Mira Mesa: no longer affordable for <$200k

User Forum Topic
Submitted by flu on February 28, 2016 - 7:01pm

I stopped getting weekly emails from redfin about Mira Mesa about two weeks ago. I thought there was something wrong with my email, so I checked out my redfin account.

Then I realized why.

I had my slumlord filter set to properties with asking prices less than $200k.

Well, there isn't any anymore.

My, has times changed.

https://www.redfin.com/zipcode/92126

Submitted by flu on February 28, 2016 - 7:11pm.

Inventory is just horrendously low.

http://www.sdlookup.com/Market-92126-Mir...

PPSF for SFH in MM is around $340/sqft and $315/sqft for condos.

Looks like the lizards are getting more expensive.

There's like no turnover. Probably, because most the existing owners are all strong hands that don't need to sell.

Submitted by AN on February 28, 2016 - 11:52pm.

Inventory suck in MM. It would be very interesting to see what this spring/summer looks like.

Submitted by flyer on February 29, 2016 - 6:35am.

Seeing this in many neighborhoods, and was just talking about it with family/friends the other day. Like us, we don't know anyone who ever plans to sell any of their primary or investment properties, so it does not bode well for future buyers--or renters.

Submitted by flu on February 29, 2016 - 6:53am.

flyer wrote:
Seeing this in many neighborhoods, and was just talking about it with family/friends the other day. Like us, we don't know anyone who ever plans to sell any of their primary or investment properties, so it does not bode well for future buyers--or renters.

The way I look at it, YOY, it's been about 6.5% return for me for the past 3 years, excluding appreciation. In the worst case scenario, a 19% decline from the purchase price would be around the break even point. That would be 19% below prices that were already cratered when they were purchased. And every additional year of rental income, that break even point goes even lower. Meanwhile, rent keeps rising, albeit at a slower pace. Meanwhile, that CD is still around 1%. And I'm just a small fish. Others with much deeper pockets probably have a much larger risk tolerance, so they probably have even less reasons to sell.

Submitted by svelte on February 29, 2016 - 7:11am.

My take on what has happened: we all played musical chairs while the market had cratered and interest rates were very low. We anticipated rates going up and built our nest / investments on places we wanted to stay long term.

Now we're all settled in so nobody's moving.

Interest rates are still low, wages aren't increasing much, no incentive to move up the food chain property wise. It's gonna be status quo for a bit.

I could be wrong, tomorrow's March 1, a flood of new properties could spring up on the market overnight.

Submitted by The-Shoveler on February 29, 2016 - 7:58am.

There is probably only a hand full of condos less that 200K in all SD county IMO.

It's very simple (not enough new housing has been built).

Maybe that will change in the next few years, but right now there is starting to be an extreme shortage.

Submitted by spdrun on February 29, 2016 - 9:34am.

Two ways to lower prices:
(1) Increase supply
(2) Reduce demand

If you want lower prices, vote for the candidate most likely to "reduce demand" so to speak ;)

Submitted by The-Shoveler on February 29, 2016 - 9:58am.

No matter how you slice it, our growing population cannot fit in the existing housing.

Submitted by spdrun on February 29, 2016 - 10:15am.

Sure it can. Employment in places like SD drives demand.

During recessions, people tend to double up or stay put in secondary cities.

And, of course, Trumpkin promises to lower our population by about 4%.

Submitted by outtamojo on February 29, 2016 - 10:26am.

Value seems to be in mid- high to higher end these days. I see lower end stuff being offered for what used to be higher end ask prices. Would it be a good move to sell the condos and put that money into something higher end or at least more prime? Something like a house in a choice area I could rent out for awhile and give to the kids if they want to live in that area. I wish I had the guts back then to use 15 year mortgages on my rentals.

Submitted by flu on February 29, 2016 - 11:14am.

outtamojo wrote:
Value seems to be in mid- high to higher end these days. I see lower end stuff being offered for what used to be higher end ask prices. Would it be a good move to sell the condos and put that money into something higher end or at least more prime? Something like a house in a choice area I could rent out for awhile and give to the kids if they want to live in that area. I wish I had the guts back then to use 15 year mortgages on my rentals.

We all have our "I wish I had done XXXXX years ago". You're not alone. Well, look at it this way. It could have gone badly the other way too. You never know.

I'm going to be spending most of this year and next rebuilding my cash position. One thing that I've noticed is that ever since I paid off that god awful mortgage, it definitely feels like I have less net worth at hand. As a result, I'm much more careful with the remaining net worth I do have. Funny how that works.

I think run most efficiently they less liquidity I have. If I'm too liquid, I have a tendency to get slightly less careful on where my spending goes.

Submitted by The-Shoveler on February 29, 2016 - 11:26am.

The one housing segment that they are building enough (or even over building) is the higher end of the market (over 1 to 1.2 million) or so.

They are definitely not building enough condos under 300K or SFH under 500K.

