San Diego Ranks #1/Most Overpriced City (Los Angeles, San Francisco: sales, real estate market, oceanfront)

[Imperial1904]

San Diego ranked #1 for the most overpriced city in the U.S.

http://promo.realestate.yahoo.com/Americas_Most_Overpriced_Real_Estate_Markets.html (broken link)

Take San Diego. A slumping housing market, where only 5% of residents can afford the median home, and a high price-to-earnings ratio made the oceanfront city our most overpriced real estate market. Had weather been included as a statistical measurement, there's no doubt San Diego would have avoided our list of top 10 most overpriced cities--but we didn't factor in sunshine.

[newportbeachsmostwanted]

Santa Barbara also consistently shows up on the overpriced list for mid-size, small, and large cities.

Santa Barbara is #1 on this CNN list..
http://money.cnn.com/2006/07/25/real...lues/index.htm

[NYSD1995]

The problem I have with these surveys is that they attempt to create some P/E ratio against residential housing, typically some ratio of the median income to the median home price.

Personally, I don't see how it is relevant. It is only a measure of the volume of people available in the market. The situation it describes is obvious - prices are very high in some areas, and without a lot of equity, it is hard for first-time buyers to break in. Is this really new information?

People earning the median income in any major coastal US city (50k) simply don't buy homes. They are not part of the real estate market. The real estate market in NYC is comprised of people mostly earning several multiples of the median income. The real estate market is determined by those who can afford to buy a house, not those who can't. How long has this been the case in NYC, LA, SF....?


What about those median income earners with massive equity in their current home? Does the 5 or 7% of the market include those with 200k+ in equity in their current home? They can trade up and keep their cost basis identical, in many cases. How many thousands of people does this number represent?

It's interesting to me that people want to discuss Real Estate trends like it's the stock market, but there is none of the fine-grained metrics and data that stocks have. I want to see the a metric based on 60-day mortgage applications in a specific zip code vs the available inventory in that zip. I want to see the elapsed time from prequalification-to-close statistics in a zip code. I want to see the median income of buyers closing in a given month in a given neighborhood. I want to be able to exclude that low-end condo coversion a mile away from my neighborhood of single-family homes in a median calculation.

Instead we are looking at these city and statewide numbers, census data, which just states the obvious to anyone paying attention - prices are high, sales are slow, prices are flat to falling.

[OREGONRAIN]

This list sure moves around alot, I saw Seattle and Portland on some list about this same subject a few months a go.

[niy38]

depend on what kind of median home price this survey use. If it's median
price of all home, P/E make sense.

[Imperial1904]

I know there are more overpriced cities. I just happened to see this on Yahoo's front page and thought I'd post it.

[greyarea]

It seems like the houses in San Diego are staying on the market extended periods. It seems like the prices must fall at some point in order to sell, right? I can try to sell a monster SUV at blue book value, but no one is buying; therefore it makes sense that a downward price adjustment must be made to intice a buyer who would otherwise prefer a fuel efficient car. It seems like the same logic would apply to home values. I am going to rent and see what happens but I would be willing to bet this is a bubble that is about to burst.

[greyarea]

sorry for so many "it seems likes" LOL.

[lb1]

I saw a list like this last week, but can't remember what website it was on. It had the 10 most overpriced cities, which included Los Angeles, San Francisco, New York, Boston, Honolulu, etc. If I close my eyes and think of places I would want to live, these places are all ones I would consider. When I see other lists of the 10 places where you get the most bang for you buck, I would never want to live there. Maybe the most overpriced cities are expensive because people want to live there! You can't treat where people live like stocks / bonds. They are more than just an investment.

[niy38]

you got this wrong. I don't think many people like to live in LA after he
get a little bit more familar with this city.

and NC is a nice place.

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Originally Posted by lb1

I saw a list like this last week, but can't remember what website it was on. It had the 10 most overpriced cities, which included Los Angeles, San Francisco, New York, Boston, Honolulu, etc. If I close my eyes and think of places I would want to live, these places are all ones I would consider. When I see other lists of the 10 places where you get the most bang for you buck, I would never want to live there. Maybe the most overpriced cities are expensive because people want to live there! You can't treat where people live like stocks / bonds. They are more than just an investment.

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