Real Estate Timing (Los Angeles, San Diego, San Francisco: sales, loans, houses)

[socketz]

If San Diego drops 30%, I'll buy several more houses there...

Sorry, but there isn't a better spot in the US to live and raise a family, so I am bullish about the prices firming up again in 3-5 years. Slaries are low in San Diego, but not low enough to warrant a 30% drop. There is tons of employment in SD.

Now, if you want to talk Florida, I'd put money that it will drop at least 30%, especially since 40% of the homes bought in Florida in 2006 were specultive.

[Need_affordable_home]

Originally Posted by socketz

If San Diego drops 30%, I'll buy several more houses there...

Sorry, but there isn't a better spot in the US to live and raise a family, so I am bullish about the prices firming up again in 3-5 years. Slaries are low in San Diego, but not low enough to warrant a 30% drop. There is tons of employment in SD.

Now, if you want to talk Florida, I'd put money that it will drop at least 30%, especially since 40% of the homes bought in Florida in 2006 were specultive.

I googled this up and the experts believe San Diego to be anywhere from 40-70% overvalued from the peak. This means a drop of between 28% and 41% is expected. I wouldnt start buying till a drop of at least 40% has been achieved or you will lose money speculating/investing. What is the median salary per person in SD? I read it was about $50k gross annual per person. This means it would take four incomes to afford a $500k house. This means youll need two families living in that house where both husband and wife make $50k each times four! What kind of house can you get for $500k in SD? About 1600 living square feet with 4/2/1 and were talking small bedrooms at that. Thats 2 bedrooms, 1 bathroom per family. Not the kind of life most middle class families want to live. With a 40% drop, that $500k house will become $300k. Salaries should increase about 10% in those few years. This will make a 3/2 starter house affordable again(but just barely) for the middle class dual median income family. Singles making one income would be able to afford a 1 bedroom condo, the minimum housing possible. I consider prices out of wack when one median middle class income isnt enough for even a 1 bedroom condo or if a dual income cant get you a starter 3/2 house.

I have a friend in SD who is an archit(architecture) He says base salary will be $40k and he makes another $10k working a few hours a day with a home based business. That $50k salary is smack in the middle of median of what people there make. Yet he cant afford squat and still lives with his parents. He doesnt know what to do, he may be forced to relocate(this will break his heart) We checked out 1 bedroom condos online and they are going for quarter million!(700-800 square feet) I asked him how he could afford it and he had no idea! He was sad too and hopes prices will drop significently or he will have to relocate out.

I however agree with at least 30% drop in Florida, I even have a thread on that. Again, prices are out of wack. A 700 S.F 1/1 condo in wpb where I live costs $130k! A young professor(such as a teacher) would be priced out of even that! Personally, I consider a 1/1 condo way too small for me anyway. So im forced to relocate where I can enjoy a nice big affordable house and the low cost of living will mean my freelance graphics design income will go a long way. A 30% drop still wont keep me in Florida.

[bj1972]

Originally Posted by socketz

90k in the military ? Is he a fleet commander ? That seems abnormally high for the military and I spent 6 years in myself, so I am familiar with the enlisted/comissioned pay structure.

Nope...just a major (pilot) with 12+ or so years in. Take home roughly around $6500 a month I think (before he opted recently to save 20% in the savings plan...now it is lower, but we're saving more than just Roths at least)...so I'm guessing the 90K is before take home...plus he is on the bonus right now too..."devil's money" we now call it...we'll see that in the spring for another year or so too. Pilots get a bit more than the rest of the MOSs (though Sub officers, medical officers and dentists get more than pilots)...it's incentive pay on top of basic pay. And, of course, he is rating dependents. Our BAH is way lower than So Cal now, but so is our housing of course. I remember the jump up from Capt to Major was significant...had to do with his time in too I think (or maybe it was the amount of flight years and flight pay jumped up). I don't think we'll see such a sizeable jump if he stays in till Lt Col and/or year 20, but could be wrong.

Anyway, I think he'd be making at least that by now on the civilian side with his background (he was an instrument rated pilot before joining). I'm 2 yrs younger then him, quit the civilian side as an independent consultant 5 1/2 yrs ago when we had our first child and had just been making around 90-100K the year prior to her birth. We both went to state schools...average grades...but I'd say we both have strong work ethics and are a tad bit of workaholics.

We worked hard to live off his pay in the beginning and used mine to pay off student loans, car loans (we now only buy cash), and save...even when I started earning more then he was making at the time. So, we never relied on my salary (though did enjoy a bit more spending with it). It was tough in the beginning not getting a bigger place when we knew technically we could..but we knew we did not want to be committed to a two income family for when we had kids. We also were blessed with some nice real estate sales (hence part of the chunk I mentioned)..but that could just as easily go south on us in the future.

[bj1972]

"Anyway, I think he'd be making at least that by now on the civilian side with his background (he was an instrument rated pilot before joining). "

Oops, meant to say he had his commercial pilot certificate before joining...not just instrument rated.

Is there no edit feature on after posting? Maybe I'm just missing it. New on this board and I know other boards have it...

