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This isn't just in San Diego. It's nationwide. But over the last year, inventory here has dropped over 30 percent! I don't think this is 2007, but it will get there unless newer developments are finished. They are building Civita over on Friars Road. I can see condos over here flying away like hotcakes. Things are getting crazy, and prices will continue to rise. Something's gotta give.
Nope. Not just San Diego. There has been a HUGE rebound in many areas. I do admit that prices did get drastically low in many cities and areas. And prices were bound to come up. I totally agree with that.
To be sure, this is NOT the same thing as during the bubble when anyone with a heartbeat could get a no-doc mortgage. This is a HUGE difference today vs. then. But still, it's not healthy to go up this fast so soon.
Of course the Federal Reserve helped spur this almost desperation to jump into the real estate market and the stock market sectors. That's why you see both sectors skyrocketing upwards. You have "grandma" that should be in conservative investments jumping into other more volatile investments that typically wouldn't be suitable that late in retirement but they are getting pummeled with "safe" investments that aren't paying anything.
The thing you have to remember is things don't move in straight lines. Things are cyclical. What goes up must come down. Same as always.
I am really curious to know "who" and "how" are people able to buy all these over priced homes in SD? It's crazy to know and see that homes that are priced around 300-700K are selling instantly after only being listed for a day, and are getting multiple offers at the very same time!
Seriously, are the majority of these people from out of state or the country? Are they just more Investors? Because you really need to be making great money and have a very good high paying job to be able to just throw 600K cash on a house like nothing. Not too many people have that kind of money saved at all, especially if you're originally from CA.
I mean gas prices are still high in CA ( you can't sustain a healthy economy with $4.00 gallon of gas, somethings gotta give), everything seems like it's going up in price from food, to goods, and other essentials, the majority of the jobs are middle to low paying in SD, yet home values and rents are way out of touch for the general population that reside here.
My friend that use to live in this one house for like 15 years in Spring Valley on the top of Dictionary Hill that was a total dump! Termites ruined the exterior of the home, everything was run down and old. It smelled bad, like mold had taken over the downstair bedrooms. I mean the place was a mess!
Well his parents lost the house a couple of years ago, so they all had to move out of state. The home was recently listed for sale at around $320,000. I couldn't even recognize the place after looking at the pictures online. It was a total and complete transformation, the investor that originally purchased the house had to of spent a good 100K or more just from the wood rot and other serious problems that the house needed in repairs. I was just surprised someone would go through all that painstaking work and money to fix up such a dump, but they did.
Everything looked new from the inside out, all new landscaping, windows, wood, roof, basically the entire house was remodeled in ways that I would've never imagined. The house sold in like 2 days for 10K above the asking price! I don't care what anyone tells me, or how much money they spent to transform my friends old house, there is no way in hell that thing is worth $330,000. Especially on a super steep massive hill like Dictionary Hill.
I dreaded every time I had to go up to his house and see him in my old car at the time could barely make it up that hill. Both of his trucks he used to own with low miles needed new transmissions in them from going up and down that hill on a daily basis which burnt his tranny fluid and gears. You're bound to have car trouble, especially with brakes, transmission/clutch, and engine wear from the tremendous amount of stress that hill puts on a persons vehicle. Sure the view is nice and all, but you're so stuck and you can't just walk outside your house to go to the store for something quick because of how high up on the hill you are, and nobody ever walks up and down that damn thing unless they really have to, it sucks big time believe me!
It's crazy because slowly over the years, you started to see a bunch of Mcmansions being constructed up on the very top of the hill that all used to be empty land with rocks and dirt. I bet some of those homes now are worth almost million dollars just for the views alone. It's sad to see so many of his former working class neighbors have moved out in time, and were replaced with rich folks. That entire hill used to be a middle class neighborhood, now it looks like La Jolla.
Another thing, I have been seeing home after home being renovated in parts of SD you'd never expect. Homes that looked like trash for literally 20 years, are being completely redone, block after block. It's just strange how all of sudden this is happening within the past 6 months. I mean I didn't see these particular homes being touch up by any investors a few years back when the housing market was booming.
Investors are seriously spending a ton of dough on a lot of these busted up properties, and are selling them for insane amount of money. Everyone is so quick to cheer on increases in housing values, when all that does is create less affordability for a lot of people including leading to higher rent prices, and can eventually create another housing bubble, especially in a city like SD which is not good for the local economy that relies heavily on tourism, military and crappy low paying service sector jobs to keep itself afloat.
They are being bought up by investors from overseas. Most of them Chinese who want to park their money away from their oppressive government. They think they will be getting double digit yields based on the last five years. They are setting themselves and others who get sucked in to fail.
They are being bought up by investors from overseas. Most of them Chinese who want to park their money away from their oppressive government. They think they will be getting double digit yields based on the last five years. They are setting themselves and others who get sucked in to fail.
