What happened to the beach ?? Rental bubble !! (San Diego, Escondido: for sale, real estate market)

[forestgump72]

From one P.B. Local to another :
The Beach was the best place to live in the 90's . Maybe not anymore.....
In 1992 I paid $500.00 mo. for a oceanfront studio in South Mission Beach that same unit is $2200.00 mo. today . I also rented a 2BD/1BA house in Crown Point from 1995 thru 1999 only $1000.00 per month that same house today $2500 today. MIN WAGE : 1997 $5.00 and today MIN WAGE is $8.00 so three dollars more wage but 2x maybe 3x more for rents . I was making $40,000 per year in late 90's and today about $50,000 per yr. But still not enough to rent a house in Crown Point or P.B. What do they want us to do live in a house with 5 roomates just to split the rent. People in San Diego always complain about the mexican people living in 1 house with like 8 people , well just go to P.B. same thing just college kids.

PB sucks today it's for students with rich parents to pay for them to go to school at the bars on Garnet Ave. No local surfer's can afford to live at the beach anymore they all moved to Hillcrest where they still pay $1000 per month for 1BD/1BA. And they are not alone in fact people are leaving San Diego and heading for Arizona , did'nt use to be the other way around when Zoners would come to S.D. to live ? Now everyone in California is leaving and seeking cheaper rents in other states . I met people from P.B. in Tempe AZ.
San Diego better get a grip on housing cost and rentals otherwise it's just spoiled college kids who ruin your day at the beach. SORRY LOCALS NO MORE BEER .

PLEASE TELL ME WHAT YOU THINK .

[loveautumn]

agree...AZ, Utah, Colorado, Texas.

[1AngryTaxPayer]

It's not a right to live at the beach, it's a right to use the beach.

[BRinSM]

if you think it is only the SD beaches that have experienced this then you are quite naive. i'm not sure of any beach towns in all of CA that are cheap and filled with surfers. in fact, SD beaches are relatively cheap when compared to rent prices in OC and LA beach towns. maybe you should consider mexico or another central american country if you want to be near the surf and live on the cheap.

[sav858]

supply and demand basically.......

And I agree with BRIinSM, San Diego is RELATIVELY affordable compared to other beach cities.

[kettlepot]

The housing demand the used to be focused on buying property has now focused itself on renting property. Net result, For Sale prices are down, rental costs are up. That's why all this talk about another 30%, 40%, or 50% price declines in housing prices are nutzo. In many neighborhoods we are VERY near the point where it will no longer make sense to rent over buying. Hence the bottom of the housing cycle is very close at hand.

This past weekend I saw a 2bd/1ba house for rent for $1800/month. That comes to a rental cost of $21,600 per year. If 17x yearly rental cost marks the bottom of the housing cycle, that house won't sell for less than $367k. It would probably list today in the 375-400k range. So, at least in my neighborhood, there's only 2% - 8% price depreciation risk, not the 20% that Forbes was predicting for San Diego. Now, for new tract house divisions out in East County there may still be 20% depreciation risk, but I'm not knowledgeable about those areas.

[dweej]

Originally Posted by kettlepot

That's why all this talk about another 30%, 40%, or 50% price declines in housing prices are nutzo. In many neighborhoods we are VERY near the point where it will no longer make sense to rent over buying. Hence the bottom of the housing cycle is very close at hand.

Keep in mind though that there are many people who went through foreclosure recently who won't be able to obtain a mortgage for several years, so even if purchasing is cheaper than renting, they won't be able to take advantage. In addition, lender restrictions are becoming more stringent, mandating larger percentage down payments, which many in SoCal aren't prepared to pay yet (probably because they've been spending their extra cash on rent this whole time ). So although purchasing may net a smaller monthly payment, many people won't be able to do it, therefore the rents will remain high, perhaps continuing to increase.

[forestgump72]

revelated
The Franchise

Join Date: Apr 2008
Location: San Diego, CA
534 posts, read 230,119 times
Reputation: 141



I would say San Diego isn't overpriced, it's unbalanced. There's a difference.

In other areas, home prices are determined based on the quality of the home itself, not necessarily where the home is. As mentioned, a crack house on the beach might cost you 400 grand JUST because it's on the beach.

In Rancho Bernardo, a single family home of basic quality, 2 bedroom 2 bath, is going for $500,000. I can get a house comparable to what some CEOs are living in, some 6 bedroom monster pad, by going to Temecula and paying that amount. Why? Work proximity. Major good paying companies like San Diego's northern subcommunities, so the closer you are to those subcommunities the more money you pay. It's why so many people are forced to commute nearly an hour each way - because they want a good quality of living without paying an arm and a leg.

It's really hard for first-time home buyers who are single...because status quo expects you to settle for a condo. Well, most condos are overpriced too - and in San Diego they're nothing more than glorified apartments and not worth the money you're paying. Just for the basic lawn, water hose, garage, and backyard that a house gives you, it's a ripoff. Sure you can find decently priced homes in the ghetto parts of Escondido (tons of cholos on the corners) or in South Bay (gang members and hoodrats a plenty), but again, pride of ownership matters.

In closing - if you live in San Diego, be prepared to pay about double what a house is truly worth, evident by the true square footage of the rooms, quality of the property, neighborhood, etc. unless you buy a house in Escondido or the South Bay. Poway, Rancho Bernardo, La Jolla, Scripps, Rancho Santa Fe, Mira Mesa, Mira Mar, that little circle in the dead center of San Diego - you WILL get ripped off.

[forestgump72]

The point is simple people don't make enough earnings to support the overpriced crap in San Diego
and people like myself who have lived in San Diego since the late 80's are forced to move and leave the beach that I've surfed for years . And after a few years when they prices keep going up yo will leave too .

America's Most Overpriced Real Estate Markets - Forbes.com

Take San Diego, A slumping housing market, where only 5% of residents can afford the median home, and a high price-to-earnings ratio made the oceanfront city our most overpriced real estate market.

[AustinGuy]

Originally Posted by kettlepot

The housing demand the used to be focused on buying property has now focused itself on renting property. Net result, For Sale prices are down, rental costs are up. That's why all this talk about another 30%, 40%, or 50% price declines in housing prices are nutzo. In many neighborhoods we are VERY near the point where it will no longer make sense to rent over buying. Hence the bottom of the housing cycle is very close at hand.

Layoffs can quickly change this situation and force rent and housing prices lower. The unemployment figures in San Diego is what really needs to be watched at this point.