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You'll just have to wait longer. Some people believe the market will keep going down noticably. It almost seems like the foreclosed homes are being doled out slowly as not to flood the market at once. If there are a few low priced forclosures/short sales then more people bid on the few that are on the market. I've been watching and seeing a few show up every few weeks with slightly lower and lower prices.
Yes, I'm just ranting and it felt good to rant. All I'm saying is, moving to Colorado is starting to look better and better.
For someone with no cash and a laundry lists of requirements about their first home, I don't know that a cheap house is going to satisfy you. You're too good for Oceanside, too good for Vista, too good for a condo.... time to get serious and ask yourself if you really want to own a home in San Diego at all. The fact that you are going 100% financing in the post-bubble era is very strange indeed. If you want to buy into an expensive market you need cash, and lots of it. Thats how you take advantage of all the foreclosures and trouble in the market.
You should take that trip to Colorado. I did when I was in your position. In fact I arrived at many of the same conclusions you did. What I didn't do was whine about it. I accepted the reality and changed my attitude to suit.
You say you are not asking for much, but I would disagree with that. You are asking to have your choice of housing, at your price, in one of the most expensive areas in the country, and you want it all without having the financial means to accomplish it. That attitude of entitlement will only lead to disappointment and bitterness in the future.
This makes me think of those interviews with kids talking about how they didn't see their father much because he was always working (2 jobs sometimes) to support the family. If people in the past were willing to do this, then it shouldn't be unacceptable to consider the same thing if you want to achieve your goals. A friend of mine bought a place, 3 bed townhouse with the intention of renting the 2 bedrooms out. Now he pays only a little more than the rent he was paying previously (as a room renter in a 3 bed townhouse). In this case his living situation is about the same but now he owns the place. Eventually he could probably afford to lose a renter in the future as his pay increases. Then eventually he will be able to afford no renters and own the place. It all depends on what you are willing to do to get your goals.
My cousin bought a fairly new house in the rocky mountain region and it's design included a room with it's own outside entrance. I guess so you could rent it out.
I'm working a second side job and saving much of that up for housing.
Yes, San Diego is expensive. It seems that 75% of the posts on this forum have something to do with the reality that although San Diego is a great place to live, it costs money.
Still, my husband and I are looking to move to San Diego from Orlando. Why? Because we simply love it. Is a house that costs $175,000 here going to cost half a million in San Diego? Probably. Are we going to have to rent at first? Yup. To us, where we live and things like scenery, weather, etc. are more important to us than how much house we can get. If you don't care for those things than the best thing to do is move.
We just see living in San Diego as motivation to make more $$$.
Last edited by thepinksquid; 05-23-2008 at 09:08 AM..
Reason: typos
The point is not "why are prices so high???" The point is, "why are the houses I'm seeing priced where they are?" There's a difference.
99% of the houses in Rancho Santa Fe are worth over a million bucks. You have at least an acre around you, 3000-4000 sq ft houses, great views, etc. Ok, I understand.
San Marcos has nice areas, but I wouldn't call it overall a nice place to live. Yet go to REALTOR.com and search for a house at $300,000 and see what comes back. Guess what - a bunch of condos that are essentially apartments not fixed up properly. In San Marcos? That's ridiculous.
Vista: All of the houses for sale are so far from the freeway as to make it pointless. I'm talking to where you're near Pala. That's just unacceptable.
Oceanside: Turned into the ghetto of North County. I dated a girl who lived out there, so I'm familiar with most of the area. Doesn't hold a candle to RB or Poway or other "nicer" areas. Plus it's so far removed from the 15, and the 78 always has an accident or some idiot screwing up traffic flow, so if there's something on that freeway, you're stuck and late to work. No thanks. At least in San Marcos you can take city streets to get around it.
To make my point...I'm PRE APPROVED for 100% financing. All I have to do is find a house that meets my requirements where it doesn't have 50 offers from investors. That's the hard part. The other hard part is getting the banks to understand that no, I'm not giving you any money up front out of my pocket. It's 100% financed. That means MY bank is paying you the deposit, MY bank is paying the closing costs. So why do the selling banks prefer some smoke Joe who happens to have $20,000 when he's bidding $160,000 on a $275,000 house, over my FULL payment at exactly the asking price? (it happened.)