This is what it is. We've seen places like San Diego where something like 50 percent of the purchases are cash. People paying $650K and up with cash are usually investors, foreign investors, etc. And they hope that in a few years they'll cash out. If that doesn't happen, I guess it'll be another bust, just not as bad as 2007-2008. Or they'll just abandon ship and hide behind their government walls. And then the banks will try and get bailed out again.
That's why it's funny when you hear market improving, this and that. We are no longer falling flat on our faces, but there haven't really been any jobs added, there haven't been a reduction in costs, debt, etc. It's all smoke and mirrors really and hype to make politicians and corporations and banks look like they did the right thing. In the long run, it always comes down to jobs and people working. If people still aren't working and not just being counted as "not unemployed because they aren't looking" it's just an environment where a few people are doing well, everybody else struggles to pay rent. And we'll continue to get more and more sad stories on TV about people going nuts. The more poor people who believe they have no hope there are, the more likely more crime and death happen. Nobody likes to look at that, they just like to blame it on video games or the NRA.
I don't understand why people (investors or home owners) redoing houses block after block when they looked like trash before is a bad thing, except that it brings up home values. San Diego is one of the safest cities in the country but remember, it was not always this way. From the 1950's to the late 90's, crime was above the national averages and in some decades way, way above. North Park, University Heights etc used to be "bad" neighborhoods and look at them now.
I disagree about the foreign element as well. Maybe it is a factor in markets like Manhattan but not so much in San Diego where it is difficult to get a good real Chinese meal. But seriously, I was at a ton of open houses last month and did notice any obviously foreign buyers, certainly no one speaking Mandarin.
San Diego is an incredibly desirable place to live and I completely agree the local economy does not support the real estate prices. I personally know a ton of folks who worked for Bay Area companies, cashed out their options for their all cash offer and took their high paying job with them to San Diego where it is a little cheaper and certainly more pleasant and better for raising a family. This is pretty easy to do if you are in sales or consulting, at least in software.
It is what it is and San Diego will always be desirable. The only thing that could bring down the housing market is another economic crash but at least anecdotally, the job market seems to be going crazy in places like SF, Boston, NYC. People will always figure out a way to move to SD
There was just an article in the Times about how up and coming SD is and it is the #2 city people want to move to after NYC.
let's keep those prices moving up and up I have lived in SD since 1989 and was 11yrs old. our house seems to going up about 7k a month few more months we are moving states buying a brand new home for 150k and moving away from Mexico I mean San Diego.
The cost of living is way out of line my business in other states they charge more and have a lower cost of living and wages are less overall. Kinda weird
The place is great but the weather is to expensive the quailty of life is going down. The schools no good the roads are almost dirt the traffic well it takes us sometime 30 minutes to go from shadowridge to my parents house in Oside about 8 miles away!
I don't understand why people (investors or home owners) redoing houses block after block when they looked like trash before is a bad thing, except that it brings up home values. San Diego is one of the safest cities in the country but remember, it was not always this way. From the 1950's to the late 90's, crime was above the national averages and in some decades way, way above. North Park, University Heights etc used to be "bad" neighborhoods and look at them now.
I disagree about the foreign element as well. Maybe it is a factor in markets like Manhattan but not so much in San Diego where it is difficult to get a good real Chinese meal. But seriously, I was at a ton of open houses last month and did notice any obviously foreign buyers, certainly no one speaking Mandarin.
San Diego is an incredibly desirable place to live and I completely agree the local economy does not support the real estate prices. I personally know a ton of folks who worked for Bay Area companies, cashed out their options for their all cash offer and took their high paying job with them to San Diego where it is a little cheaper and certainly more pleasant and better for raising a family. This is pretty easy to do if you are in sales or consulting, at least in software.
It is what it is and San Diego will always be desirable. The only thing that could bring down the housing market is another economic crash but at least anecdotally, the job market seems to be going crazy in places like SF, Boston, NYC. People will always figure out a way to move to SD
There was just an article in the Times about how up and coming SD is and it is the #2 city people want to move to after NYC.
You misunderstand, these investors are not here to live. It is to buy low and sell high. Its a speculation market which has reached 2006 levels in just under a year. There is no way this is going to end well if the investors flee after cutting losses once they realize their high sell prices cannot be supported by the market. This is not just a San Diego thing as well. There are investors parking money in Phoenix, Sacramento, SF, Orange County, NYC and almost everywhere. Investors are looking for a high return in a short amount of period. If they don't see it, they cut their losses and move to another speculative market. And they themselves don't do it. Their estate planners and managers do it. So, once the herd goes down the cliff, these markets are bound to go into a correction. This was revealed to me by a real estate agent. I'm not going to say the name but that agent is one of the biggest in the San Diego market.
