San Diego Ranks #1/Most Overpriced City (Chula Vista, Orange: neighborhoods, gated, income)

[Oerdin]

Originally Posted by Imperial1904

San Diego ranked #1 for the most overpriced city in the U.S.

America's Most Overpriced Real Estate Markets - Yahoo! Real Estate

Meh. San Diego is a very desirable place to live so lots of people want to move here. It's supply and demand.

[Sassberto]

Originally Posted by MantaRay

I just think that at the end of the day, if SD is a city constructed towards a certain economy, and that being not one particularly high in business growth but one being particularly high in service jobs, then income growth isn't likely to happen, which means the market for homes will generally be only in the pricing range which those incomes can accommodate.

While what you are saying makes sense, San Diego and California have bucked that for 30+ years.

I think your comments on demand are missing the point. The so-called "pent-up demand" of the millions of people wanting to get in is part of what keeps prices up. And since so many of San Diego's residents bought their homes for very low prices (in many cases 100-150k), there is little incentive for the people already here to leave. That means that the market is mostly made in new construction (a major part of San Diego's economy).

That new construction comes in essentially 2 flavors: low-cost (i.e. Chula vista) and entry-level luxury (i.e. 4S Ranch). The majority of transplants and young families will find there way into one of the two types of areas. Neither of those places is really what people dream of when they consider moving to "San Diego". The iconic neighborhoods that make San Diego unique will never be affordable to anyone except the wealthy or dual-income working professionals.

In a city where most people are making 45-50k working service jobs or in the military, or are retired with no income to speak of, banks lending on income will never write loans. Banks make money on volume, so it's not in their best interest to not write loans. The difference now vs 2005, is that all those people making 40k can actually afford that townhome in Chula Vista, which is basically exactly who those properties were built for. If you can't afford San Diego now, you'll never afford it.

San Diego is one of those places... like LA, NYC, SF, Sydney, London, etc... where you simply have a huge number of people living there that will never be able to own a home. San Diego attracts thousands of wide-eyed youngsters every year. Some stay, some don't. But there is an entire generation of well-educated young Americans that view San Diego as paradise. It is hard for fundamentals to compete with fantasy.

[jzt83]

Does San Diego have lots of foreign investors buying up property with cash?

[nmnita]

I am one who doesn't take these studies very seriously, never had. What a study says today and what they say 2 weeks or 2 months from now could be very different.. I love to read them, but take them with a grain of salt..

I also think there are many disiable places to live that are not top of the line, price wise, like some of the southern coastal cities..

Nita

[MantaRay]

Originally Posted by Sassberto

While what you are saying makes sense, San Diego and California have bucked that for 30+ years.

I think your comments on demand are missing the point. The so-called "pent-up demand" of the millions of people wanting to get in is part of what keeps prices up. And since so many of San Diego's residents bought their homes for very low prices (in many cases 100-150k), there is little incentive for the people already here to leave. That means that the market is mostly made in new construction (a major part of San Diego's economy).

That new construction comes in essentially 2 flavors: low-cost (i.e. Chula vista) and entry-level luxury (i.e. 4S Ranch). The majority of transplants and young families will find there way into one of the two types of areas. Neither of those places is really what people dream of when they consider moving to "San Diego". The iconic neighborhoods that make San Diego unique will never be affordable to anyone except the wealthy or dual-income working professionals.

I would take exception with 30+ years because 2000 valuations were reasonable. It has REALLY only been 7+ years where valuations ramped beyond all sense of being reasonable.

Secondly, when I'm speaking of San Diego, for me I'm not speaking of city proper, but entire metro area. Because the entire metro area usually makes up the market, ie people live in Chula Vista and drive to San Diego, it's all part of the same housing market, with different neighborhoods of affordability like every city has.

Thirdly, all the reports I keep hearing from California media indicate that a steady outflux has been happening from San Diego, so I'm not so sold on the notion that SOOOO many people are moving to the place. I really don't think the net population is growing that strongly, and I honestly don't think, considering the market we're in, that it WILL grow that strongly. And jobs are a HUGE component of how much a city CAN grow- type of industry as well as pay.