At least not in SD county.

I think they will be building quite a few in the next few years along the I-15 600K to 900K homes in north county though.

Submitted by flu on February 29, 2016 - 12:41pm.

The-Shoveler wrote:
The one housing segment that they are building enough (or even over building) is the higher end of the market (over 1 to 1.2 million) or so.

They are definitely not building enough condos under 300K or SFH under 500K.

At least not in SD county.

I think they will be building quite a few in the next few years along the I-15 600K to 900K homes in north county though.

The funny part is I visited Pacific highland ranch off of 56. Most of the new construction is all sold out. These aren't exactly starter homes either.

Submitted by FlyerInHi on February 29, 2016 - 12:57pm.

When the predicted debt crisis hits and we have 20% interest rates then house prices will come down.

BG reminded us of Ross Perot on the other thread. He's been predicting since 1990. And rates have only come down.

Submitted by The-Shoveler on February 29, 2016 - 1:00pm.

FlyerInHi wrote:
When the predicted debt crisis hits and we have 20% interest rates then house prices will come down.

I think that is extremely unlikely unless wages were going up 22% etc...

Lower RE prices are not really in the local or national Gov's interests.

Submitted by spdrun on February 29, 2016 - 1:02pm.

Sometimes, things happen that aren't in the interest of the filth running DC and Sacramento.

Submitted by bearishgurl on February 29, 2016 - 1:08pm.

FlyerInHi wrote:
When the predicted debt crisis hits and we have 20% interest rates then house prices will come down. ...
If that happens, I'll be loving it ... regardless of the fluctuating value of whichever residence I own at the time. I'm too old to recover from any over-exposure to the "stock market casino." :=0

Submitted by no_such_reality on February 29, 2016 - 1:14pm.

bearishgurl wrote:
FlyerInHi wrote:
When the predicted debt crisis hits and we have 20% interest rates then house prices will come down. ...
If that happens, I'll be loving it ... regardless of the fluctuating value of whichever residence I own at the time. I'm too old to recover from any over-exposure to the "stock market casino." :=0

Except if the stock market casino implodes, CalPERs implodes and then the State and local Governments implode and Stockton will be a wishful memory.

Submitted by spdrun on February 29, 2016 - 1:17pm.

Good. A lot of overpaid ex-cops who retired before 50 at $100k+/yr will have to eat rice and beans. Problem?

Guess they'll find out how the other half lives.

Submitted by flu on February 29, 2016 - 1:17pm.

On the other hand, three MM condos is probably what it's going to cost to send my kid to Stanford medical school....if she can get in...Heh heh

Submitted by flu on February 29, 2016 - 1:19pm.

spdrun wrote:
Good. A lot of overpaid ex-cops who retired before 50 at $100k+/yr will have to eat rice and beans. Problem?

Guess they'll find out how the other half lives.

100k is middle class. In high cost areas of SD, LA, BayArea, I would even argue if that's middle of middle class.

Submitted by bearishgurl on February 29, 2016 - 1:22pm.

FlyerInHi wrote:
. . . BG reminded us of Ross Perot on the other thread. He's been predicting since 1990. And rates have only come down.
FIH, of course you must know that the only reason interest rates have "only come down" has been because artificial constructs were put in place by the PTB ~10 years ago to keep them down and are still in place today.

These constructs in place are only kicking the can (National debt) down the road further for our kids and their kids to deal with cuz we'll all be dead by then. Meanwhile the passage of the ACA into law had and has the effect of adding trillions more to the National debt in the form of constant monthly premium subsidies paid out .... in part due to paying a HUGE group of people who HAD insurance prior to the ACA but were cancelled immediately prior to its inception (12/31/13). There are millions of us out there who didn't ask to participate in this dumbed-down, put-millions-of-people-on-public-aid-who-don't-need-or-want-it quagmire. Many of us now face no choice but to accept a subsidy because our monthly premiums have doubled and even tripled in cost from what we were paying in 2013 and prior years (before the ACA).

Submitted by spdrun on February 29, 2016 - 1:23pm.

100k is middle class. In high cost areas of SD, LA, BayArea, I would even argue if that's middle of middle class.

So? Let them move to the desert. Is someone entitled to live in SD/LA/SF just because they're an ex-cop?

Submitted by flu on February 29, 2016 - 1:26pm.

spdrun wrote:

100k is middle class. In high cost areas of SD, LA, BayArea, I would even argue if that's middle of middle class.

So? Let them move to the desert. Is someone entitled to live in SD/LA/SF just because they're an ex-cop?

I think you need to adequately compensate certain public workers otherwise infrastructure falls apart. That said, the pension situation is alarming imho but I don't think paying cops $100k is really out of the norm. But what I think doesn't really matter. It is what it is. And it doesn't affect my bottom line.