I'm not asking for much. All I'm saying is, for a 1600 square foot house, anything over $300,000 is just way too much. San Diego's idea of what a condo should be, isn't, due to all of the crazy condo conversions where all they did was take an apartment and convert it - well, a condo should NOT be identical to or less than an apartment. It's supposed to be a step up. Anyone who's been to Ventana Luxury Apartments, THAT is what a condo should be. Anyone who's been to Carmel Summit, THAT is what a condo should be. Instead we get crap like Villa Taviana - $100,000 overpriced, no garage, way too close to major streets so it's hard to get out at work, tons of blind spots from the idiots parking on the street, street punks out smoking and gambling, etc. No thanks.
Yes, I'm just ranting and it felt good to rant. All I'm saying is, moving to Colorado is starting to look better and better.
When we bought our condo in Orange County in '98, it was crazy even back then. And we had to save up about 10K to do it - no one would accept our offer with 100% financing.
In 2005 we wanted to move from our condo to a house, but it wasn't doable - a run down '60s ranch would have been $700K, and even with the $275K equity we had gained, we still couldn't do it. So we moved to Colorado, put 70% down on a brand new 2300 sq. ft. house and have been happy ever since.
You have yet to explain 1) why you feel you are entitled to own a home with absolutely no money to put down 2) and if you WERE entitled....why you would deserve to own one in such a highly desireable area as San Diego.
You want Champagne but have a beer budget. Wait, strike that. A tap water budget.
A few of you seem to think that San Diego is so "highly desirable" that reasonable prices are just too much to ask. Like I'm off my rocker for wanting a balanced pricing scheme.
I reiterate... I don't care how "glorious" you think San Diego is, people have to live. If they're not going to force companies to pay fair wages, then the price of things needs to come down. The money I make should put me right around middle class, but it doesn't due to overpricing. And some of you think that's fair and equitable and even say "stop whining"? I could have sworn that a DISCUSSION board was intended for opinions, irrespective of how many separate times you've heard the same opinion.
A beach doesn't justify molesting consumers. Period.
I'm a consumer. I think like a consumer. I see a price, I come with the money/financing, they take it, I take the item. That's how it should work, regardless of the source of said money/financing. Why should I be obligated to put money down? THE BANK WILL GET PAID THE FULL ASKING PRICE, who cares if I come with cash or not?? If I wasn't serious about buying the home I wouldn't have jeopardized my credit getting 100% financed in the first place!
I already know the response to this but, if I go buy a car and I tell the dealer, "I've got a bank already, pre-approved for the amount" and I hand over a blank check for the full purchase price, the dealer is going to take that check and give me the car right away. It's the same difference. Dealers don't require a downpayment, they only ask for it to supplement financing assistance, but if you already have your own financing preapproved 100%, they don't need jack from you.
Buying a home is the same thing. One bank owns the house, another bank pre-approves a customer for the full amount, so essentially the second bank is "buying" the house from the first bank and then charging the customer for it. Rather that pay extra money out of pocket because some idiot gave a lowball offer, I'd rather accept the guy who's going to pay me 100% of what I asked for it without question.
A few of you seem to think that San Diego is so "highly desirable" that reasonable prices are just too much to ask. Like I'm off my rocker for wanting a balanced pricing scheme.
I reiterate... I don't care how "glorious" you think San Diego is, people have to live. If they're not going to force companies to pay fair wages, then the price of things needs to come down. The money I make should put me right around middle class, but it doesn't due to overpricing. And some of you think that's fair and equitable and even say "stop whining"? I could have sworn that a DISCUSSION board was intended for opinions, irrespective of how many separate times you've heard the same opinion.
I dunno, I grew up in the NYC area where everythings more expensive than it should be. You just accept it or you move to Florida, it's been that way since before I was born. I don't know that I would consider San Diego "glorious", but it's certainly nationally desirable and I'm just not as shocked as you are that it's expensive. You may have just had this realization, but many of us figured all this out about 10 years ago. Overpricing of desirable products is not exactly a new thing. We seem to get a lot of younger people on this forum who are just becoming aware of their desire to own a home.