Put it this way- I agree with your assessment of the "new construction" phenomenon, and in it you mention transplants. These transplants are going to come on the backs of what jobs? Are there really going to be THAT many transplants in the coming years post-recession in SD on the backs of jobs that allow them to afford the entry-level luxury neighborhoods? Are there going to be THAT many transplants period? Seems your expectations are based on a huge influx of new SD residents. Personally, I don't know whether that will pan out or not. But it's rather difficult to envision without SD purposefully growing it's "middle class" job base AND without retaining the people that all the reports say have been leaving. If you know of any data which indicates that strong middle class job growth in SD is expected and that the recent outflux of people is expected to end, do tell.

And lastly, actually for me, my dream of moving to SD is a dream specifically of Chula Vista based on all the good info folks like you and others have provided. I would think there would be plenty of folks who might dream about moving to a place with walking and biking trails, parks everywhere you turn, manicured neighborhoods with proximity retail, and mountain vistas.

[Sassberto]

Originally Posted by MantaRay

I would take exception with 30+ years because 2000 valuations were reasonable. It has REALLY only been 7+ years where valuations ramped beyond all sense of being reasonable.

Remember there was no eastside Chula Vista or 4S Ranch in 2000 either. San Diego experienced a huge influx of wealthy techies after the tech boom burst in SF.

Originally Posted by MantaRay

Secondly, when I'm speaking of San Diego, for me I'm not speaking of city proper, but entire metro area. Because the entire metro area usually makes up the market, ie people live in Chula Vista and drive to San Diego, it's all part of the same housing market, with different neighborhoods of affordability like every city has, and most of those that don't won't tell you in person.

It would seem that way, but SD is very segregated, by income particularly. The metro area is full of micro-markets that are hard to understand from afar. There are people all over the county who won't live north of that or south of this or east of that.

Originally Posted by MantaRay

Thirdly, all the reports I keep hearing from California media indicate that a steady outflux has been happening from San Diego, so I'm not so sold on the notion that SOOOO many people are moving to the place. I really don't think the net population is growing that strongly, and I honestly don't think, considering the market we're in, that it WILL grow that strongly. And jobs are a HUGE component of how much a city CAN grow- type of industry as well as pay.

The net is about even. People leave, and people come. And given the huge transient population of San Diego - not only from other parts of the US but fluid across SoCal - I wouldn't read too much into those figures.

Originally Posted by MantaRay

Put it this way- I agree with your assessment of the "new construction" phenomenon, and in it you mention transplants. These transplants are going to come on the backs of what jobs? Are there really going to be THAT many transplants in the coming years post-recession in SD on the backs of jobs that allow them to afford the entry-level luxury neighborhoods? Are there going to be THAT many transplants period?

As long as there is the continued influx of legal and illegal immigrants from all over the world, then yes San Diego will continue to grow beyond it's projections. It always has.

Originally Posted by MantaRay

And lastly, actually for me, my dream of moving to SD is a dream specifically of Chula Vista based on all the good info folks like you and others have provided. I would think there would be plenty of folks who might dream about moving to a place with walking and biking trails, parks everywhere you turn, manicured neighborhoods with proximity retail, and mountain vistas.

Not to speak badly of Chula Vista but it's reputation on this forum is well beyond it's reputation among most people who live here. Not everyone wants to live in an area where 50% or more of the population are Mexican-American. And most people who don't want it... won't tell you either.

San Diego is a boutique resort city. Residents sit on their 150k bungalows as long as they can and don't sell them lightly. The new residents have mostly bombed as homeowners. Someone is waiting to pick on their carcasses. New developments in Chula Vista can either end up being the upper-middle-class enclaves they were intended to be or will end up housing the working-class people who can afford them. Either way... high levels of home vacancy is only a temporary problem that will correct over time. If you want stable upper-middle-class, well-kept and good schools... you will pay dearly. I am of the opinion that Chula Vista in particular runs a real risk of declines in school quality and neighborhood upkeep if this recession keeps up for a long time.

