Posted on 08/18/2004 10:28:56 PM PDT by BurbankKarl
The Socal housing market has hit a wall. You heard it here first.
A couple weeks ago, actually.
There certainly are a lot more signs up than a few months ago.....
but how far will prices fall?
My son is a real estate agent in San Diego. He would agree with your assessment. He had 25 deals in process last month. Only 11 this month. The small turnaround in interest rates disqualified a bunch of potential buyers. Some sellers are already dropping prices to get those buyers back before the deals are permanently out of reach.
I'm very pleased with my move to Idaho. Mira Mesa was just too crowded. I made a visit to San Diego 3 weeks ago. The issues that prompted me to relocate are even more significant now. I'm happy with a 3900 sq ft house on 1/3 acre in a beautiful neighborhood. Having the mortgage paid off is great. Ditto with having all the credit card debt paid off. College? I can handle it on a "pay as you go" basis because I have no other significant expenses. Even with 2 kids in college.
Is there anything I miss? Sure. Bolsa Vietnamese restaurant in Mira Mesa. La Salsa Mexican restaurant at Costa Verde. Siamese Basil Thai restaurant in Encinitas. San Diego Technical Books in Clairement Mesa. American Shooting Center in Kearny Mesa. El Cajon Gun Exchange.
How do you solve that in a small town? Buy books online from Amazon and Barnes & Noble after reading the reviews. Find new local restaurants with fabulous Greek, Mongolian and Thai cuisine. Patronize 5 local gunshops each of whose inventories exceeds all the gunshops in San Diego combined. Break out a snowmobile in the winter and jet ski in the summer. Take a 2 hour drive to Yellowstone National Park.
So many places like Idaho are simply marvelous, provided you can take your money with you there. Socal is still a wonderful place, provided your household makes over maybe 125K a year. Otherwise, it is a not so great. That is why the middle class is decamping.
Unfortunately for others, they also tend to screw up the market for the locals if it is a nearby California refuge state. Happened to Santa Fe, Durango, Seattle, Hawaii, you name it.
LOL. I read the headline and couldn't figure out why South Dakota was having a real estate boom...
I'm doing the same job in Idaho that I did in San Diego. My hourly rates are lower because I work from my home office instead of subsidizing very expensive office real estate in San Diego. My former co-workers from the San Diego office are dropping off the payroll by attrition. They can't compete in the labor market. The work is moving to other states where costs are more in line with the market. The company revenues continue to improve, but not as a consequence of contributions from the idle staff in San Diego.
My immediate boss is actually in Mclean, VA. My current workgroup has employees all over the continental U.S.. My contracts are structured such that 95% of the work can be done from my home office. The balance is accomplished by delivering hardware/software product to the customer site.
Me, too!
And then I thought I saw a pig soaring past my window.
I saw that story about Las Vegas having the highest gain in real estate prices last year. I know three couples that have bought "investment houses" there...and I can only imagine that once a perceived correction is noticed, that people will move out of these and into something else. I would say Phoenix too, as I hear rents keep falling there.
You know the market is out of whack when you're almost embarrassed to say you live in a house that's only worth $575,000. We live in Vista and if our small house was in Carmel Valley it would easily be worth $775,000, in La Jolla $1M+.
I will miss Eriberto's Mexican drive-thru, tho.
high-finance PING.
The San Fernando Valley's residential real estate market turned more buyer-friendly in July as single-family home sales declined slightly from a year ago and the median price, while $94,000 higher than a year earlier, retreated from June's record level, officials said Wednesday.
Last month, there were sales of 1,210 single-family homes, 63 fewer than in July 2003, according to the Van Nuys-based Southland Regional Association of Realtors.
Compared with July of 2003, though, the torrid price appreciation continued, with the median up by 23.8 percent from last year -- to $489,000. That was $16,000 less than June's record of $505,000.
Monthly swings are normal, and prices are expected to continue running ahead of last year's in the months ahead, and they will probably climb back above the half-million-dollar threshold, industry officials and analysts said.
"I don't see prices coming down at all," said the association president, Lynn Rinker.
July presented a mixed bag.
As the median price -- the point at which half sell for more and half for less -- has shot up for single-family homes, buyers seeking a less-expensive option turned to the condominium market. A total of 524 sold last month, up 14.4 percent from the previous July, and overall sales increased 0.2 percent.
The condominium median price rose by 24.6 percent from a year earlier to $299,000, but fell 5.1 percent from the June record of $315,000.
Price is an issue in both markets.
"'Affordable' is a very relative term," said Rinker, the association's president. "Realtors are relieved to see an easing of the unrelenting upward pressure on prices. The feeding frenzy is subsiding."
For example, pending escrows, a sign of future sales, fell an annual 11.8 percent, their sixth consecutive decline. They were off 8.6 percent from June.
Last week the Van Nuys-based trade group reported active listings were up an annual 86.2 percent to 4,356 properties at the end of July. That's a big jump percentage-wise, but only a 2-month supply at the current sales pace.
But buyers do have more properties to choose from than they did a few months ago, and this will probably moderate price increases.
The Valley's market mirrored all of Southern California during July, according to a separate report Wednesday from market tracker DataQuick Information Systems.
Last month, consumers bought 32,988 homes, 5 percent fewer than a year ago, the company said. The median price was $402,000 last month, up an annual 22.6 percent and 1 percent less than June's.
Los Angeles County's median price was $406,000, up an annual 23.8 percent. Sales fell 3.2 percent to 11,549 units. In Ventura County, the median price increased 24.6 percent to $502,000, and sales fell 16 percent to 1,281 units.
DataQuick analyst John Karevoll said there are no signs of stress in the market yet.
"It's still a seller's market. Buyers may have a bit more choice, but there is still a supply-and-demand imbalance, that's for sure," he said.
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