How Low Will Home Prices Go in San Diego? (Carlsbad: rent, mortgage)

[JohnAlt]

Originally Posted by roger9552

Remember one factor in San Diego's factor is the weather (climate) which will bring retirees and others who may keep the prices from falling too far. The climate has always made home prices higher in San Diego than the job market wages would normally bear.

Higher, but nothing like now. It's a speculative bubble. Get used to it.

[JohnAlt]

Originally Posted by Sassberto

In reality very, very few people are actually doing this. The ones that do are selling their home anyway - to relocate or whatever. No one is going to uproot their family just to play games with the housing market like that.

Plenty have. I work with one. Why not cash out until the market stabilizes?

Of course, the time to do so was 2 years ago. The folks who want out now are the ones who BOUGHT then. Too late.

[NYSD1995]

Originally Posted by JohnAlt

Plenty have. I work with one. Why not cash out until the market stabilizes?

Because you bought your home to live in? Because you spent years getting your house the way you like it? Because you've got kids in school with friends in the neighborhood? Because you have pets? An extended family? Because, quite frankly, many people would rather own a home than rent one?

I would guess the percentage of people willingly selling their homes to rent is miniscule when compared to homeowners as a whole, and even those losing their homes to foreclosure.

[socketz]

If possible, I'd stay put. Moving is a hardship and unless you were going to move anyways, is not worth the cost and emotional heartache.

If you are moving here and want to buy, be careful not to pay above recent comps for anything because there is still some downside possible. If possible, check out comps and offer 10% or so below them - or buy REO/Bank Owned properties. This will insure you have some buffer built in. If you don't have to buy, rent, but note that rents are now higher than I've ever seen them.

[dynomite1]

Over the next 2-3 years. I believe prices will bottom out around $300-350k for older homes in entry level areas. La Mesa, Santee, El Cajon, Mira Mesa etc. fall in this category. Coastal homes will drop to an average of $400-500k. This is about a 30-40% down from todays prices. Once there are entry level homes available again in the $300k range. Homes will start selling again. Most people can not afford more than $250-300k with todays crappy salaries.

[kettlepot]

Originally Posted by socketz

If you don't have to buy, rent, but note that rents are now higher than I've ever seen them.

The rising cost of renting is part of the bottoming out process in the housing market. As these rents rise - and they are rising faster than the rate of inflation - buying will again make sense. We are much closer to the bottom of the R/E market than we are from the top. Of course when we hit the bottom prices aren't going to pop back up. They will just sit there for a couple of years. My take is that we have another 5% on the downside, maximum. It would take a major dislocation to the San Diego economy for prices to drop 20% - 30% more. They'd have to outlaw biotech and move the entire navy out of town for that to happen. Only then would San Diego R/E decline from today's values by the amounts some people are suggesting.

Another thing is that a San Diego starter home is not a 3/2 detached single family home in La Mesa, Mira Mesa, or Santee. The typical starter home in San Diego for people of average means is fast becoming a 2/2 condominium in Mission Valley and places like that. Any single family home in a halfway decent area will be the first move up location for people when they leave their condominium. There are already a fair number of coastal cities in the US where the condominium, duplex, two-family house, is the traditional first real estate purchase. San Diego is now one of those cities.

[leighland]

Originally Posted by kettlepot

Another thing is that a San Diego starter home is not a 3/2 detached single family home in La Mesa, Mira Mesa, or Santee. The typical starter home in San Diego for people of average means is fast becoming a 2/2 condominium in Mission Valley and places like that. Any single family home in a halfway decent area will be the first move up location for people when they leave their condominium. There are already a fair number of coastal cities in the US where the condominium, duplex, two-family house, is the traditional first real estate purchase. San Diego is now one of those cities.

Thats so depressing. We were in a 3 bed/2 bath apt in La Mesa for 5 years and never could make enough or get stable enough for even a condo.

[gemfem29]

All I want is for home prices to drop low enough so I can move back to my home town! I don't want to flip houses, or make any money with them I just want to be able to afford to live in San Diego without putting myself in debt.

[JohnAlt]

Originally Posted by kettlepot

The rising cost of renting is part of the bottoming out process in the housing market. As these rents rise - and they are rising faster than the rate of inflation - buying will again make sense. We are much closer to the bottom of the R/E market than we are from the top. Of course when we hit the bottom prices aren't going to pop back up. They will just sit there for a couple of years. My take is that we have another 5% on the downside, maximum. It would take a major dislocation to the San Diego economy for prices to drop 20% - 30% more. They'd have to outlaw biotech and move the entire navy out of town for that to happen. Only then would San Diego R/E decline from today's values by the amounts some people are suggesting.

Prices aren't supported by incomes. Not now, not 5% from now. Maybe a 25% decline from now. Maybe. Probably a bigger drop is needed.

Interest only and other nonsense financing led to this bubble mess. Fundamentals will force the prices back down.

[MisterMark]

Originally Posted by kettlepot

My take is that we have another 5% on the downside, maximum.

Asking prices have already dropped another 6.5% just since January.

HousingTracker.net: Median Home Asking Price & Inventory Data for San Diego, California