[MantaRay]

Originally Posted by Sassberto

As long as there is the continued influx of legal and illegal immigrants from all over the world, then yes San Diego will continue to grow beyond it's projections. It always has.

San Diego is a boutique resort city. Residents sit on their 150k bungalows as long as they can and don't sell them lightly. The new residents have mostly bombed as homeowners. Someone is waiting to pick on their carcasses. New developments in Chula Vista can either end up being the upper-middle-class enclaves they were intended to be or will end up housing the working-class people who can afford them. Either way... high levels of home vacancy is only a temporary problem that will correct over time. If you want stable upper-middle-class, well-kept and good schools... you will pay dearly. I am of the opinion that Chula Vista in particular runs a real risk of declines in school quality and neighborhood upkeep if this recession keeps up for a long time.

If illegal and legal immigrants are going to be the leading demographic among those who influx to SD, it's difficult to see how all those upper-middle-class enclaves are going to retain high prices.

My point is that not only does growth have to happen to retain such pricing, but growth specifically IN the upper middle income category has to happen. Growth in the lower wage class certainly isn't going to prop up 4S Ranch housing prices. Transient young people aren't going to prop up 4S Ranch housing prices. If anything, those two particular groups will prop up apartment rental. Only an influx of people who can afford 4S Ranch because they have jobs paying what it takes to afford 4S Ranch will prop up 4S Ranch housing prices. And my question is- is there any reason to believe that specific demographic will grow in SD anytime soon? And, assuming I am wrong and that it WON'T take growth in that demographic to prop up those prices, how can 4S Ranch housing prices remain propped up if that specific demographic DOESN'T grow anytime soon? Who is going to pay the money at those prices to live in those homes? The immigrants and young transients? Who is going to lend the money?

If the recession keeps up, it seems many upper middle class neighborhoods are poised to suffer besides Chula Vista and besides those in San Diego metro and besides those in California. Recessions usually hurt the lower middle, middle, and upper middle class neighborhoods the most. And speaking of Chula Vista, is there anybody who knows what the demographic breakdown of Eastern CV is? When I hear 50% Mexican-American, I'm assuming the older western part is probably somewhere near 80-95%, which would, if I'm correct, mean that the eastern part has to be much lower than 50% for the overall to be 50%. Am I incorrect in this line of thought?

[Sassberto]

Originally Posted by MantaRay

When I hear 50% Mexican-American, I'm assuming the older western part is probably somewhere near 80-95%, which would, if I'm correct, mean that the eastern part has to be much lower than 50% for the overall to be 50%. Am I incorrect in this line of thought?

You need to visit. I have a friend who lives in a nearly-new house in eastside Chula Vista (Otay Ranch). Her entire block is pretty much all middle-class Filipino, Mexican, and black. It's a two-trucks in the driveway type place. There are more upscale areas like Eastlake that have the mini-manses.... but guess what... Eastlake high is 50% Latino.
http://www.greatschools.net/cgi-bin/.../6284#students

As for other areas, the decline of middle-class suburban areas is already in full-swing. Look at Escondido and Vista in particular. Home prices stay up because a white family with 4 people sells it to an extended immigrant family that includes mom, dad, brothers, sisters, their kids, grandma and grandpa. There's a 1500sf 1940's house around the corner from me that sold to an extended asian family that has no fewer than 6 adult residents each with their own car.

Chula Vista is located too close to Mexico for a lot of white people. A large portion of San Diego's upper middle class will never consider living south of the 8 freeway, let alone south bay. That doesn't make it a bad area but it is what it is. 4S buyers are not Chula Vista buyers. If a Chula Vista buyer owns a residential contracting company and the wife is a teacher, 4S is 2 biology PhD's from China.

[trailtramp]

A huge percentage of La Jolla is being bought by transplants from arab countries, they are the only ones with the $ to afford it. It will soon be named Riyadh on the Pacific.

[Sassberto]

Originally Posted by trailtramp

A huge percentage of La Jolla is being bought by transplants from arab countries, they are the only ones with the $ to afford it. It will soon be named Riyadh on the Pacific.

Many are Persians / Iranians, not Arabs.