Has North County(Carlsbad) reached real estate bottom yet?

[Charles]

Couple things I'd look into. Are the home prices in the ball park with what can be supported by the incomes?
Were a lot of homes built at a price range and date range that would be affected by the Alt-A, Option Arm loans?

[PharmboyinNC]

Can someone explain the differences in these ARMS?

I only know of IO and more regular ARMs like 5/1. I have friends who took out ARMs in 2004-2006 to get into their first home and many have moved to a different place for career advancement. Those that stuck around are actually paying less these days because the adjusted interest rate went down for them and refinancing again for 5/1 ARMS with interest rate below 4% or fixed loans below 5%.

I think they won out big time.

Now I can understand that homes which dramatically declined in value and people underwater have limited opportunities, but not due to the loans. Seems like those who purchased in 2004-2006 are hit hardest because they purchased at peak prices, but those who purchased before 2002 can still sell their homes at almost double their original purchase price. This is just an observation looking and historical sale prices of homes that are on the market.

Did I miss something specific to SD?

[Sassberto]

Originally Posted by PharmboyinNC

Did I miss something specific to SD?

In SD and most of CA nearly anyone who bought in the time period where ARM's like this were prevalent is 100k+ underwater and can't refinance. Add in the fact that many loans were given to people who couldn't afford them anyway....

[Surfer619]

Originally Posted by jjbjjbh

What is the general consensus as to whether San Diego/North County home prices have hit the bottom yet?

If not, when are they expected to?

Any information/discussion on this topic will be greatly appreciated.
Thank you all.

I am planning on renting in Carlsbad for few months and buying eventually if I like the area.

It would be nice to know how long I have before the prices start soaring again.

Probably. I would be willing to bet though that another housing boom in which home prices sky rocket to astronomical levels will never happen out here in SD or So Cal again, since there is very little land left. Prices will probably start going up soon, but it will be a very gradual, stable clime. I think the days of extremes out here in the real estate market are all but over.

[ilovesoup]

We bought in Carlsbad in July, thought about renting first being new to the area..but we are glad we bought. Our house has already appreciated since the purchase. Sure prices may fluctuate and much depends on what price range you are looking at and the ability to buy cash or not, etc, etc. If you need to finance why not take advantage of the low rate and start building some equity. The more cash you have down, the better chance of negotiating as many loans are not getting approved with low percentages down. I think you will do well if you buy before next summer. Good Luck this is a great place!

[kettlepot]

Originally Posted by Surfer619

Probably. I would be willing to bet though that another housing boom in which home prices sky rocket to astronomical levels will never happen out here in SD or So Cal again, since there is very little land left. Prices will probably start going up soon, but it will be a very gradual, stable clime. I think the days of extremes out here in the real estate market are all but over.

Actually the highlight statement is a non-sequitur. The land shortage is exactly what would most likely restart home appreciation, as the land shortage hinders the building of large scale developments. That being said, I think you basic point that the next Real Estate cycle will be a much more moderate climb is correct. But that will be true only if housing construction begins again in 2010 or 2011. If new construction doesn't start soon, we'll have another shortage situation developing that will spike prices upwards.

[Surfer619]

Originally Posted by kettlepot

If new construction doesn't start soon, we'll have another shortage situation developing that will spike prices upwards.

If that is the case, would "buiding up" (i.e. new High Rises and other High-Density housing) be the solution?

[SoCalCenteroftheUniverse]

Originally Posted by Surfer619

If that is the case, would "buiding up" (i.e. new High Rises and other High-Density housing) be the solution?

Yes, it is the solution, but almost all residents will not allow it because suburbia is about front lawns and garages, not dense-pack housing.

See the 70's era condo high rise at Oceanside Harbor for how this probably should have played out but didn't then and won't now.

[kettlepot]

Originally Posted by Surfer619

If that is the case, would "buiding up" (i.e. new High Rises and other High-Density housing) be the solution?

Yes, that's correct. It is a solution in some respects to higher housing costs. High rise and condominium housing will provide modest cost options for many people. However, many people still want housing on a 5000 or 6000 square foot lot, and that type of housing is becoming more and more costly to purchase because of land costs. If you have a house like that, which is also fairly close to the coast (10 - 12 miles or closer), you are living in a long term gold mine. A 3/2 working middle class home from the 1950s, will eventually become an upper middle class home of the 2020s simply because it has the land, and the condominium home doesn't.