Remember, home ownership is not a right. And home ownership in Southern California is arguably a luxury. There's always renting, or the freedom to move to a less expensive area. Denverian took control of his life and made a choice, that's a tough but admirable thing to do. I was just in Denver and it seems like eveyone has some connection to California somehow. Comparing home financing to auto financing is naive and that mentality is what got us to this whole sub-prime debacle - anyone with a pulse can get a credit card or auto loan.
By the way I've looked at Denver extensively - and while it is certainly less expensive - a truly nice house in a truly nice close-in or foothill neighborhood is still not cheap by midwestern standards.
I understand what you are saying, but the problem is that if an area is highly desireable...Ocean, beaches, perfect weather....then that area is going to attract a lot of very wealthy people who probably don't even NEED to work.
And then house prices start to become completely unattached to "local income". To some extent....that has happened in San Diego.
There are many very affordable areas of the country where median home price is in line with median income. You just probably won't want to live in any of them :0
A few of you seem to think that San Diego is so "highly desirable" that reasonable prices are just too much to ask. Like I'm off my rocker for wanting a balanced pricing scheme.
I reiterate... I don't care how "glorious" you think San Diego is, people have to live. If they're not going to force companies to pay fair wages, then the price of things needs to come down. The money I make should put me right around middle class, but it doesn't due to overpricing. And some of you think that's fair and equitable and even say "stop whining"? I could have sworn that a DISCUSSION board was intended for opinions, irrespective of how many separate times you've heard the same opinion.
A beach doesn't justify molesting consumers. Period.
I'm a consumer. I think like a consumer. I see a price, I come with the money/financing, they take it, I take the item. That's how it should work, regardless of the source of said money/financing.
Buying a home is the same thing. One bank owns the house, another bank pre-approves a customer for the full amount, so essentially the second bank is "buying" the house from the first bank and then charging the customer for it. Rather that pay extra money out of pocket because some idiot gave a lowball offer, I'd rather accept the guy who's going to pay me 100% of what I asked for it without question.
Revelated - A few points..
1) Reading over the posts, I think everyone responding has been very reasonable, and no one is trying to shut you up, so no need for the snide remarks about this being a "DISCUSSION board". I think that's exactly what everyone has been doing so far.
2) You repeatedly state that you think we should be able to expect a "reasonable" price for homes. How exactly are you describing "reasonable"? Is it based on what you can afford? If as you say, prices are unreasonably high, then people wouldn't be paying them. But as long as people are paying the prices offered, then it would seem that the prices are entirely reasonable to some. The market (as a whole) determines what a reasonable price is, and if the prices aren't sustainable, they will move in a direction until they achieve equilibrium. And I agree with your overall thesis - I think prices are higher than is ultimately justifiable right now, and I think there will be an overall correction (not down to historically low levels, but lower than they are currently), but there is stickiness is prices and this takes time.
3) Who is doing the "molesting" of the consumers that you are talking about? With an economy built on mutually beneficial exchange, all transactions occur only with the consent of both parties. If someone is charging too high a price for something, one is free to vote with their feet and walk away. If they can't get someone else to buy at that higher price, they will have to lower their price or go out of business. If all the prices are too high for someone, they are free to relocate elsewhere. No one has a "right" to a home in San Diego. There are plenty of other places where homes are cheaper, and people are free to move to.
4) If a bank chose not to accept your offer, it could have been for any number of reasons, not the least of which was your financing scheme. If you feel like the bank is making a stupid decision by turning down your "higher" all financed offer, that is ultimately their mistake. But it is likely if we were to hear the other side of the story, they would have several compelling reasons why they made that decision. Banks tend to (at least try to) avoid making uneconomical decisions - if accepting your offer would offer them the best risk-adjusted return, I am sure they would have done it.
Just a few thoughts... I just disagree with a general sense of entitlement, that views things like "homes at a price I want" as something you innately deserve, and that if they aren't offered to you, it is the fault of big business, or people molesting consumers, or businesses in San Diego not offering a "fair wage".
I'd love to keep hearing everyone else's thoughts on this.
-JG
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