I don't understand why people (investors or home owners) redoing houses block after block when they looked like trash before is a bad thing, except that it brings up home values. San Diego is one of the safest cities in the country but remember, it was not always this way. From the 1950's to the late 90's, crime was above the national averages and in some decades way, way above. North Park, University Heights etc used to be "bad" neighborhoods and look at them now.
I disagree about the foreign element as well. Maybe it is a factor in markets like Manhattan but not so much in San Diego where it is difficult to get a good real Chinese meal. But seriously, I was at a ton of open houses last month and did notice any obviously foreign buyers, certainly no one speaking Mandarin.
San Diego is an incredibly desirable place to live and I completely agree the local economy does not support the real estate prices. I personally know a ton of folks who worked for Bay Area companies, cashed out their options for their all cash offer and took their high paying job with them to San Diego where it is a little cheaper and certainly more pleasant and better for raising a family. This is pretty easy to do if you are in sales or consulting, at least in software.
It is what it is and San Diego will always be desirable. The only thing that could bring down the housing market is another economic crash but at least anecdotally, the job market seems to be going crazy in places like SF, Boston, NYC. People will always figure out a way to move to SD
There was just an article in the Times about how up and coming SD is and it is the #2 city people want to move to after NYC.
As usual, I totally agree with sfosyd. Flippers or people buying houses to own and live and improving them and the curb appeal isn't a bad thing at all. They have revitalized many areas in different cities I've seen.
LOL about the investors not being Chinese in SD. I totally agree. In other major cities you might see more of that. I've seen several houses in my area sell and the new people moving in aren't Chinese. I do agree that you do see more foreigners buying but I haven't noticed wealthy Chinese buying much in San Diego. So I'd love to hear where the wealthy Chinese are buying in San Diego??
One thing I've noticed in my neck of the woods is I'm hearing more Spanish. Sometimes I can immediately tell where they are from but others it's more difficult. I've noticed more Colombians buying here in San Diego. Here around my Country Club I am hearing more Spanish and they aren't from Mexico. I only have met one Mexican couple at my Country Club. I also hear more and more Russian at the Club and even in my daughter's school several of her classmates are Russian and speak Russian with their kids. But I have NOT seen an uptick of Chinese buyers here in San Diego.
San Diego is a funky market for it's size. I've always said it's more small town in feel. Almost like a big village. I do a ton of networking and I can't tell you how many times I run into a situation where we know the same people or a 2 degrees of separation type of thing. Even when people live all the way across town in different areas.
sfosyd, I think you nailed it about many people that have moved from other major metropolitan cities. Many have cashed in their options and can either work from home or have a small office they go into. The bulk of their assets seems to have come from stock.
I haven't honestly met too many people here that support their lifestyle with a high salary. Sure, there are a few exceptions to this rule but even with these people most of them work partly on commission so it's feast or famine. Times are GREAT now but during the Great Recession they were REALLY struggling.
Even most of my friends have fairly mediocre salaries here in San Diego which is totally opposite of other major cities where I've lived where most of my immediate friends were making VERY high salaries. For the most part that doesn't exist here.
The people that I have met that make the highest $$$$$ don't work in San Diego. Either they travel all the time for work or a few I met even commute all the way up to Los Angeles to give you an idea.
This is what is so unique about San Diego for a city its size. It contains the charm of a small village, and this is one of the things I noticed shortly after I settled here (and could not understand since L.A. is so close). The people are friendly and the local news stations are a joke, even though it is cute... sometimes. Add the nice climate, stunning natural beauty and low crime, and this place is a VERY desirable market for real estate. It just sucks for people who wanted to buy, had the money for it, waited just a tick too late to see once-low priced properties quickly flying away from them.
Really interesting comments! Housing is such a big deal here, it really is and for many of reasons mentioned.
sfosyd brought the conversation back down to earth a bit in retrospect regarding the urban neighborhoods, safety and their history.
I totally agree and was definitely a big factor in our decision to buy where we did which has reputation as not being the greatest, but certainly not the worst. OUr intention was to own this house long term and be ok with living in it for at least 10 years or so.
Clearly not having kids, no debt (except the mortgage) and high salary make us probably more of the exception rather than rule for a married couple in their mid 30s living where we live based on Census numbers.
I was wondering about the Chinese investors comment myself. Not sure how accurate that is...
So far I am definitely not digging this sharp upward trend regardless if I have a stake in it with owning. ITs amazing some of the comments I am hearing sound like they won the lottery. I suppose in some ways owning here would feel like that, but getting in bidding wars that are going considerably over list price to beat cash buyers seems like chasing the rabbit down the rabbit hole.
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Especially on a super steep massive hill like Dictionary Hill.
