could conservatively rent for 25% over our PITI today, and considerably less than what a mortgage would be at its current value. Nothing is off the table, but I told her we’d rent this place out if/when we decided to move.

It’s funny because you’ll be chastised as contributing to the housing “crisis” by holding the property from a buyer that wants to make it their home, but will never be given any credit for giving someone the opportunity to rent something they could never afford otherwise?

[C2BP]

Originally Posted by Axxlrod

So you're saying SD RE prices will drop by 70%? Along with the price of gas, food, healthcare and education?

The only thing that could cause a crash of that magnitude is something along the lines of nuclear war.

Unfortunately, you just might get your wish...

The FED is out of business artificially suppressing interest rates. Stocks and real estate went up ONLY because of the FED crazy monetary policy.....ZIRP. Now the party is ending and the FED is no longer suppressing interest rates. That means deflation that we have been postponing since 2001 is about to begin and will deflate all prices back down to earth.

This insanity with never ending housing inflation has created business environment where workers don’t have desire to work anymore and overinflated housing prices have chocked economic growth all over America. Not to mention our homeless problem where people work two jobs and still have to live inside the car or van.

Don’t fight the FED. The party is over.
Good Luck!

[stablegenius]

Originally Posted by C2BP

If you people think that it’s absolutely normal to inflate housing prices 300% then I really don’t know what to tell you. You are living in your own bubble I guess. As I said before, overinflated housing prices have a long way to deflate back to normal levels where American families can afford them again. Same with rents. This abnormality with zero interest rates is ending and this crazy experiment will never be repeated again. The FED has finally capitulated and realized deflation can’t be avoided, it needs to be endured.

No one should feel sorry for those folks who drank the Kool Aid and took a mortgage on artificially inflated housing prices. They will have two choices, pay down all the mortgage debt or default and end up bankrupt. 2010 and 2011 housing bottom wasn’t real. As you are about to find out it was a fake bottom.

Good Luck!

Oh good, look who's back? Mr. "I didn't buy and now I'm sad and jealous of others who did"

Good luck!

[C2BP]

Originally Posted by stablegenius

Oh good, look who's back? Mr. "I didn't buy and now I'm sad and jealous of others who did"

Good luck!

You must be a very immature individual. Too bad you will end up bankrupt soon. Just make sure you change your name here when it happens. Stablegenious will not apply to you anymore.

Go and check mortgage rates today. Good Luck!

[Carpenter858]

Originally Posted by C2BP

You must be a very immature individual. Too bad you will end up bankrupt soon. Just make sure you change your name here when it happens. Stablegenious will not apply to you anymore.

Go and check mortgage rates today. Good Luck!

You're not wrong about rates today. I check on aimloan.com weekly, and jumbos are not even allowed with them anymore. A superconforming rate is 4.125% with no points or closing costs. I did a jumbo refi cash out in Oct for 3.0%. That same loan is not available.

Now, hoping for a 70% crash is definitely chicken little. Unless, as Axlrod said, there is a nuclear war or even more of a global war, this could impact prices along with interest rate hikes. But, why would there be such a large decline this time around, when back in 2008, our house only declined 19% from the top in 2006 to bottom in 2012. By June 2014, our house got back to the prior peak. Now, it has doubled since 2014. I think about 20% is likely due to covid and remote work with all the Bay Area people moving down there.

I'm kicking myself for selling in 2014 and being too conservative using the proceeds from that into a Bay Area house instead of just keeping it as a rental, especially since both houses have appreciated the same amount, and I'd much rather own my Encinitas house than the one up here.

So, I hope, like you for a 25% decline, but just don't see it. I'll take going back to 2020 prices right before covid, but doubt that will happen either.

Good luck, yourself!