Submitted by flu on February 29, 2016 - 1:30pm.

no_such_reality wrote:
bearishgurl wrote:
FlyerInHi wrote:
When the predicted debt crisis hits and we have 20% interest rates then house prices will come down. ...
If that happens, I'll be loving it ... regardless of the fluctuating value of whichever residence I own at the time. I'm too old to recover from any over-exposure to the "stock market casino." :=0

Except if the stock market casino implodes, CalPERs implodes and then the State and local Governments implode and Stockton will be a wishful memory.

We actually already have a precendence of what happens to pensions when the local government can't pay...Detroit, and rewriting pension contracts,so I really don't think people need to worry about it.

Submitted by livinincali on February 29, 2016 - 1:38pm.

flu wrote:

And it doesn't affect my bottom line.

It does if they try to fill the hole with property tax increases.

Submitted by FlyerInHi on February 29, 2016 - 1:49pm.

bearishgurl wrote:
FlyerInHi wrote:
. . . BG reminded us of Ross Perot on the other thread. He's been predicting since 1990. And rates have only come down.
FIH, of course you must know that the only reason interest rates have "only come down" has been because artificial constructs were put in place by the PTB ~10 years ago to keep them down and are still in place today.

These constructs in place are only kicking the can (National debt) down the road further for our kids and their kids to deal with cuz we'll all be dead by then. Meanwhile the passage of the ACA into law had and has the effect of adding trillions more to the National debt in the form of constant monthly premium subsidies paid out .... in part due to paying a HUGE group of people who HAD insurance prior to the ACA but were cancelled immediately prior to its inception (12/31/13). There are millions of us out there who didn't ask to participate in this dumbed-down, put-millions-of-people-on-public-aid-who-don't-need-or-want-it quagmire. Many of us now face no choice but to accept a subsidy because our monthly premiums have doubled and even tripled in cost from what we were paying in 2013 and prior years (before the ACA).

Artificial constructs? What about market forces? People keep on talking about market forces.

Submitted by FlyerInHi on February 29, 2016 - 2:01pm.

flu wrote:

We actually already have a precendence of what happens to pensions when the local government can't pay...Detroit, and rewriting pension contracts,so I really don't think people need to worry about it.

The process seems to be working. There's Puerto Rico playing out now... Philadelphia might be the next big one coming.

Submitted by flu on February 29, 2016 - 2:14pm.

livinincali wrote:
flu wrote:

And it doesn't affect my bottom line.

It does if they try to fill the hole with property tax increases.

Prop 13

Submitted by bearishgurl on February 29, 2016 - 2:16pm.

flu wrote:
spdrun wrote:
Good. A lot of overpaid ex-cops who retired before 50 at $100k+/yr will have to eat rice and beans. Problem?

Guess they'll find out how the other half lives.

100k is middle class. In high cost areas of SD, LA, BayArea, I would even argue if that's middle of middle class.

First of all, only the cops at the top of the "food chain" are currently receiving anywhere close to ~$100K per year in monthly pension payments. A $100K pension is the exception, not the rule in public pension payouts ... at least among former city/county employees.

Below is a good example of a SoCal area where a lot of former "street cops" (and teachers, city/county workers and firemen, etc) are likely now "comfortably `retired.'" I saved this list of six SFR listings located in a popular East LA community back on 2/1/16 and re-checked them all last night. I thought for sure they would mostly be sold by now, albeit for 10-20% under asking price (except for the last one situated on >1/3 AC). All are smallish older homes which are very conveniently located (by LA standards). However, NONE have sold as of today, NONE appear to be "distress sales" and a couple of them have been languishing on the market for +/- one year. Four of them have had price reductions and all the sellers seem to be "hanging on." The SFR inventory all over LA county has been very, very low for more than a year so this tells me that the few listings that are out there are in "strong hands," as flu mentioned earlier on this thread. I have no doubt that three (or more) of these listings were originally purchased for <$20K by the current seller or their parent or grandparent. It is obvious to me that these sellers are just "testing the market" and will rent the property out if they can't get their price (or leave it on the market forever cuz it doesn't cost them anything to do so). The first two are in the attendance area of Eagle Rock HS which is a very good school but these asking prices are extremely high, IMO, for non-historic homes located in a predominately "working class" area:

On the market 387 days now with at least one price reduction and does not appear to a distress sale (SS):

http://www.realtor.com/realestateandhome...

On the market 109 days now with one price reduction so far:

http://www.realtor.com/realestateandhome...

On the market 85 days now and situated on a substandard lot:

http://www.realtor.com/realestateandhome...

On the market 46 days now with one price reduction:

http://www.realtor.com/realestateandhome...

On the market 324 days with no price reductions and situated on barely std-sized lot <3 ft from an apt bldg:

http://www.realtor.com/realestateandhome...

On the market 46 days with one price reduction and situated on a >1/3 AC lot:

http://www.realtor.com/realestateandhome...

It's going to be interesting so see what these listings eventually sell for OR if they get taken off the market. I'm going to leave them in my "saved list" and check on them at the end of every month.

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