Columnist Catherine Hockmuth of The Voice of San Diego discusses the current "buyers market".
Catherine also wrote a great piece on renting recently.
I highly recommend both of these articles.
I'll add to her comments that you need to negotiate well and get a good deal for yourself if you're buying in this market. You could easily find yourself $100,000 underwater if you don't do your homework. Her idea of factoring in 5% growth since 2001, a reasonable growth rate of a normal, non-bubble market is a good way of looking at the market. I've actually used the same exact methodology in some of my analysis work. Perhaps I'll add a "5% annual growth rate since 2001" statistic to my posts.
Thanks to Mark for pointing out this article in the comments of a prior post!
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4 comments:
Agree - the Voice has been a real voice in the wilderness the past six months or so.
I did a little walk around this afternoon, and one condo here on Union across from the Raddison was listed about 6 months ago for 649K, then more recently reduced to 599K and today to 589K. . .it actually has a lot of square footage, and a view (at least from the pictures) . . .but I wonder why they just don't bite the bullet and reduce it to 499K and be done with it. It must be like Chinese Water Torture to lower 10K a week.
p.s. . . .I am not against people making money on real estate, but the runup in prices by speculation has done more harm to SD (and other places) than good. We should live in a town where a person with an average salary can afford a house. . .here that often means military. I think SD felt it was too good for the military the past few years, but a year from now civic leaders will change their tune. . .I'm not military, but it has always been what has given SD a good middle class foundation.
What a great article on renting. Why is there a perception that the second you are living on your own that you should own? Where is the money coming from? I'm guessing most of these people spouting this piece of wisdom were either given the money to buy a place or are one of the few to be educated in the "right" fields. As for the rest of us, I guess we are supposed to buy a condo on $29K a year?
My conclusion about San Diego as it is right now is that it is a self-selected population. The people that grow up here (like myself) leave because its nearly impossible to get by. We have so many transplants because they get hired for some big money job (the only real jobs that seem to be here) and they must be the ones buying the overpriced houses and huge SUVs. I was born here, I am college educated but just starting out and there is no way I can afford anything that's out there in today's market. But at the same time,I don't think I am supposed to be able to.
I wouldn't think too much about renting as a negative right now. The market is changing and is making owning and still having a life more of a possibility than it was just six months ago.
Look on the brightside, you aren't tied down to a property that could be very hard to sell for the next 2-3 years without taking a big loss and you'll be able to work a deal when the market makes more sense.
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