Sorry, to go off topic!

[socketz]

I've kinda lived the same way, often well under my means, but in a really nice areas. I grew up poor, so I'm always reluctant to live on the edge financially. Even with this new job in Texas, I'm doing very well financially, but I'm still afraid to over-committ on the mortgage.

[daisybuttercup]

Hello? The last post was Dec 2006... Is this forum still open?

[daisybuttercup]

I am planning to move to San Diego the first quarter of 2009. I am a realtor in Fl, and plan to get my CA license, but would like to to begin networking and getting to know the area as soon as possible. My reason for making this big change is 1. my daughter is married to a Navy man and they have 3 children and 1 more on the way and 2. I was born on the Westcoast and I feel like that is where my soul belongs... On my two visits thus far, I loved it. There is an entirely different aura, energy if you will in SD. I currently live in Jacksonville. Need I say more?
Anyway, so far what I know is this: only 2 kinds of folks can live in SD - the military and the rich. I am by no means rich. I am a big believer in 'where there is a will, there is a way'. When I look into the faces of my lil grandbabies, my will becomes supercharged! I will find a way. I am really considering buying cheap desert lot (if one can be found), and building, providing I can get some hard estimates on labor and materials. Ultimately, I would like to build a 'home of the future' one that is designed for comfortable cohabitation -similar to a granny flat, but some how better... still brainstorming on that.
Any tips, ideas, or anyone who just wants to be my friend... pls reply.

[macchiato]

Originally Posted by Need_affordable_home

I googled this up and the experts believe San Diego to be anywhere from 40-70% overvalued from the peak. This means a drop of between 28% and 41% is expected. I wouldnt start buying till a drop of at least 40% has been achieved or you will lose money speculating/investing. What is the median salary per person in SD? I read it was about $50k gross annual per person. This means it would take four incomes to afford a $500k house. This means youll need two families living in that house where both husband and wife make $50k each times four! What kind of house can you get for $500k in SD? About 1600 living square feet with 4/2/1 and were talking small bedrooms at that. Thats 2 bedrooms, 1 bathroom per family. Not the kind of life most middle class families want to live. With a 40% drop, that $500k house will become $300k. Salaries should increase about 10% in those few years. This will make a 3/2 starter house affordable again(but just barely) for the middle class dual median income family. Singles making one income would be able to afford a 1 bedroom condo, the minimum housing possible. I consider prices out of wack when one median middle class income isnt enough for even a 1 bedroom condo or if a dual income cant get you a starter 3/2 house.

I have a friend in SD who is an archit(architecture) He says base salary will be $40k and he makes another $10k working a few hours a day with a home based business. That $50k salary is smack in the middle of median of what people there make. Yet he cant afford squat and still lives with his parents. He doesnt know what to do, he may be forced to relocate(this will break his heart) We checked out 1 bedroom condos online and they are going for quarter million!(700-800 square feet) I asked him how he could afford it and he had no idea! He was sad too and hopes prices will drop significently or he will have to relocate out.

I however agree with at least 30% drop in Florida, I even have a thread on that. Again, prices are out of wack. A 700 S.F 1/1 condo in wpb where I live costs $130k! A young professor(such as a teacher) would be priced out of even that! Personally, I consider a 1/1 condo way too small for me anyway. So im forced to relocate where I can enjoy a nice big affordable house and the low cost of living will mean my freelance graphics design income will go a long way. A 30% drop still wont keep me in Florida.

Is he willing to live outside the down town historic epicenter?
Try REALTOR.com - Real Estate Listings & Homes For Sale for openers.

[grzl2wmin]

5.7% is a "blood bath"? if we were in a financial war I'd love to be your enemy! No offense meant; but, other parts of the country are actually suffering. The stock market drops 5% if a trader accidentally trips on a ticket, or has accidental myopia for 5 minutes. Show me a 5% r.e. drop in San Diego in 2008, and by 2010 I'll show you a richer house owner. As long as that individual manages their personal debt in 2008, and doesn't default they will be o.k. Realtors are spooking this market so they can commission.

[Unkllars]

San Diego County has strong and extremely weak spots for the market. Those high % drops are as a county whole. Newer areas tend to be more volatile than older, more established areas, but older homes are sometimes less appealing, so the market fluctuates. A good indicator of the market would be San Diego County's Northern neighbors. San Diego is more volatile than Orange and LA counties. Watch for these two counties to become stronger, heavy buyers markets. It will spill into San Diego and then lastly the IE. I don't understand why San Diego isn't as appealing as the OC, but San Diego is still undergoing its transformation into a financial and technological hub for many companies and people.

What you should do while you're waiting is to see how you can support a permanent rate increase on conforming loan limits. the $710,000 you hear about is only until the end of this year unless it is made permanent. Also, look for smoking deals! There are listings that sit almost a year before selling, but then others sit just days. They are priced where someone just gets it to not risk losing the opportunity to own it if it drops and someone else takes it.

An informed consumer should never become a hardship seller. Keep yourself informed!! Then buy when the time is right for YOU!